The High Court has ordered Paramount Hospital Kampala Ltd to pay Shs48 million to Medequip Uganda Ltd for breach of a contract for the supply of medical equipment.
Medequip Uganda Ltd told court that it entered into an agreement with Paramount Hospital Kampala Ltd on November 2, 2019, for the supply of medical equipment at a cost of Shs75 million.
Medequip Uganda Ltd delivered the equipment to Paramount Hospital Kampala Ltd in accordance with the terms of the agreement. The defendant was required to pay an initial sum of Shs30 million within two weeks of delivery through postdated cheques, while the balance was to be paid within six months thereafter.
Medequip Uganda Ltd further averred that, contrary to the agreement, Paramount Hospital Kampala Ltd made an initial payment of Shs25 million on November 2, 2019, and thereafter made four instalment payments totalling Shs7.9 million.
Since June 2020, the defendant made no further payments, leaving an outstanding balance of Shs51.2 million, inclusive of interest at two per cent per month from the due date until the filing of the suit.
As a result of the breach, the plaintiff said it suffered financial loss and inconvenience, for which it held the defendant liable.
The plaintiff said several demand notices were served on the defendant, but no response was received.
Although the defendant was served with summons to file a defence together with the plaint, it did not file a written statement of defence.
Based on the return of service filed in court on August 23, 2021, and after being satisfied that service upon the defendant had been effective, court entered an interlocutory judgment against the defendant on July 6, 2023.
Acting Justice Peter Kinobe observed that it was undisputed that the plaintiff company had been deprived of its money, which greatly inconvenienced it because the funds could have been used in the course of its business.
“The actions of the defendant company go to the root of the contract and, in the circumstances, they amount to a fundamental breach,” Justice Kinobe ruled.
The court ordered Paramount Hospital Kampala Ltd to pay Medequip Uganda Ltd special damages of Shs42 million and general damages of Shs6 million.
The court also ordered the defendant to meet the costs of the suit.
