Kampala, Uganda | URN | The Commercial Division of the High Court in Kampala has ordered Roko Construction Limited to pay Assa Abloy (U) Limited 1.39 million dollars (approximately sh5.7billion) in outstanding payments for doors, accessories and ironmongery supplied and installed at Mulago National Referral Hospital.
In a judgement delivered by Justice Stephen Mubiru, Assa Abloy was awarded US$1,391,667.58, together with interest at nine per cent per annum from August 20, 2020, until payment in full, and costs of the suit.
However, the same court has dismissed the petition against the Attorney General, noting that the government was not a party to the supply contract between Assa Abloy and Roko Construction.
The dispute arose from supplies made for construction works at Mulago Hospital, where Roko was the contractor engaged to execute the project.
According to court records, Roko placed an initial order in June 2017 for 2,398 steel door sets, frames, wooden leaves, transom panels and fixing accessories, valued at US$1.57 million.
The quantities were subsequently revised, with the total number of door sets increasing to 2,716.
A separate purchase order issued in January 2019 covered additional ironmongery valued at US$365,342.97, bringing the total value of the supplies and installation to US$2.58 million.
Assa Abloy told the court that the goods were supplied and installed at the hospital between 2017 and 2019, but Roko failed to settle the outstanding balance despite repeated demands for payment.
The company then sought to recover US$1,391,667.58, claiming that only US$1.19 million had been paid against the total contract value.
However, Roko disagreed, arguing that it had ordered only 1,784 doors and that the quantities allegedly supplied and installed had not been adequately proved.
The construction firm also challenged the absence of formal delivery notes and goods-received notes, questioned the reliability of the supplier’s records and argued that some doors were defective or had been repossessed.
The Attorney General, who had been sued as the second respondent, maintained that the government had no contractual relationship with Assa Abloy and had fulfilled its obligations to Roko under the separate construction contract.
Justice Mubiru has found that a valid and binding contract existed between Assa Abloy and Roko, based on the quotation, Roko’s requisition, subsequent performance and partial payments.
The judge noted that Roko’s own witnesses acknowledged that Assa Abloy supplied and installed doors and door frames at the hospital.
The court also relied on shipping documents, Uganda Revenue Authority correspondence showing that 63 consignments had been cleared over the relevant period, and a project progress report indicating that Assa Abloy had achieved 85 per cent completion.
Justice Mubiru further considered a joint physical verification exercise conducted on August 20, 2020, and subsequent emails from Roko’s Operations Manager, Beyers Strydom, confirming that 2,716 doors had been installed, with the supplies valued at US$2,581,667.58.
The judge rejected Roko’s argument that the verification records could not bind the company because the checklist had not been signed by its representatives.
He held that the emails from Strydom provided separate confirmation of the findings and that the operations manager had, at the very least, apparent authority to communicate the company’s position.
The court also dismissed Roko’s argument that the absence of formal delivery notes was fatal to the claim and that the delivery could be established through admissions and the conduct of the parties.
Justice Mubiru observed that Roko’s own witnesses had described the installation process, while the company’s partial payments and subsequent assurances of further payments supported the existence of the contractual relationship.
The court also rejected Roko’s defence that some doors were defective or did not meet the required specifications.
Justice Mubiru noted that the allegations had not been included in Roko’s formal defence and were introduced through testimony during the trial.
He further questioned the evidential value of an unsigned report relied upon by the construction firm, noting that its witness had not authored it and could not confirm whether the alleged defects had been rectified by 2020.
Under Section 43(1)(c) of the Sale of Goods and Supply of Services Act, the judge has explained that , a buyer may be deemed to have accepted goods if, after a reasonable period, it retains them without notifying the seller of rejection.
The court found that Roko had installed and retained the doors for an extended period, made partial payments and failed to communicate a clear rejection of the goods to Assa Abloy.
It also dismissed the allegation that Assa Abloy had repossessed 1,358 doors, finding no evidence that the installed doors had actually been removed from the hospital.
The judge said the supplier’s earlier warning to withhold unpaid goods did not establish that repossession had taken place.
On the Attorney General’s liability, Justice Mubiru applied the doctrine of privity of contract, which generally prevents a person who is not a party to a contract from being held liable under it.
The judge found that the supply agreement was between Assa Abloy and Roko, with the government benefiting only because the doors were installed at a public hospital.
He ruled that Section 64(3) of the Contracts Act, which allows certain third parties to enforce contractual terms intended for their benefit, does not create a basis for imposing contractual obligations on a non-signatory.
The court also found that the government had not directly engaged Assa Abloy or been given an opportunity to accept or reject the goods in a manner that would establish liability under Section 57 of the Contracts Act.
Consequently, the suit against the Attorney General has been dismissed with costs.
Although Assa Abloy sought general damages in addition to the unpaid contract sum, the judge declined to award them, reasoning that the company’s loss was financial and could be adequately compensated through interest on the outstanding amount.
The court accordingly entered judgement against Roko Construction for US$1,391,667.58, interest at nine per cent per annum from August 20, 2020, until full payment, and the costs of the suit.
The judgement was delivered electronically.
The plaintiff was represented by Arcadia Advocates, while Roko Construction was represented by Newmark Advocates.
The post Court orders Roko to pay Sh5.7 Billion in Mulago doors case appeared first on The Independent Uganda:.