The Uganda National Roads Authority (UNRA) has appealed against the dismissal of a case in which it was seeking to recover more than Shs21 billion from contractor, Dott Services Limited.
In a media statement, the national roads authority states that the case against Dott Services Limited and Professional Engineering Consultants (PEC) was wrongly decided by the court.
Last week, the Commercial Court dismissed with costs, a case in which UNRA had sought to recover Shs21 billion with interests.
Records show that UNRA paid Shs29.8 billion to Dott Services Limited as compensation for prolongation costs for staged reconstruction of Tororo-Mbale and Mbale-Soroti roads.
High Court Judge Henry Peter Adonyo ruled that there is no sufficient evidence to support UNRA’s accusation that Dott Services Limited was paid for no consideration.
“It appears from the testimonies of UNRA’s witnesses that the payment for prolongation costs did not arise as an act of fraud but rather as an issue whose source was not clear due to lack of documents with the evidence on record pointing an accusing finger to UNRA’s officials and its management including its first consultant Gibb Africa Limited who all bear partial responsibility in approving payment of the disputed monies then turning around that it was fraudulent,” the judge observed.
But UNRA said that the judge reached an erroneous decision on both law and facts which prompted them to file a notice of appeal.
“Whereas the judge states that there was evidence showing that the contractor was responsible for part of the delay owing to poor mobilization and constant equipment breakdown, he arrived at an erroneous conclusion that the contractor is entitled to compensation for all days of delay,” said Stephen Kirenga, UNRA’s publicist.
According to UNRA, there was overwhelming evidence that the build-up of the rates for the BOQs forming part of addenda number 2 involved use of an acceleration factor aimed at having the contractor complete the revised scope of works in a shorter time.
“Whereas the judge states in his judgement that the duration of the addenda including the acceleration measures covered the period of the claim for prolongation, it is bizarre that he concludes that there was no double payment,” Kirenga said.
In 2016, UNRA sued Dott Services Limited jointly with consulting firm, Professional Engineering Consultants (PEC) for recovery of over Shs21 billion with interests claiming that it was wrongly paid to Dott Services as prolongation costs after PEC in breach of its engineering consultancy services to UNRA for road works.
UNRA had argued that Dott Services and Professional Engineering Consultants (PEC) had committed acts of fraud and caused it losses.
But the judge observed that UNRA exhibited the highest level of dishonesty, given the fact that it’s internal systems had approved Dott Services claim, further advise was sought from PPDA and Solicitor General which all advised payment.
Court decision
The court declined to declare that Dott Services and PEC committed fraud against UNRA and also dismissed UNRA’s claim to recover Shs21billion.
“This court declines to issue a declaration that PEC was professionally negligent and in breach of its duty of care and should be ordered in additional to indemnifying UNRA for them wrongly paid to Dott Services, pay damages to UNRA worth Shs1 billion with interest at court rate,” held Justice Adonyo before declining to grant UNRA’s claim for Shs3 billion in general damages against Dott Services and PEC.
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Justice Adonyo held that Dott Services was entitled to compensation for delayed days’ costs under the General Conditions of contract and hence did not amount to double payment.
He said that elements required to establish a claim for money had and received as having not been fulfilled.
According to the court documents, Dott Services Limited undertook road works on Tororo-Mbale and Mbale-Soroti roads and that PEC fraudulently and negligently recommended to UNRA through a false assessment and verification that Dott Services be paid the said amount of money for no justifiable reason at all.
Both Dott Services and PEC denied UNRA’s claim that the money was paid as compensation for delay days for no work at all and put UNRA to task to justify its allegation.
Justice Adonyo reasoned that UNRA failed to prove that the methodology used in calculating the compensation events days claimed by Dott Services were not supplied by it.
“This was a clear acceptance of responsibility by UNRA through its agent that it failed to provide the strip maps to Dott Services in accordance with the SCC and therefore, proving that this was a compensation event of 253 days which should be calculated from November 21 2010 as was provided under Clause 44 of the General conditions of the contract given that indeed there was a breach of a contract by UNRA and therefore Dott Services was properly entitled to the delay compensation days of the 253 days,” the judge held.
The court observed that the delays suffered by Dott Services were separate events arising from breach of contract for the staged reconstruction of the two roads with the delays referred to by UNRA shown by the site meetings arising from poor performance or implementation of the works for which UNRA only always cautioned Dott Services but took no further action.
The judge also reasoned that by failing to implement the terms of the contract signed with Dott Services, UNRA breached the provisions which result of that breaches became compensation events that were claimable as compensation and they were properly assessed and recommended by PEC for payment and not fraudulent as claimed by UNRA.
“In this case, UNRA failed to fulfil several of its obligations as stipulated under the admeasurement contracts for the staged reconstructions of Lot D and E with all the events individually amounting to a breach of contract for which Dott Services was entitled to compensation as delayed days which in combination totalled to the number of the days claimed and paid,” he said.
On UNRA’s argument that those days should not have been determined as actual compensatory days given that Dott Services had wrongly calculated those days, the judge reasoned that UNRA failed to demonstrate that the contract it had signed with Dott Services excluded public holidays and weekends.
Background
On October 22, 2010, UNRA signed a contract with Dott Services for the staged reconstruction of 49Km Tororo-Mbale road, to be completed in 18 months at Shs30.2bn and for 103Km Mbale-Soroti to be completed in 18 months but at fixed cost of over Shs46bn.
Following a design review, UNRA changed the scope of works which resulted in the varying of the original contract through an addendum dated October 2013 which resulted in the increasing of the original contract price and period for the construction of the two roads with Mbale-Soroti costs increasing over Shs108.1bn to be executed in 40.5 months while Tororo-Mbale cost increased to Shs63.8 to be executed in 38 months.
