National Water and Sewerage Corporation (NWSC) has been ordered to pay Shs39.7 million in interest to a supplier, G-Tech Limited, which the corporation only paid after the supplier took it to court.
The story goes back to November 2017 when G-Tech supplied NWSC with civil engineering, surveying and water-handling equipment and spares worth Shs 1.3 billion. The supplies continued until October 2022.
G-Tech said payment was required within 60 calendar days upon receipt of the invoice, and NWSC agreed that the payments would be made within the period.
After 60 days, the money did not come, and G-Tech wrote to NWSC on July 18, 2022, and again on September 20, 2022. Both letters bore the corporation’s receiving stamp. It sent two more demands on 19 and 31 January 2023, the last two warning of legal action.
None of these reminders were answered and on April 13, 2023, G-Tech filed it case seeking Shs 1.3 billion, interest of 25% a year and costs.
At this point, NWSC did pay, but as soon as the hearing began, it started making payments. NWSC paid Shs 10.4 million on April 28, 2023, and Shs 2. 6 million on May 8, 2023.
On July 25, 2023, it paid Shs 988 million, and on January 21, 2024, it made another payment of Shs 151.8 million.
The parties went to mediation, and on June 1, 2026, they signed a partial consent judgment in which NWSC accepted that it had paid Shs 1.32 billion for the supplies.
However, G-Tech kept its case alive over its other claims, including the 25% interest rate and the costs.
G-Tech’s lawyers from AB & David Advocates argued that NWSC’s payments were an admission that the money was due. They said paying the principal does not wipe out the duty to pay interest for the time the company was kept out of its money.
They asked for 25% a year, saying it matches the practice of the court and makes up for inflation and the falling value of the shilling. On costs, they said the loser pays, because the suit was only needed after NWSC failed to pay.
NWSC’s lawyers from MMAKS Advocates pushed back on every point. They said no contract, purchase order or invoice showed an agreed payment date or a 25% rate. Interest, they said, is not assumed.
They argued the suit was filed too early because the sums had not yet fallen due, and that the plaint never said when default happened. They also said the consent judgment recorded payment ‘in full and final settlement’.
As a fallback, they offered Shs 10 million, against G-Tech’s claim of Shs 137 million.
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Justice Anna Mugenyi, who heard the case, said the consent ageeement signed by the two parties “expressly preserves,” G-Tech’s remaining claims, and the claims for interest and costs “were not compromised or abandoned”.
She was just as firm on the claim by NWSC that the suit was filed early.
“A debtor who pays almost the entire sum demanded only after it has been sued, without offering any explanation of a later due date, can hardly be heard to say that the debt had not fallen due when the suit was filed,” she said.
However, G-Tech lost the ground on the interest rate. Justice Mugenyi found no proof of any agreement for 25%.
She added that G-Tech brought no evidence of what it pays to borrow money. The 25% rate, she said, “is at the upper end of commercial rates and has not been justified by evidence”.
She settled on simple interest of 10% a year, which she said was reasonable.
On costs, G-Tech won outright.
“A defendant who pays only after being sued has, by its own conduct, made the suit necessary,” Justice Mugenyi said.
She described the Shs 19.2 million gap between the sum claimed and the sum settled, about 1.4%, as ‘modest’.
