The Court of Appeal has overturned a High court decision that dismissed Edroch Plastics Co. Limited's suit against former electricity distributor, Umeme. The case dates back to July 2012, when Umeme disconnected the factory and neighbouring premises following reports of electricity theft in the area. Edroch Plastics had applied for an electricity connection in 2007 and was subsequently connected. However, the company remained without the three-phase electricity supply needed to operate its machinery until August 2013.
Edroch Plastics sued Umeme for breach of contract and negligence, arguing that the distributor unlawfully disconnected its electricity supply and failed to restore the three-phase power required to operate its machinery despite repeated requests. The company's managing director, Noah Muwonge, told court that the factory had not been implicated in the theft but remained without electricity. Umeme only reconnected the factory in August 2013 after learning that the company had instituted legal proceedings against it.
In 2018, High court judge Billy Kainamura dismissed the suit, ruling that Umeme had lawfully disconnected the factory. Edroch Plastics subsequently appealed the decision. The Court of Appeal, comprising a panel of three justices, found that the High court had erred in holding that Umeme was justified in disconnecting the factory. Justice Esta Nambayo, in her lead judgment, found that Umeme had acted negligently by failing to restore electricity to the factory despite repeated requests.
Justice Nambayo noted that Edroch Plastics had neither been identified as being responsible for the electricity theft nor charged with any related offence. The evidence before the court did not establish the company's involvement in the illegal activity. She held that reports of electricity theft in an area could not justify disconnecting every consumer supplied through the affected power line. The judge faulted the High court for finding that Umeme had acted lawfully.
The judge also criticised Umeme for failing to provide an adequate explanation for the prolonged interruption of electricity supply, which disrupted the factory's operations. She observed that the distributor's failure to resolve the problem within a reasonable time, despite being notified, amounted to negligence and a breach of its contractual obligations. According to the judge, the prolonged disconnection prevented Edroch Plastics from operating its machinery, resulting in substantial business disruption and inconvenience.
Edroch Plastics had sought Shs 276 million in damages for losses incurred during the period it remained without electricity. However, the Court of Appeal declined to award the full amount, finding that the claimed lost profits, damaged work in progress, and other financial losses had not been sufficiently proved. Instead, justice Nambayo awarded Shs 100 million in general damages, taking into account the duration of the interruption, the commercial purpose of the electricity supply, and the company's repeated efforts to secure reconnection.
The award was intended to compensate Edroch Plastics for the substantial business disruption and inconvenience established by the evidence, rather than financial losses that had not been proved. Justices Cheborion Barishaki and Musa Ssekaana concurred with the judgment. Umeme's electricity distribution concession is set to expire in 2025, with the Uganda Electricity Distribution Company Limited (UEDCL) taking over electricity distribution.
Key points
- The Court of Appeal awarded Edroch Plastics Co. Limited Shs 100 million in damages for Umeme's unlawful disconnection and delayed restoration of power to its factory in 2012.
- The court found that Umeme had acted negligently by failing to restore electricity to the factory despite repeated requests.
- Edroch Plastics had sought Shs 276 million in damages but was awarded Shs 100 million in general damages.
