Thursday, May 23, 2024
BusinessTobacco monopoly battles popular artist in investment land dispute

Tobacco monopoly battles popular artist in investment land dispute

Singer Kemer Yesuf and others face tobacco firm over land near Adama

The National Tobacco Enterprise’s (NTE) two-year legal dispute with prominent artist Kemer Yesuf and his alleged business associates over 44 hectares of investment land has finally progressed, following an order from the Federal Supreme Court affirming lower court’s jurisdiction to hear the case.

The sole tobacco firm locked horns with four defendants led by singer Kemer Yesuf after the latter allegedly took over the land located just six kilometers from Adama town in Oromia regional state.

According to court documents, NTE acquired 71.64 hectares of land for 13.8 million birr in 2015 from the Development Bank of Ethiopia (DBE). The documents state that DBE auctioned the land after Summit Agro-Industry Plc, which had been using the land for flower farming, failed to repay its debt to DBE.

NTE claims it obtained title deeds for 54 hectares, leaving the remaining 17.64 hectares for surrounding farmers who already occupied the land and were difficult to relocate. The documents attribute to NTE that the surrounding small-scale farmers produce tobacco and supply NTE.

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The title deeds to the land were issued by the Eastern Shoa Rural Land Administration office, according to court documents. NTE claims it entered into an investment agreement with the Oromia Investment Commission and began cultivating and processing tobacco farming on the 54-hectare land. The project was overseen and supported by the East Shoa Investment office, the document reads.

Although the land was provided and administered by local offices, NTE was a federal enterprise. NTE was a state-owned enterprise until 70 percent of it was sold to Japan Tobacco International (JTI) in December 2017 for an investment of approximately one billion dollars.

The dispute arose in June 2021 when a group of individuals allegedly demolished fences and trespassed onto 44 hectares of NTE’s tobacco investment land. Since then, NTE has only been able to control 10 hectares while the first defendant, Kemer, allegedly rented the 44 hectares to commercial crop farmers.

In July 2021, NTE filed a legal complaint against defendant Kemer, the Adama Town Investment Office, the Adama City Land Administration, and the East Shoa Zone Investment Office at the Adama Special Zone High Court.

However, the Adama Special Zone High Court declined to exercise jurisdiction over the case, stating that ordinary courts lack jurisdiction over such investment disputes. NTE then appealed to the Oromia Supreme Court.

In January 2022, the Oromia Supreme Court ruled, affirming the Adama High Court’s decision that courts lack jurisdiction over the dispute.

In court arguments, Kemer’s attorney contended that NTE’s investment license had been revoked by the Adama City Land Administration because NTE failed to develop the land. As such, the defense argued that Kemer legally obtained the land from the Adama City Land Administration, rather than “illegally seizing it.”

The three judges on the Oromia Supreme Court panel also suggested that the solution lies with investment bodies higher up, not the courts. According to the Chaffe Oromia region’s law, only the Oromia Investment Board may make a final decision on investment cases. As a result, the Oromia Supreme Court dismissed the case, stating that neither the Adama High Court nor the Oromia Supreme Court has the authority to adjudicate the dispute.

However, NTE argued three basic points, among others.

First, the Enterprise alleges that its investment license was not validly revoked by the Adama City Land Administration. It claims that this agency had no role in issuing either the investment license or providing the land to NTE. Rather, the Eastern Shoa Land Administration, which leased the land to the tobacco monopoly, and the Oromia Investment Commission, which granted the investment license to NTE, were the authorized bodies.

Moreover, the Oromia Investment Board did not make a decision to revoke NTE’s investment license, according to the Enterprise’s claims. Thus, the tobacco manufacturer maintained that the dispute should be heard by a court since the relevant agencies were in conflict, NTE alleges. Second, NTE claims that although the land is located in Oromia, it is a federal investment. Therefore, the company argued that the regional court lacks authority to render a final judgment on a federal business entity.

Third, NTE alleges that an investment license is revoked only if the investor fails to develop the land. However, NTE claims to have been cultivating 44 of the 54 hectares and processing tobacco on the land since receiving it in 2015.

After failing to secure a legal venue from the Oromia Supreme Court, NTE appealed to the Federal Supreme Court.

In January 2023, the Federal Supreme Court’s a panel of five justices’ cassation bench issued a final judgment and remanded the case to the Adama Special Zone High Court for adjudication.

In the Federal Supreme Court, the tobacco enterprise filed a complaint against Ato Kemer Yusuf, the Adama Town Investment Office, the Adama City Land Administration, and the East Shoa Zone Investment Office.

None of the defendants appeared at the hearings before the Federal Supreme Court.

The defendants argued that no court has the authority to review an investment license terminated by any investment body in the country, according to the Supreme Court’s document. Thus, the defendants maintained that the decision of the Adama investment office was final and non-reviewable.

The Supreme Court ruled that the judiciary has inherent power to adjudicate any kind of case, including those related to investments. The Court also stated that this is the only way for the judiciary to check and balance the actions of the executive branch and ensure access to justice.

The Supreme Court determined that there is no doubt the tobacco enterprise acquired the land through a legal auction process from DBE and was legally awarded an investment license and land lease.

Ultimately, the Federal Supreme Court stressed that the lower court should investigate whether the tobacco enterprise’s investment license was terminated in accordance with legal procedures or arbitrarily. The federal court stated that an investment license can only be revoked if the investor fails to develop the land or if the land is needed for public interest.

As a result, the Federal Supreme Court reversed the decision of the Oromia Supreme Court and ruled that the courts have the authority to adjudicate the investment dispute. The Court therefore ordered the Adama High Court to rehear the case.

However, the Federal Supreme Court also issued one ruling that impacts NTE. It vacated the injunction that had previously prevented the defendants from constructing any buildings on the land they allegedly seized. This ruling effectively permits the defendants to undertake construction on the 44 hectares that remain under their control.

Following the Federal Supreme Court’s verdict, the Adama Special Zone High Court resumed adjudicating the investment dispute upon remand. The court set a hearing for July 14, 2023 to take testimony from NTE’s witnesses and the four defendants.

However, witnesses for Kemer Yusuf failed to appear.

The judges ordered Kemer’s attorney to pay 1,400 birr to compensate NTE for their witnesses’ transportation costs.

The court adjourned the hearing until July 24, 2023.

Contributed by Ashenafi Endale & Selamawit Mengesha

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