UK bank sues SGS for sh17b
A UK-based merchant bank, HSBC Equator Bank Plc, has sued the pre-shipment inspection company, SGS (Uganda) Limited for breach of contract. The suit seeks to recover over $7.9m, (about sh17.7b) lost in false declaration.
By Hillary Nsambu
A UK-based merchant bank, HSBC Equator Bank Plc, has sued the pre-shipment inspection company, SGS (Uganda) Limited for breach of contract. The suit seeks to recover over $7.9m, (about sh17.7b) lost in false declaration.
The bank’s attorneys, Mugerwa and Masembe Advocates told Justice James Ogoola, the head of the Commercial Court on Friday that HSBC Bank was also seeking interest on the whole amount at the variable rate of London Interbank Offering Rate for one month and 3% per annum from June 2000 todate.
The bank also asked the court to order SGS to pay $900,000 (about sh1.8b) as legal costs it (bank) incurred in investigating the breach.
The court heard that SGS breached the contract by falsely stating that there were sufficient coffee stocks held by its (bank’s) borrower, H.M.Nsamba and Sons Limited, a Kampala-based coffee dealer.
Court heard that the bank appointed SGS in 1999 to verify and determine the volume, grades, values and status of Nsamba’s coffee stocks held in the warehouse at Kawempe.
Court was told that this followed a short term financing agreement entered between HSBC Bank and Nsamba for a loan $8m, depending on proof the existing coffee sales contracts between him and international coffee buyers, acceptable to the bank.
SGS was also required to confirm the existence of coffee sales contracts between Nsamba and foreign buyers and the value of those contracts, availability of the coffee stocks and its loading.
Court heard that SGS certified to it that there were sufficient coffee stocks, security and the loading in relation to the products’ export.
Socadec SA, Switzerland, Nsamba’s primary international coffee buyers, certified by SGS, allegedly pre-financed unprocessed purchases by Nsamba and Sons.
A UK-based merchant bank, HSBC Equator Bank Plc, has sued the pre-shipment inspection company, SGS (Uganda) Limited for breach of contract. The suit seeks to recover over $7.9m, (about sh17.7b) lost in false declaration.
The bank’s attorneys, Mugerwa and Masembe Advocates told Justice James Ogoola, the head of the Commercial Court on Friday that HSBC Bank was also seeking interest on the whole amount at the variable rate of London Interbank Offering Rate for one month and 3% per annum from June 2000 todate.
The bank also asked the court to order SGS to pay $900,000 (about sh1.8b) as legal costs it (bank) incurred in investigating the breach.
The court heard that SGS breached the contract by falsely stating that there were sufficient coffee stocks held by its (bank’s) borrower, H.M.Nsamba and Sons Limited, a Kampala-based coffee dealer.
Court heard that the bank appointed SGS in 1999 to verify and determine the volume, grades, values and status of Nsamba’s coffee stocks held in the warehouse at Kawempe.
Court was told that this followed a short term financing agreement entered between HSBC Bank and Nsamba for a loan $8m, depending on proof the existing coffee sales contracts between him and international coffee buyers, acceptable to the bank.
SGS was also required to confirm the existence of coffee sales contracts between Nsamba and foreign buyers and the value of those contracts, availability of the coffee stocks and its loading.
Court heard that SGS certified to it that there were sufficient coffee stocks, security and the loading in relation to the products’ export.
Socadec SA, Switzerland, Nsamba’s primary international coffee buyers, certified by SGS, allegedly pre-financed unprocessed purchases by Nsamba and Sons.