In what appears to be a replay of the biblical Goliath and David tale, a very less known Uganda businesswoman has beaten Kenya Revenue Authority in its backyard in a case that will have huge implications on how goods destined for Uganda transit through Kenya, writes GEOFREY SERUGO.
Sometime in April in Mombasa, Deborah Kigongo sat quietly in the corner of Kenya’s appeals court and said a prayer: “this should be the last time I am making a costly journey to this court.”
For the nth time, Kigongo had travelled to Kenya to follow up a case that has dragged on in Kenyan courts for more than twelve years. A case in which she battled Kenya Revenue Authority, the tax collector, for selling her goods illegally.
Kigongo is a Kampala-based businesswoman who, until 2011, ran a successful entity, importing spare parts of trucks and road construction equipment. Sometime in 2012 when her goods, in three containers worth $120,000, landed in Mombasa, awaiting clearance, one container disappeared. It was later discovered that it had been auctioned by KRA among the goods it said had overstayed at the port.
On April 26, 2024, Kenya Court of Appeal judges Gatembu Kairu, J. Lesiit, and G.O Odunga ruled in her favour, declaring that KRA had indeed sold Kigongo’s goods illegally after they failed to notify her through a medium that was accessible in Uganda.
In serious rebuke to KRA, the three judges upheld an earlier judgement which KRA had contested through the appeal. They wrote: “Lack of proper notice to the owner of the goods… was unprocedural and had the effect of vitiating the entire process undertaken by the appellant [KRA] and smirked of impropriety.”
“We find no merit in this appeal and dismiss it with costs to the respondents [Kigongo]”.
Consequently, KRA must pay Kigongo $40,000 (Shs 150m) equivalent to the cost of goods that were sold and it must also pay costs that the businesswoman has incurred in the last 13 years fighting for justice. According to the calculations this newspaper has seen, the costs will amount to almost $90,000 [Shs 338m]. The costs included transport, hotel, lawyers and other expenses.
THE CASE
In 2010, Uganda National Roads Authority (Unra) contracted Kigongo through her company Kaaya Investments Ltd, to supply ground-engaging road construction equipment and accessories.
Kigongo promptly ordered the goods from a supplier in Singapore called Allied Companies. When the goods arrived at Mombasa in May 2012, Kigongo rushed to Evergreen shipping line in Kololo, the firm she contracted to transport the goods from the country of origin to the final destination, to direct her where to go in Mombasa. She also wanted to know how to go about the demurrage charges. She was directed to a clearing agent hired to see through the goods at the port.
On contacting Gulf Badr, a clearing and forwarding firm based in Mombasa, she was told one of the containers had been sold – marking the beginning of long court battles with Kigongo, having to make endless trips between Kampala and Mombasa. In the High court in Kenya, Kigongo accused KRA of “plain robbery” and prayed that they refund the goods they had sold.
FIRST RULING
The case, which was being heard at the Kenya High court Commercial division in Mombasa, drew in traders from Uganda, the Ugandan mission in Kenya, the ministries of Trade and Foreign Affairs, and politicians.
It has led some traders to question the role of the East African Community integration when traders cannot be protected in the bloc. A series of letters have been exchanged between Kaaya Investments Ltd, the owners of the goods; KRA, the minister of Justice and his counterpart in Kenya and the EAC secretariat.
On May 29, 2019, Justice PJ. Otieno of Kenya High court faulted KRA for not taking care of the goods and for failing to notify the owner before selling them.
“I do, therefore, find that the sale by public auction conducted on 25/6/2012 was not validly conducted and that having been so invalid, it did occasion to the plaintiff [Kigongo] an illegitimate and unlawful deprivation of property from which the plaintiff is entitled to be compensated,” the judge declared.
The judge also blamed KRA for publishing the sale of goods in the Kenyan Gazette instead of the East African Gazette that can be accessed by the partner states. Humiliated, KRA, through the commissioner, Customs, contested the ruling by filing an appeal at the Kenya Court of Appeal in Mombasa.
On April 26, 2024, the appeal was thrown out with the strongest rebuke to the Kenyan tax body.
CHASING THE PAYMENT
The battle is not yet over, Kigongo told The Observer recently. This is because the revenue body is dilly-dallying on the payment. As her lawyer filed documents in July in Mombasa to have court orders executed, she was told the entire file could not be traced, igniting another battleline to have the file reconstructed. Kigongo is also enlisting the political front from Kampala to join the fight.
On July 17, 2024, Kigongo wrote to the minister of Justice Norbert Mao asking for his intervention by engaging the politicians in Kenya to see through her payment.
“I call upon your office to intervene into this matter and see that I get fruits of my judgement. It is evident that KRA wants to [refuse to pay] what was awarded to us,” she wrote.
Kigongo says she was happy the truth had come out. In Uganda, traders importing goods through will have a reprieve as KRA and other Kenyan ports authorities will have to tread carefully before auctioning any goods destined for Uganda. For Kigongo, however, the costly trips to Kenya will continue until KRA pays her fully what the courts ordered.