The High Court in Mbale has ordered Bugwere High School to pay more than Shs130 million to Namu & Company Ltd after finding that the school received large quantities of maize flour but failed to pay for them for over two years.
In his judgment, Justice Dr. Farouq Lubega stated that the case was a clear example of how suppliers, especially small and medium-sized businesses, are often left struggling after delivering goods to schools and other institutions on credit.
According to court records, Namu & Company Ltd entered into an arrangement with Bugwere High School in early 2023 to supply maize flour for students’ meals.
The company’s managing director, Annet Namugolya, told the court that the agreement was simple. The school needed food. Her company would supply maize flour every academic term, and payment would follow.
Between February 15 and 22 June 22, 2023, the company supplied the school with 42,669 kilograms of maize flour. Each kilogram was priced at Shs3,300.
The delivery was not disputed. Each consignment was received by the school’s storekeeper and signed for using official goods received notes.
The problem arose with payment.
Despite repeated reminders and demands, Bugwere High School only paid Shs30 million. The balance of more than Shs110 million remained unpaid.
Namugolya told court that her business was pushed into financial distress.
In court, Bugwere High School, through one of its board members, Rashid Masuba, denied owing the supplier any money.
Masuba told court that the school’s board was presented with an invoice of Shs 30 million in May 2023. He said the board approved the payment and cleared it in two instalments.
He insisted that once the Shs 30 million was paid, the school had fully settled its obligation. However, under cross examination, Masuba admitted that he did not know how much maize flour had actually been supplied because he was not personally engaged in the day to day running of the school.
The lawyers for Namu & Company argued that the case was straightforward.
They presented nine delivery notes showing dates, quantities and signatures of the school’s storekeeper confirming receipt of the maize flour.
They told court that even though the agreement was not written, Ugandan law recognises oral contracts, especially where goods are delivered and accepted.
The supplier’s lawyers also argued that waiting more than two years for payment was unreasonable and amounted to breach of contract.
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After hearing all the arguments, Justice Lubega agreed with the supplier.
He carefully analysed each delivery note and confirmed that maize flour worth Shs 140 million was delivered to Bugwere High School.
After subtracting the Shs 30 million already paid, the court found that the school still owed Shs 110 million.
“It is therefore my finding that the defendant (Bugwere High School) is indebted to the plaintiff,” the judge ruled
On the issue of breach of contract, the court said that even where payment timelines are not stated, the law requires parties to act within a reasonable time.
“The period of two years is beyond any stretch of reasonableness in the normal conduct of business,” Justice Lubega said.
The court awarded Namu & Company Shs 20 million in general damages, noting that the supplier had been deprived of the use of its money. Bugwere High School was also ordered to pay Shs 110 million as the outstanding balance.
The ruling highlights a common problem in Uganda, where suppliers often deliver food, construction materials and other essentials to schools and other public institutions on credit, only to face long delays or outright refusal to pay. In fact many suppliers have gone out business due to this practice.
