Beer company ordered to pay fuel firm sh322m

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The Commercial Court has ordered Nile Breweries Ltd to pay shillings 322 million to Fuel Stick Uganda Ltd for breach of contract over the supply of Biofuel Conditioner S19 delivered in 2022.

In a judgment delivered on February 9, Justice Patience Rubagumya said Nile Breweries failed to honour its payment obligations despite receiving and accepting the consignment.

Court records show that Fuel Stick Uganda supplied the product (fuel sticks) between March and April 2022.

The judge noted that Nile Breweries’ security team signed and stamped the delivery notes and the company also issued a Goods Received Note for purchase order number 168600, confirming receipt of the goods.

“The conduct of the defendant amounted to acceptance of the delivered fuel stick,” Justice Rubagumya ruled.

Accordingly, the judge awarded Fuel Stick Uganda shillings 322 million as the outstanding amount due. In addition, the judge awarded shillings 45 million in general damages, noting that the supplier had been deprived of the use of its money for over three years and suffered inconvenience as a result of non-payment.

The court directed that the shillings 322 million will attract interest at a rate of 24% per annum, while the shillings 45 million in general damages will attract interest at 6% per annum.

Justice Rubagumya said Nile Breweries had the opportunity to inspect the delivered fuel stick and to reject it if it was counterfeit, failed to meet the required standards, or lacked certification from the Uganda National Bureau of Standards, but it did not do so.

“Also, no evidence was adduced to validate the allegation that the delivered fuel stick was counterfeit, as alleged. Therefore, the delivered Biofuel Conditioner S19/fuel stick was not counterfeit, considering that it was never rejected by Nile Breweries,” she ruled.

Justice Rubagumya said Nile Breweries’ retention of the goods without rejecting it amounted to acceptance, making the company liable for payment.