In a significant legal development, the Court of Appeal has affirmed the High Court’s ruling, directing the Uganda National Roads Authority (UNRA) to compensate Parambot Distillers and Breweries with a staggering sum of Shs31.5 billion.
This landmark decision stems from the damages incurred by the twin factories Parambot Distillers Limited and Parambot Breweries Limited during the construction of the Gayaza-Zirobwe Road project between 2009-2012.
The Court of Appeal’s decision to uphold Justice Bashaija K. Andrew’s verdict of the High Court sends a powerful message about the importance of safeguarding the rights and interests of private enterprises affected by large-scale infrastructure development.
The case began when Parambot Distillers Limited and Parambot Breweries Limited, a key player in Uganda’s spirits and beverages industry, filed a lawsuit against UNRA, alleging extensive damages to its property and operations caused by the construction of the Gayaza-Zirobwe Road. The damages were reported to include disruptions in production, and transportation, and severe structural harm to the distillery’s facilities.
By consent of both parties, the Chief Mechanical Engineer of the Ministry of Works was engaged to reconcile the two conflicting valuation reports on the extent of damage occasioned to the respondent’s machinery however the promises were not respected which called for legal battles.
At the trial court in 2019, while resolving the issue of who was liable for the damages caused to the respondent’s machinery, it was held that the s appellant, together with the Attorney General, were jointly and severally liable for the damages, part of which had been recovered in the report of the Chief Mechanical Engineer of the Ministry of Works.
A judgment on admission was entered as against UNRA and the Attorney General and the issue pertaining to damage of the respondent’s machinery was accordingly disposed of. The court ordered that the respondents would proceed to prove their claim in respect of the outstanding issues of compensation for damage to the wall fence, housing structures and land. The Judge also ordered UNRA and the Attorney General to pay She 31,484,904,247 as contained in the Chief Mechanical Engineer’s report.
Nonetheless, UNRA expressed its dissatisfaction with the ruling and subsequently lodged an appeal in the Court of Appeal. During the recent ruling on Wednesday, a distinguished panel of three Justices from the Court of Appeal, including Muzamiru Kibeedi, Christopher Gashirabake, and Oscar John Kihika, arrived at a unanimous decision, compelling UNRA and the Attorney General to provide compensation to the respondent.
In his ruling, Justice Gashirabake, who presided as the lead Judge, emphasized that the trial Judge’s decision to enter a judgment based on the amount specified in the Chief Mechanical Engineer’s report was entirely correct.
“I concur with the learned trial judge’s decision to correctly enter a judgment based on admission, amounting to UGX 31,484,904,247, as stated in the Chief Mechanical Engineer’s report. Consequently, I uphold the trial judge’s ruling and dismiss this appeal, issuing the following orders: The appellant, in conjunction with the Attorney General, is directed to pay the respondents the sum of UGX 31,484,904,247, as specified in the Chief Mechanical Engineer’s Report. The respondents are entitled to the costs of this appeal and the suit in the trial court,” as determined by the court.
The Court of Appeal’s verdict underscores the accountability and liability of government entities in ensuring that their projects do not result in significant adverse consequences for local businesses.
The sizable compensation awarded to Parambot Distillers and Breweries not only serves as an acknowledgement of the damages incurred but also emphasizes the need for meticulous planning, adherence to regulations, and proactive measures to mitigate the collateral effects of major infrastructure initiatives on private enterprises.
This case stands as a precedent for fostering a more balanced and equitable approach to development projects in Uganda, underlining the importance of protecting the interests of businesses affected by large-scale public works.
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