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Uganda: BAT Ordered to Pay Farmers Sh3 Billion

British American Tobacco Uganda (BATU) has been ordered to pay SH3 Billion 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.
The judge ruled, "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."
"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."

The 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 sh3.7billion, one of the farmers' lawyers said.

The farmers, through Muwema and Mugerwa Advocates, sued the company in March 2005, seeking to recover sh4 billion in compensation for breach of contract.

One of the farmers, Sedrach Mwijakubi said, "BAT made us suffer when it abandoned us with the tobacco, which it contracted us to grow and we had nowhere else to sell it."

Source: New Vision, 29th June 2008
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