Court orders company to pay over sh5b to Ugandan brewery

________________

The Commercial Division of the High Court has ordered Bencher Investments & Trading Co. Ltd to pay close to sh5.2b to Uganda Breweries Limited (UBL) in an outstanding debt dispute.

In a judgment delivered on March 17, 2026, Justice Stephen Mubiru ruled in favour of UBL, directing the company and its guarantor to jointly and severally settle the debt amounting to sh5,193,418,449.64.

Court heard that under an agreement dated February 18, 2010, UBL appointed Bencher Investments as a distributor of its beverages in the districts of Lira, Pader, and Amolatar. The distributor would place orders and receive products on credit.

However, by December 1, 2017, the company had accumulated a debt of over sh5.19 billion. The parties later entered into another agreement on December 15, 2017, outlining how the debt would be cleared within one year. As part of the arrangement, the company executed a debenture over its assets, while the second defendant provided a personal guarantee as security.

Despite the agreement, the defendants failed to clear the debt, prompting Uganda Breweries to issue a demand notice on February 4, 2020, before filing the suit in court.

In his judgment, Justice Mubiru noted that there was no justification to depart from the legal principle that costs follow the event, meaning the losing party must bear the costs of the suit.

The court ordered the defendants to pay the outstanding sum, along with interest at a rate of 20% per annum from August 31, 2021, until full payment. They were also directed to meet the costs of the suit.

Justice Mubiru said the interest on the delayed payment is intended to compensate Uganda Breweries for being deprived of the money. In addition, the court ordered the company to pay the costs of the suit until full payment is made.

“The courts presume that the delayed payment of the money deprives the injured party of the ability to invest the sum owned. An award of the interest in commercial disputes thus serves the same purposes as an award of general damages as compensation. sh5, 193,418,449.64 as the outstanding amount due and interest thereon at the rate of 20% per annum from the date of filing the suit, August 1, 2021, until payment is full and the cost of the suit,” Mubiru said.

 Bencher Investments response

Bencher Investments, through its lawyers from MOM Advocates, argued that at all material times, its managing director, Eric Olobo, who was also the sole signatory to the company’s bank account during the period of the distributorship, acted as the company’s sole representative.

The lawyers further submitted that the director had full power and authority to execute the contract on behalf of the company.