Kinyara Sugar ordered to pay UPC EC chairperson shs160m for breach of agreement.

Jinja | Kinyara Sugar  Limited (KSL) has suffered a financial setback after losing a legal battle with Hajji Kazimbiraine Mahmoud over contract breaches.

The court winner is the Uganda Peoples Congress’s (UPC) Electoral Commission chairperson.

The dispute arose from a Cane Production Contract signed on September 10, 2004, which Kazimbiraine terminated on March 2, 2023, citing violations by the company.

Following the termination, Kazimbiraine filed a legal action, which resulted in arbitration presided over by Hon. Justice (Rtd) Bart M. Katureebe, Chief Justice Emeritus.

Kazimbiraine won the case. Katureeba ruled that Kinyara Sugar Limited violated several contract provisions.

The arbitrator ruled that the respondent violated Clause 5.1 of the cane production contract by harvesting Ratoon 5 outside of the required age range.

The respondent also violated clauses 5.2 and 6.2 by failing to notify the claimant before harvesting Ratoon 5.

Kazimbiraine, represented by Ssewankambo and Co. Advocates now expects Kinyara Sugar Limited as ordered to pay shs160 million in damages for breach of contract.

This amount includes shs99 million for general damages and shs61,787,200 for special damages.

The arbitrator declined to consider whether or not the Cane Production Contract violates the Sugar Act of 2020.

The claimant was, however, awarded 8% annual interest on special damages from the date of filing the claim until full payment was made.

Furthermore, the respondent was fined 8% per annum on general damages from the date of this award until full payment was made.

As if that were not enough, the claimant was also awarded the costs of the arbitration proceedings.

Kazimbiraine was pleased with the arbitration decision, noting that justice and fairness were upheld.

He thanked his legal team and stressed the importance of standing up to multinational corporations that violate the rights of others.

Kazimbiraine’s successful legal challenge establishes a precedent for holding companies accountable and encourages farmers throughout Uganda to assert their rights when dealing with corporations.