Daniel Mdachi Mnene Suleiman told a court in Mombassa, Kenya, that Campbell Bridges, who was beaten and stabbed to death in August 2009, had been involved in the bitter dispute with villagers at his ranch.
Mr Suleiman, who along with six other people has pleaded not guilty to murdering Mr Bridges, told his trial yesterday: "We had a problem with Bridges because he used to come to our farm in company of his armed security threatening us with eviction."
Before 2006, he said he sold gemstones to Mr Bridges but the pair fell out after he began mining the precious resources himself.
The Scot, he alleged, claimed he was the only one with the right to mine for the stones which are worth fortunes on the international markets.
"I used to sell gemstones to him in early 1990s but when I started mining gemstone at Mwasiu ranch things changed until we used to quarrel with him over the mining rights he had in the place," said Mr Suleiman.
The co-accused argued that although Mr Bridges had been given prospecting rights after settling there in 1971, another man, Jack Shako, was in fact given that option four years later and he had no further claim.
Mr Suleiman, who claims to have been hundreds of miles away in Nairobi at the time of the killing, said he was married into the Shako family and had the right to mine for gemstones.
He added: "That is why I kept on fighting against Bridges' domination of mining of gemstones in the area."
His co-accused also deny murdering Mr Bridges in southern Kenya.
The trial continues.