Kampala, Uganda – August 4, 2025 | The Commercial Division of the High Court in Kampala has ruled in favor of Jomo Services Ltd, a Ugandan subcontractor, ordering Serbian construction firm Energo Projekt Niskogradnja to pay Shs 1.2 billion in unpaid contractual fees. The ruling stems from a dispute regarding work performed under a Uganda National Roads Authority (UNRA) water relocation project.
Court’s Judgment Against Energo Projekt
Justice Susan Odongo found Energo Projekt‘s defense evasive, with general denials and no reasonable explanation to counter the claim filed by Jomo Services Ltd. The court granted Jomo Services an award of Shs 1.2 billion for the work completed on the UNRA project, along with Shs 368 million in general damages and interest.
In the judgment, the court emphasized that Energo Projekt‘s response lacked substance, particularly regarding the claims of false credit reporting and overdue payments. Justice Odongo cited that no clause existed in the subcontract linking payment to receipts from UNRA, as argued by Energo Projekt in its defense.
The Dispute Over Unpaid Fees
The dispute centers around a subcontract valued at Shs 2.74 billion, which was awarded to Jomo Services Ltd for relocating water utilities along a UNRA road project. The agreed payment was to be made within 30 days of engineer approval of interim payment certificates.
While Energo Projekt made partial payments, an outstanding balance of Shs 1.24 billion remained, prompting Jomo Services to file a claim. The subcontractor argued that despite Energo Projekt receiving payments from UNRA, they failed to honor their financial obligations.
Key Issues and Evidence Presented
Jomo Services presented a letter from Energo Projekt acknowledging the debt and promising repayment by the end of the first quarter of the 2024/25 financial year. However, the firm failed to fulfill this promise.
In its defense, Energo Projekt claimed that delays in payments from UNRA were responsible for hindering its ability to pay Jomo Services. Yet, the court found no provision in the subcontract linking payment to receipts from the employer.
Court Rejects Energo Projekt’s Objections
Energo Projekt also raised a preliminary objection, claiming that the main suit had abated due to Jomo Services‘ failure to file summons for directions. However, the court rejected this argument, stating that the case had been referred to mediation before the 28-day deadline expired, thus falling within the exceptions under the Civil Procedure Rules.
Ruling and Implications
The ruling signifies a significant moment in Uganda’s construction and contract enforcement landscape. It highlights the importance of clarity in contract terms and reinforces the need for timely settlements. The court’s judgment further ensures that businesses in Uganda are protected from breaches of agreements, especially when these breaches disrupt their operations.
In addition to the Shs 1.2 billion principal sum, Jomo Services Ltd was awarded general damages, interest at 8% per annum, and the costs of the application and the main suit.
The judgment is likely to serve as a precedent in Uganda’s commercial sector, emphasizing the judiciary’s role in enforcing business contracts and protecting local companies from exploitation in the face of international contractors.https://www.youtube.com/watch?v=D5tEks40WdI