Court orders govt to compensate tea farmers with over Shs 60bn

The commercial division of the High court has ruled in favour of tea nursery operators from ten districts, ordering the government to compensate them with more than Shs 60 billion for their tea seedlings.

This decision was handed down by justice Harriet Grace Magala following an unsuccessful appeal by the government against the tea operators. The operators named in the case include Frank Byaruhanga, Dr Francis Runumi, George Owakukiroru, Caleb Tumwesimira Kipande, Sam Arineitwe Kajolo, Julius Tumushabe, Julius Kanyamunyu, and Rev Bernard Byamugisha.

In 2019, these farmers filed a lawsuit against the Attorney General and the National Agricultural Advisory Services (NAADS), seeking compensation for tea seedlings that perished in their nursery beds due to the government’s failure to honour a guarantee demand issued by the ministry of Agriculture, Animal Industry, and Fisheries.   

Following negotiations out of court, both the farmers and respondents reached a consent judgment endorsed by the court registrar on January 8, 2021.

As per the consent judgment, it was recognized that the number of tea seedlings estimated to have been planted in the specified districts amounted to 106,640,606, valued at Shs 42 billion. Of this, Shs 8 billion had already been paid to eligible nursery bed operators, and NAADS committed Shs 7 billion for payment.

The outstanding balance of Shs 27 billion was agreed to be paid in phases, with 20 per cent interest to be applied. Additionally, 40 per cent of the total value of the tea seedlings that the government was unable to procure would be paid after a joint verification exercise by both parties.

Subsequently, the farmers sought execution of the consent judgment and taxed bill of costs before the court registrar, who ordered respondents to pay them Shs 60 billion plus 20 per cent interest.

Upon appeal by NAADS and the Attorney General, justice Magala dismissed their appeal and upheld the order for the government to pay over Shs 60 billion to the farmers. However, she reduced the interest to 10 per cent, noting that the agreed-upon interest was indeed 10 per cent, not 20 per cent.

The judge emphasized that once a consent judgment is endorsed by the court, it becomes a full and final settlement of the dispute and cannot be altered without due process.