West Kenya Sugar Company Limited v Busia Sugar Industries Ltd & 2 others [2017] KEELC 3395 (KLR)
The bottom line
#A Kenyan court ordered Busia Sugar Industries to stop factory operations because it was operating on borrowed licences that legally belonged to another company.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether this court has jurisdiction to hear this matter
- 2.Whether this matter is res judicata
- 3.Whether this matter is sub judice
- 4.Whether the licence No. EIA 0020469 issued to Africa Polysack Limited could also be used by Busia Sugar Industries Limited
- 5.What orders should be made
Key legal issues
#Jurisdiction of the ELC over constitutional claims with environmental aspects
The court had jurisdiction; the NET handles only appeals on licensing decisions, not constitutional petitions.
The petition alleged constitutional violations (Articles 10, 20, 21, 27, 40, 47 and 50), which only the constitutional courts may determine. The court aligned itself with Munyao J's reasoning in Nakuru Constitution Petition No. 13 of 2015 and held that Article 162(2)(b) and Section 13 of the ELC Act confer jurisdiction over environmental matters. The argument that the Crops Act vests exclusive jurisdiction in the High Court was rejected as a misreading of Section 8.
Res judicata
Not res judicata; the issues in this petition were not litigated in Busia Petitions Nos. 1 and 8 of 2014.
The earlier petitions were public-spirited and concerned construction before an EIA licence issued, whereas this petition was personal to the petitioner, challenging registration of the 1st respondent as a miller and the use of the EIA licence. The 1st respondent was not a party to the first petition and the constitutional issues raised here are of particular personal economic and environmental interest to the petitioner.
Sub judice
No prejudice would arise from proceeding; Busia Petition No. 2 of 2016 would have no prejudicial effect on the 1st respondent.
The 1st respondent did not supply the pleadings in Petition No. 2 of 2016. From Korir J's ruling, conservatory orders had been refused and the court had already spelt out the consequences if that petition succeeded, so there would be no prejudice to the 1st respondent from this court proceeding.
Legality of the change of registration from APL to Busia Sugar Industries Ltd
The change of name/certificate exchange effected at the Kenya Sugar Board was illegal and unlawful; APL and BSIL are separate legal persons.
Certificates of incorporation prove separate legal personalities. A change of name requires compliance with Section 20 of the Companies Act (special resolution, registrar's approval, notice and Gazette notification), none of which was produced. The 'change of name' done in one day at the Sugar Board's offices, adding two new sites, is unknown to law and infringed the petitioner's rights to participate.
Transferability of the EIA licence
No transfer occurred; no EIA licence existed in respect of the added sites, and a Section 58 EIA licence is site-specific.
Although EIA licences are transferable under Section 65 of EMCA, no one applied for a transfer; the documents were all for a change of name. The two additional sites were never subjected to EIA, no licence issued for them, and thus none could be transferred. A factory is being constructed on those sites in breach of Section 58 of EMCA, infringing the petitioner's rights.
Legal principles established
#- The National Environment Tribunal has no mandate to entertain constitutional petitions; the ELC has jurisdiction over constitutional petitions raising environmental rights violations.
- Two distinct certificates of incorporation create two separate legal persons; a registration certificate cannot pass between them by a mere 'change of name' effected outside the Companies Act.
- An EIA licence issued under Section 58 of EMCA is site-specific and cannot be transferred unless a transfer is applied for and granted.
Court orders
#- 1.The 1st respondent to stop its activities in the factory subject to this petition forthwith
- 2.The 1st respondent to apply for the licences as required by law under Section 16(1) and (2) of the Crops Act and Section 58 of EMCA
- 3.The EMCA and Crops Act authorities to deal with all licensing issues raised by the petitioner
- 4.The petition against the 2nd and 3rd respondents dismissed with no order as to costs
- 5.Costs of the petition awarded to the petitioner, paid by the 1st respondent
- 6.No damages awarded, none having been proved
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act, 2011
Relief refused
#Compensation/damages
No damages were proved by the petitioner
Declarations and reliefs against the 2nd and 3rd respondents
The petition against the 2nd and 3rd respondents was dismissed
Quashing of EIA licence by this Court
Court directed that EMCA and Crops Act authorities handle licensing
Costs
The costs of the petition shall be to the petitioner paid by the 1st respondent; the petition against the 2nd and 3rd respondents dismissed with no order as to costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I hold that this case is before the right court. This court has jurisdiction to determine the issues raised herein.
It cannot be reasonably argued in law, that the Constitutional issues raised by the petitioner are res judicata. I hold that they are not resjudicata.
The process under which two companies changed their names in one day in the offices of Kenya Sugar Board from Africa Polysack (APL) Sugar Company Limited to Busia Sugar Company Ltd is unknown to law. It was not only illegal it was unlawful.
Any licence given under Sec 58 of the EMCA act is site specific.
The first respondent shall therefore stop its activities in the factory subject to this petition forthwith and apply for the licences as required by law.
The petitioners petition shall succeed to that extent. No damages to the respondent were proved before me by the petitioner. I will therefore not award any.
The petition against the 2nd and 3rd respondents is dismissed with no order as to costs. The costs of the petition shall be to the petitioner paid by the 1st respondent.
Issues in the judgment
#Inconsistent land parcel numbers for the same sites are used throughout the judgment (e.g. 927 vs 972; 3179/1274 vs 1379/1274; Ebusibwao vs Ebusibwabo), making it impossible to reconcile the exact parcels
The 2nd respondent is referred to inconsistently as 'respondent' and 'defendant' in the judgment
The judgment does not state its own petition/case number; it is identifiable only by cross-references to related Busia petitions
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "West Kenya Sugar Company Limited v Busia Sugar Industries Ltd & 2 others [2017] KEELC 3395 (KLR)", Case Analysis (2017). Busia ELC Petition No. 5 of 2016 (as extracted from the record). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3395/eng@2017-03-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.