Court Declines Invitation to Review Vinci Coffee Agreement

The High Court sitting in Kampala has dismissed without cost an application for the judicial review of the agreement between the government of Uganda and Uganda Vinci Coffee Company. 

The application by Henry Byansi and Michael Aboneka, both city lawyers sought a court declaration that the actions of the Minister of Finance Planning and Economic Development, Matia Kasaijja to secretly handpick Vinci to singly manage the production, export, and set prices of coffee beans and related products was at the detriment of other able Ugandan firms and therefore null and void. 

They also wanted the court to declare that the failure of Kasaija to follow legal and administrative processes and to make adequate consultations with the Solicitor General, and Ministry of Agriculture among others was illegal, null, and void, and quash the agreement. 

In his affidavit supporting the application, Byansi, who said that he owns a small-scale coffee farm, said the Deed of Amendment and Restatetion of the project implementation Agreement signed with Vinci in its entirety violated the guiding principles, commercialized, liberalized, and sustainable coffee sub-sector contrary to the National Coffee Policy, 2013 and the National Coffee Act. 

He described the agreement as illegal, unfair, arbitrary, highhanded, irrational, ultra vires, null and void, and faulted the minister for failure to carry out consultations and approvals with the different government ministries and departments, saying the agreement usurped the powers of some government departments, creating a monopoly in the coffee industry and that it also failed to comply with mandatory statutory provisions of the Procurement and Disposal of Public Assets Act, Private Partnership Act, National Coffee Act, and the National Coffee Policy. 

For his part, Aboneka contended that the agreement even lacked a termination clause and neither did it provide for a performance guarantee as required by law, which renders it illegal. The Attorney General who was jointly sued with Vinci objected to the application, saying it was premature. 

In an affidavit sworn by Moses Kaggwa the acting Director of Economic Affairs at the Ministry of Finance Planning and Economic Development, the Attorney General who is the official respondent in all cases where the government is sued, said that Parliament had on  May 18, 2022, adopted a report of the Committee on Tourism, Trade, and Industry which resolved that government reviews the agreement and reports back to parliament on actions taken within three months. 

The affidavit also added that the government executed the agreement in line with liberal economic policies to promote and support investment in coffee in line with all the necessary laws and policies. For its part, Vinci also opposed the application saying that it had not been permitted to set prices of coffee beans and related products and that it is mandated to buy coffee at a minimum price of the prevailing international market prices or at the price indicated by the Uganda Coffee Development Authority. 

In an affidavit sworn in by Matovu Moses the Company Secretary, Vinci also said that contrary to what the applicants alleged, the agreement like all others, allowed parties to terminate it irrespective of whether there was any express clause on termination. In his ruling, High Court Judge Emmanuel Baguma, said because parliament had taken interest in the agreement and had recommended that government reviews the agreement, it would be premature for the court to interfere. 

“It is not in dispute that parliament on 18th May 2022 adopted a report from the sectoral committee of parliament on Tourism, Trade, and Industry and resolved that government reviews the agreement and reports back to parliament on actions taken…Based on the above analysis, it is apparent that the due process of the entire Deed of Amendment and Restatement of the Project Implementation Agreement dated 10th February 2022 is still ongoing. I, therefore, do not find any reason whatsoever to interfere with the matter which is being investigated by parliament. It is my view that parliament should be left to do its work…It is my considered view that this matter was brought before court pre-maturely since the due process was still ongoing,” Baguma ruled.  

Members of Parliament unanimously resolved to cancel the coffee agreement signed with Vinci accusing the government of sidestepping all other stakeholders in the sectors. While they debated the matter, MP after MP wondered how the government would sign such an agreement with a company whose known shareholder Enrica Pinetti had failed to deliver on other contracts such as the construction of Lubowa Specialised Hospital even after the government extended a lot of money to her.

Speaking days later after parliament resolved to cancel the agreement, President Yoweri Kaguta Museveni said anybody fighting the agreement was fighting him because he was the face behind it. More than three months after the parliamentary resolution, the government is yet to report back on the actions it has so far taken toward reviewing the agreement. 

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