Court declares petrol firm insolvent over sh488.8m debt
Justice Patience Rubagumya, on July 21, 2026, ruled that the petroleum trading company was unable to pay its debts and ordered that it be wound up under the Insolvency Act. The judge also appointed the Official Receiver as the company's provisional liquidator, whose identity is yet to be disclosed.
Court declares petrol firm insolvent over sh488.8m debt
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The Commercial Division of the High Court has declared Eco Petrol Uganda Limited insolvent over its failure to pay an outstanding debt of about sh488.8 million owed to China Nanjing International Limited.
Justice Patience Rubagumya, on July 21, 2026, ruled that the petroleum trading company was unable to pay its debts and ordered that it be wound up under the Insolvency Act. The judge also appointed the Official Receiver as the company's provisional liquidator, whose identity is yet to be disclosed.
Through its lawyer, Allan James Mwigo of Signature Advocates, China Nanjing International Limited, an authorised economic operator and construction company, petitioned the court after Eco Petrol Uganda Limited allegedly failed to honour a 2021 consent judgment requiring it to pay sh500 million as the decretal sum and sh10 million in legal costs.
“In accordance with Regulation 97(a) of the Insolvency Regulations, the Official Receiver is hereby appointed as the Respondent's provisional liquidator. Accordingly, this petition is granted with the following orders: A declaration is hereby issued that the Respondent is unable to pay its debts; an order for the winding up/liquidation of the Respondent is hereby issued; and the Official Receiver is hereby appointed as the Respondent's provisional liquidator," Justice Rubagumya said.
Court heard that on March 23, 2021, China Nanjing International Limited and Eco Petrol (U) Limited entered into a consent judgment in Civil Suit No. 2018 under which Eco Petrol agreed to pay sh500 million as the decretal sum and sh10 million in legal costs.
The court noted that Eco Petrol admitted the existence of the consent judgment in its affidavit in reply.
However, through its lawyer, Daniel Jakisa Daniel of Elda Advocates, Eco Petrol Uganda Limited argued that the company remained operational and solvent, continued to conduct business, owned substantial assets and was capable of meeting its obligations, including the debt owed to China Nanjing International Limited.
The company further contended that the petitioner had not exhausted other available enforcement mechanisms, such as attaching its known properties.
Justice Rubagumya observed that Eco Petrol had not adduced evidence to support its claim that it was solvent or capable of settling the outstanding debt.