Uganda: Ubl Sues Distributor Over Shs5.19b

15 September 2021

Uganda Breweries Limited (UBL) has sued its distributor for northern Uganda seeking recovery of more than Shs5.19b.

In a case filed before the Commercial Division of the High Court, UBL claims that Bencher Investments and Trading Company, together with its Managing Director Eric Olobo, breached contract and have refused or ignored to pay for supplied goods.

According to court documents, UBL claims that its distributor has refused to pay money both in liquid cash and empties to a tune of Shs5.19b arising from a distributorship.

Documents indicate UBL Bencher Investments to distribute its products in northern Uganda covering a number of districts, among which included Lira, Pader and Amolatar.

The terms of the distributorship agreement, according to court documents in court, required Bencher Investments to request and place orders for a range of products, some of which would be supplied on credit on condition that it supported and enable expansion of UBL's market in northern Uganda.

The arrangement bore fruits increasing Bencher Investments and UBL's sales in the region.

However, UBL claims, Bencher Investments failed or ignored to remit proceeds from sales despite several reminders.

Acting through Ortus Advocates, UBL claims that whereas Bencher Investments made significant improvement in its sales it continued to hold onto what was due to it failing to settle an outstanding sum, even after promising to do so on December 15, 2017.

Under terms of the Framework Agreement, Bencher Investments had acknowledged indebtedness to UBL to a tune of Shs5.19b and executed a debenture over all the assets of the company as security for payment of the outstanding sums.

The two companies had entered a Framework Agreement, which had been secured by Mr Olobo as a personal guarantor, for a period of one year under the terms that UBL would recover its outstanding sums.

However, the agreement was breached and on February 4, 2020 UBL, acting through its lawyers, wrote Bencher Investments and Mr Mr Olobo demanding for the immediate payment of the sums due within a period of 14 days.

The notice, despite several reminders, was ignored and neither Bencher Investments nor Mr Olobo have honoured UBL's demand.

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