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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
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Dear Sir/Madam, I am running a Trade Business for Khat.

Customer Question

Dear Sir/Madam,

I am running a Trade Business for Khat. By 24 June 2014 this will be illegal. However my trade contracts are for far longer period. And because of this my supplier is demanding ca £ 3 million for compensation due to the sudden change of law. My own business suffers also major including people working for me. The short notice of implementing this law makes it impossible for all participants to re- allocate their business.

The Government neglect their own advice of putting a reasonable time period in place with as argument that this law will be only effective with quick activation of the Law. Great for them, but impossible for us. So I end up with huge losses, which are thanks to this quick activation.

Question is what can we do against this. Can we sue the government for not putting reasonable time period in place to amend our business. We have tried to contact Home Office but they have only respond in formal way that it isn't allowed to trade.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.

Alex J. :

Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Where is your supplier based? Do they have a contractual right to charge £3million?

Do you have a written agreement with them?

Kind regards

JACUSTOMER-p1gmnde8- :

Dear Alex,

JACUSTOMER-p1gmnde8- :

We are based in Birmingham and London

JACUSTOMER-p1gmnde8- :

I have a supplier, who demands this based on the agreement. And I have this in writing.

Alex J. :

Hi, Where is the supplier based? Are they demanding £3million just because you are terminating the agreement? What can you tell me about the agreement?

Alex J. :

Under English law based on what you have told £3million as a payment just for terminating would not be enfroceable as it would ne considered a penalty clause.

JACUSTOMER-p1gmnde8- :

The Supplier is in Kenya. The Khat has to be farmed and that will take time of course. So when the law comes sudden in place this amount won't be able to sell, but it is already produced. So the damage will be that the Khat can't be sold. Although to buy the Khat you go in pre arrangement to ensure regular supply. £ 3 million is 6 months of supply.

JACUSTOMER-p1gmnde8- :

The expectation was that the Government would give a year to get this law in place. What happen also in the Netherlands.

JACUSTOMER-p1gmnde8- :

The house of Lords also recommended this as did the Kenyan government asked UK to give time to make changes possible. UK government promised that they will help in the transition.

JACUSTOMER-p1gmnde8- :

Mameverfresh will go bankrupt. And we aren't able to get this in such a short notice shorted.

Alex J. :

Hi, Thank you. I am afraid you wont be able to claim compensation from the Government. If the Khat is illegal you wont be able to sell it in the UK anymore so technically it is worthless in this country. The farmer will have to sell it else where. Furthermore if he can sell it elsewhere (even for less money) his losses wont be £3million. Unless he has a contractual right to notice and termination I cannot see how the farmer will have any claim against you. I would just say to the farmer, as it has been criminalised in the UK the contract has been frustrated and come to an end.

JACUSTOMER-p1gmnde8- :

Question is do we make any change for any compensation. So we can advice our employers, suppliers and of course ourself.

Alex J. :

Hi thank you. You cannot claim compensation from the Government. What does your contract with the farmer actually say? Kind regards AJ