Roko Construction Limited has been ordered by the High court in Kampala to pay Assa Abloy (U) Limited $1.39 million (about Shs 5.7 billion) for doors, accessories and ironmongery supplied and installed at Mulago National Referral Hospital.
In a judgment delivered electronically, Commercial Division judge Stephen Mubiru awarded Assa Abloy $1,391,667.58, together with interest at nine per cent per annum from August 20, 2020, until payment in full, and the costs of the suit.
However, the court dismissed the case against the Attorney General, ruling that the government was not a party to the supply contract between the two companies.
The dispute arose from supplies made for construction works at Mulago Hospital, where Roko was the contractor. Court records show that Roko placed an initial order in June 2017 for 2,398 steel door sets, frames, wooden leaves, transom panels and fixing accessories valued at $1.57 million.
The quantities were later revised, increasing the number of door sets to 2,716. A separate purchase order issued in January 2019 covered additional ironmongery worth $365,342.97, bringing the total value of supplies and installation to $2,581,667.58.
Assa Abloy told the court that it supplied and installed the goods between 2017 and 2019, but Roko failed to clear the outstanding balance despite repeated demands.
The supplier sought to recover $1,391,667.58, saying Roko had paid only about $1.19 million against the total contract value.
Roko disputed the claim, arguing that it had ordered only 1,784 doors and that Assa Abloy had not adequately proved the quantities allegedly supplied and installed.
The construction firm also challenged the absence of formal delivery notes and goods-received notes, questioned the reliability of the supplier’s records and alleged that some doors were defective or had been repossessed.
The Attorney General, who was sued alongside Roko, argued that the government had no contractual relationship with Assa Abloy and had fulfilled its obligations to Roko under a separate construction contract.
Justice Mubiru found that a valid and binding contract existed between Assa Abloy and Roko, based on the quotation, Roko’s requisition, the parties’ subsequent conduct and partial payments.
The judge noted that Roko’s own witnesses acknowledged that Assa Abloy had supplied and installed doors and door frames at the hospital.
The court also relied on shipping documents, Uganda Revenue Authority correspondence showing that 63 consignments had been cleared during the relevant period, and a project progress report indicating that Assa Abloy had achieved 85 per cent completion.
Justice Mubiru further considered a joint physical verification exercise conducted on August 20, 2020, and subsequent emails from Roko’s operations manager, Beyers Strydom, confirming that 2,716 doors had been installed, with supplies valued at $2,581,667.58.
The judge rejected Roko’s argument that the verification records could not bind the company because its representatives had not signed the checklist.
He held that Strydom’s emails independently confirmed the findings and that the operations manager had, at the very least, apparent authority to communicate the company’s position.
The court also dismissed the argument that the absence of formal delivery notes invalidated the claim, finding that delivery could be established through the parties’ admissions and conduct.
Justice Mubiru observed that Roko’s witnesses had described the installation process, while the company’s partial payments and subsequent assurances of further payments supported the existence of the contractual relationship.
The judge also rejected Roko’s defence that some doors were defective or failed to meet the required specifications, noting that the allegations had not been included in the company’s formal defence but were introduced through testimony during the trial.
He questioned the evidential value of an unsigned report relied upon by Roko, noting that the witness who presented it had not authored the document and could not confirm whether the alleged defects had been rectified by 2020.
Citing Section 43(1)(c) of the Sale of Goods and Supply of Services Act, Justice Mubiru explained that a buyer may be deemed to have accepted goods if, after a reasonable period, it retains them without notifying the seller of rejection.
The court found that Roko had installed and retained the doors for an extended period, made partial payments and failed to communicate a clear rejection of the goods to Assa Abloy.
It also dismissed the allegation that Assa Abloy had repossessed 1,358 doors, finding no evidence that the installed doors had been removed from the hospital. The judge said the supplier’s earlier warning to withhold unpaid goods did not prove that repossession had occurred.
On the Attorney General’s liability, Justice Mubiru applied the doctrine of privity of contract, under which a person who is not a party to an agreement is generally not liable for its obligations.
He found that the supply agreement was between Assa Abloy and Roko, with the government benefiting from the installation because the doors were fitted at a public hospital.
The judge ruled that Section 64(3) of the Contracts Act, which allows certain third parties to enforce contractual terms intended for their benefit, did not provide a basis for imposing contractual obligations on a non-signatory.
The court also found that the government had not directly engaged Assa Abloy or been given an opportunity to accept or reject the goods in a manner that would establish liability under Section 57 of the Contracts Act.
Consequently, the case against the Attorney General was dismissed with costs.
Although Assa Abloy also sought general damages, the judge declined to award them, reasoning that the supplier’s loss was financial and could be adequately compensated through interest on the outstanding amount.
The court entered judgment against Roko for $1,391,667.58, interest at nine per cent per annum from August 20, 2020, until payment in full, and the costs of the suit.
Assa Abloy was represented by Arcadia Advocates, while Roko was represented by Newmark Advocates.