Lominda Afedraru
1 April 2008
Kampala — CONSTRUCTION firm, M/S Decent Construction (U) Ltd has taken Silver Springs Hotel to court over failure to pay Shs58.3 million debt. The debt accrues from unpaid bills after M/S Decent claimed to have offered construction services to the hotel amounting to Shs325.5 million.
In a case filed at the Commercial Court last month, the company claims that in 2006 the hotel contracted it to carry out renovation and construction work at its premises in Bugolobi, a Kampala suburb but Silver Springs only made part payments leaving a balance that has accumulated interest.
The parties had agreed that 18 per cent interest per annum would be paid to its management inclusive of VAT in the lump sum fee agreed. The construction firm's claims, supported by an affidavit of the managing director, Mr Majeed Khan, saying it carried out the work as expected and presented approved certificates from the architect requesting for payment for work done.
The company avers that it is entitled to money claimed, VAT and interest inclusive. Silver Springs has filed an application seeking Court's permission to allow it file its defence.
The parties appeared before Justice Godfrey Kiryabwire last week to argue the application. The hotel's lawyer, Mr Ebert Byankya argued that it is the interest of justice that his clients should be allowed to defend the case because the money claimed does not arise from a simple contract.
The lawyer relied on the affidavit of Mr Raghir Sing Sandhu, the contractual manager of the hotel who denied claims that Silver Springs owed the claimed money to the construction company.
According to Mr Sandhu the parties agreed that VAT would be catered for by way of seeking a tax exemption. "As soon as we receive a tax refund from Uganda Revenue Authority we shall pass the money to the construction company," read part of Sandhu's affidavit.
According to Sandhu, the company's claim for interest is unfounded and bad in law. M/S Decent Construction R. Adebayo did not object to the application but asked Court to refer the case for mediation.
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