By Frank Lukwago, New Vision/NECJOGHA
Over 500 farmers have dragged Continental Tobacco Uganda Limited to court, demanding sh2.5b in compensation for breach of contract.
The farmers dragged the company to the Civil Division of the High Court alongside the Attorney General, who is the principal legal adviser of Government.
The farmers are seeking payment of sh2.5b for supplying tobacco to Continental Tobacco Uganda, a company licensed to buy and process tobacco.
According to court documents filed on Wednesday last week, the company sponsored tobacco farmers in 2017 and 2018 as authorized by Government.
The farmers allege that they entered into a contract with the company to grow tobacco. Under the contract seen by New Vision, the plaintiffs were registered and recognized as company farmers and grew tobacco as advised by the company.
“We did not sell the harvested crop to any other party and could not enter into similar contracts during the contract period,” the farmers contend in their document.
Court documents indicate that under the contract, the company extended loans to farmers in form of farm inputs and in the course of time or harvests to recover the loans from sales by the farmers.
The company also extended loans to farmers in form of tobacco seeds, fertilisers and pesticides.
The farmers claim they grew tobacco as required by the company and delivered it for purchase at the different outlets operated by the company.
“The company received the tobacco and did issue to the plaintiffs receipts indicating how much tobacco was sold,” reads the plaint.
The farmers claim that the company is or, was statutorily required to pay them for the tobacco, in accordance with terms of the sponsorship agreement and the grade specification, in vain.
“The company purchased the tobacco in 2017 from the plaintiffs but has neglected, refused or failed to pay them.”
The farmers claim that due to the actions and omissions of the company, they have suffered loss of income for tobacco growing for which they seek special damages.
The claimants fault Government for failing to carry out its statutory supervisory duties relating to performance of the contracts entered into by them and the company.
The case is yet to be fixed for hearing.