BAT Ordered to Pay Farmers Sh3 Billion

Kampala, Jun 30, 2008 (New Vision/All Africa Global Media via COMTEX) -- BTI | Quote | Chart | News | PowerRating -- BRITISH American Tobacco Uganda (BATU) has been ordered to pay over sh3b to tobacco farmers as compensation for failure to buy their crop.

Justice Fred Egonda-Ntende of the High Court Commercial Division made the ruling on Thursday.

The suit was filed three years ago by 3,000 farmers, mainly from Hoima and Masindi districts.

This is the first case in Ugandan history where peasants have taken a multinational corporation to court and succeeded.

"I am satisfied that BAT was in breach of the contract with the farmers when it failed to buy their tobacco, which it was obliged to under the contract as well as under the Tobacco (Control and Marketing) Regulations," the judge ruled.

"BAT is liable to pay the farmers for the value of the tobacco delivered to its marketing sheds. It is appropriate to take the price provided by the defendant, which puts the average price at sh1,200 per kilo."

Court also ordered the tobacco firm to pay the costs of the suit and 26% interest per annum to each of the farmers on daily balances.

This would bring the total amount to sh3.7b, one of the farmers' lawyers said.

Egonda-Ntende has since been assigned to head the High Court's Family Division, making the tobacco case one of his last rulings at the Commercial Court.

The farmers, through Muwema and Mugerwa Advocates, sued the company in March 2005, seeking to recover sh4b in compensation for breach of contract.

However, the company's lawyer, Dr. Joseph Byamugisha, had said they were verifying the list of the farmers to pay them.

One of the farmers, Sedrach Mwijakubi, told The New Vision,/i> on phone that justice had been done.

"BAT made us to suffer when it abandoned us with the tobacco, which it contracted us to grow and we had nowhere else to sell it."

Mwijakubi, Mukitale Asiimwe, Joshua Byangire, Fenekansi Babyesiza and Solomon Kiiza filed the case on behalf of their colleagues. It was not clear whether the company would appeal the ruling.

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