Umeme ordered to pay plastics firm sh100m over unlawful disconnection
The company sued Umeme after its factory in Katoogo zone, off Nabweru Road in Kawempe division, Kampala, remained without the three-phase electricity supply required to operate its machinery for about 13 months.
Umeme ordered to pay plastics firm sh100m over unlawful disconnection
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The Court of Appeal has awarded Edroch Plastics Co. Limited sh100m in general damages after finding Umeme Limited liable for unlawfully disconnecting electricity to the company’s factory and failing to restore the required three-phase supply within a reasonable time.
In a judgment by Justice Esta Nambayo, the court set aside the High Court’s dismissal of the company’s suit and ordered Umeme to pay the damages and costs of the suit and appeal.
The company sued Umeme after its factory in Katoogo zone, off Nabweru Road in Kawempe division, Kampala, remained without the three-phase electricity supply required to operate its machinery for about 13 months.
The company, which manufactures plastic hangers, had applied for electricity in 2007 and was connected under account number 200475559.
According to court records, Umeme disconnected electricity to the factory and neighbouring premises in July 2012 following reports of electricity theft in the area.
The company was not identified as responsible for the theft, and electricity supply was subsequently restored to the area. However, the factory continued to receive only two of the three phases required to operate its machinery.
The company’s managing director, Noah Muwonge, told the court that he repeatedly contacted Umeme officials to seek restoration of the supply through visits, telephone calls and emails.
A complaint letter dated October 10, 2012, which Umeme received on October 16, 2012, was admitted as evidence.
Muwonge testified that the factory’s effective electricity supply was restored on August 29, 2013, after the company had filed its suit.
However, during the trial, Umeme’s witnesses gave inconsistent explanations about the duration of the interruption and when the missing phase was restored.
The company filed Civil Suit No. 482 of 2013 in the High Court’s Commercial Division in August 2013, seeking restoration of electricity, special and general damages, interest and costs.
On October 10, 2018, the High Court dismissed the suit, prompting the company to appeal to the Court of Appeal.
In its appeal, the company challenged the High Court’s findings that Umeme had lawfully disconnected its electricity supply and that the particulars of negligence set out in its plaint did not establish negligence.
The appeal proceeded in the absence of Umeme and its lawyers. Justice Nambayo noted that the company was still required to prove its case despite the respondent’s absence.
On the legality of the disconnection, the judge considered Clause 15.5.1 of the Electricity (Primary Grid Code) Regulations, 2003, which permits a licensee to disconnect a consumer immediately where the consumer has obtained electricity contrary to the Code.
The court found that Umeme’s evidence established that electricity had been disconnected in the area because of suspected power theft, but did not establish that Edroch Plastics was responsible.
Umeme’s district manager, Hussein Mubiru, testified that investigations had identified a maize mill as responsible for the theft.
Justice Nambayo ruled that suspicion alone did not satisfy the requirements for disconnection under the relevant provision.
The judge found that the High Court had erred in holding that the existence of electricity theft in the area justified disconnecting the company’s supply.
The court noted that Umeme’s witnesses confirmed that the factory required three-phase electricity and that its machinery could not operate on a two-phase supply.
Mubiru could not explain why the company had remained without the required supply for more than 13 months or why restoration had taken so long.
Justice Nambayo found that Umeme had failed to exercise reasonable care in addressing the fault after being notified of the complaint. The court held that the prolonged failure to restore the required supply had disrupted the company’s business.
The company had sought sh275.991m in special damages, comprising sh192.6m for damaged work in progress and sh83.391m in retained loss. It also sought Sh200m in general damages.
However, the court declined to award special damages, finding that the company had not specifically pleaded and adequately explained the basis for the separate losses claimed.
The judge said the financial statements and evidence from the company’s auditor did not sufficiently establish the claimed amounts or reconcile them with the other losses pleaded in the suit.
In assessing general damages, the court considered the duration of the interruption, the commercial purpose of the electricity supply, the inability to operate the factory’s machinery and the company’s efforts to obtain reconnection.
Justice Nambayo awarded sh100m in general damages for the business disruption and inconvenience caused by the prolonged interruption.
The court dismissed the claim for sh275.991m in special damages but ordered Umeme to pay the company’s costs in the High Court and the Court of Appeal.
The judge also found that no further order for reconnection was necessary because the electricity supply had been restored on August 29, 2013.