BAKHERESA Grain Milling has sued the Uganda Railways Corporation over the 840 tonnes of wheat that were destroyed when MV Kabalega sank in Lake Victoria in 2005.
Bakheresa is demanding sh727.9m as compensation from the corporation.
The company claims that it contracted the corporation to transport the wheat from Dar-es-Salaam, Tanzania to Kampala
But the cargo was not delivered because the Port Bell-bound ship sank to the bottom of Lake Victoria after a collision with another ship, the MV Kaawa, which was heading to the Tanzanian port of Mwanza.
According to Bakheresa, some containers of wheat got lost, while others were damaged.
It added that it had stopped its operations because of the losses it incurred when the ship sank.
â€œDespite numerous remainders and notices to sue, the defendant has failed to comply,â€ the company said.
The High Court registrar, Vincent Lugabo, has given the Uganda Railways Corporation 15 days to defend itself.
When the ship sank, a committee was set up to probe the accident.
John Kaliisa, who was steering Kabalega at the time it collided with MV Kaawa, told the committee that he did not know the steering regulations.
The managing director of the corporation, Daudi Murungi, said the ship was not insured.
He said the ship was last insured in January 2004 but the licence was not renewed because of a â€œtechnicalityâ€ that the board was sorting out with the insurer.
The 840 tonnes of wheat belonging to Bakhresa was also not insured, Murungi added.
Uganda Railways sued over wheat