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Byansi notes that the coffee sector in the country has many stakeholders including farmers, exporters, associations, and unions such as Bugisu Cooperative Union and Ankole Coffee Produce Cooperative Union among others who were never consulted on the agreement in question.
Two lawyers have petitioned the High Court Civil Division to
quash an agreement between the Government and Uganda Vinci Coffee Company
Limited on grounds that it is illegal and irrational. Henry Byansi and
Michael Aboneka are challenging the agreement signed by Ramathan
Ggoobi, the Secretary to Treasury on behalf of the government and Enrica
Pinetti, an Italian investor and the Uganda Vinci Coffee Company Limited board
chairperson on February 10, 2022.
The agreement grants Uganda Vinci Coffee Company Limited exclusive
rights to buy Uganda’s coffee before the government can look at other
players. The Company is also exempted from paying taxes such as Import
duty tax, Stamp duty, value-added tax, National Social Security Fund, and Pay as
You Earn for ten years. The company also reserves the right to determine the coffee
prices in the country on top of enjoying electricity subsidies among other benefits.
In their application, the lawyers want the court to declare that
the actions of the Minister of Finance and Economic Development to handpick
Uganda Vinci Coffee Company Limited in disregard of able Ugandan firms to
solely manage the coffee business, set coffee prices and related products, is
an infringement on the right to own property and open competition as well as
economic rights of coffee farmers in the country.
They also contend that the agreement is illegal,
unfair and irrational on the grounds that government didn’t follow all legal and
administrative processes and conduct adequate consultations with the Solicitor General,
Ministry of Agriculture, Uganda Coffee Development Authority and other
The applicants also fault the government for failure to seek
requisite approval from the Uganda Revenue Authority before making several tax
waivers in favour of the Company and for failure to comply with the provisions that
govern procurement under the Private Procurement Act and other
The application is supported by Byansi’s
affidavit, in which he states that besides being a Practicing Advocate, he owns
a small scale farm in Bulongo Sub-county in Luuka District where he has been
getting income through selling coffee beans for the last ten years.
Byansi notes that the coffee sector in the
country has many stakeholders including farmers, exporters, associations, and unions such as Bugisu Cooperative Union and Ankole Coffee Produce Cooperative
Union among others who were never consulted on the agreement in question.
"I know that the impugned Deed of Amendment
and Restatement of the Project Implementation Agreement unreasonably
restricts competitive and equitable trade practices in the coffee sector
by purporting to give the 2nd respondent/Company the monopoly to manage the
coffee business at the detriment of other able Uganda firms," says Byansi.
The applicants also note that government doesn't have any
reasonable justification of giving Uganda Vinci Coffee Company Limited
unfettered rights over others to set prices of coffee beans and related
products because this would be a violation of the universal and economic
principles that restrict unreasonable interference and unfair competition
in the economic affairs of individuals and society.
"The respondent’s actions have the chilling
effect of curtailing the constitutionally guaranteed economic rights of
the applicants and those other similarly situated coffee farmers and
traders guaranteed under Article 40 of the Constitution,” reads the
The article guarantees the
right of every Ugandan to carry on any lawful occupation trade or
business. Byansi and Aboneka want the High Court to quash the
agreement between the government and Vinci Coffee Company Limited, saying it is
illegal and of no legal consequence.
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The court is yet to summon the Attorney General who
is the only respondent in this suit to file his defence before the matter is
allocated to a Judge for hearing. In August 2020, the Constitutional
Court nullified a similar agreement granting Great Lakes Ports Limited, which
belongs to Former Foreign Affairs Minister, Sam Kutesa exclusive rights to
clear goods at entry ports.
In their ruling in the matter of Spedag Interfreight Uganda
and two other Companies against the Attorney General and Great Lakes Ports
Limited, the court noted that the government did not have the power to enter
into a contract that limited the petitioners' fundamental rights under Article
(40) (2) of the Constitution.