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Firm fights to hold Uganda client’s wheat over Sh142m
Pan Afric Commodities says it purchased approximately 2,837 tonnes of wheat which was shipped to the port of Mombasa under a charter party agreement and was subject of Bill of Lading which was issued on September 21 2018.
Grain handling company Bulkstream has opposed an application by a Ugandan importer who has sued it seeking release of its 1,514 tonnes of Ukrainian wheat unconditionally.
Bulkstream says that it entered into a bailment agreement with Pan Afric Commodities to which, as a bailee, it retains a legal lien of the wheat over accrued and unpaid handling and storage charges, which at September 30 stood at $1.1 million.
Legal lien is right to hold someone else’s property until the debt owed is paid.
Bulkstream, the only bulk grain handling facility in the country, is associated with Mombasa-based businessman Mohamed Jaffer.
In an affidavit filed in court, Bulkstream says that once a case with regard to the cargo was terminated at the Court of Appeal, it was its expectation the importer would approach them to settle the accrued storage charges.
“The bailment agreement that stipulates payment of handling, storage and related charges has never been revoked,” the affidavit reads. As such, Bulkstream says it still retains the right of lien over the goods until full payment.
Pan Afric Commodities says that Bulkstream’s assertion that the dispute is founded on the accrued amount and contract of bailment is contrary to their (Bulkstream) representation to them that they cannot release the cargo due to receivership proceedings in Uganda.
Through an affidavit of Abdelateef Mohamed, Pan Afric Commodities says Bulkstream is attempting to bring irrelevant and inconsequential facts to illegally detain its cargo.
Pan Afric Commodities says it purchased approximately 2,837 tonnes of wheat which was shipped to the port of Mombasa under a charter party agreement and was subject of Bill of Lading which was issued on September 21 2018.
The court directed the case to be mentioned on February 4, 2026.
The company and its two directors Mohammed Hamid and Abdelateef Mohamed say that the wheat which was shipped in bulk form was handled by Bulkstream (formerly Grain Bulk Handlers Ltd) pursuant to instructions issued to it.
In their application at the High Court in Mombasa, the applicants say that out of the total amount purchased, some of the cargo remained in storage until Pan Afric Commodities paid the requisite import taxes and customs duties to the Uganda Revenue Authority (URA).
“Upon clearance of customs duties with URA, Bulkstream generated discharge invoices and advised the applicants on the outstanding storage charge that would need to be cleared prior to the release of the cargo which at May 2020 stood at US Dollars 286,379.38 (Sh36.9 million),” the application states in part.
According to the applicants, they developed a comprehensive payment plan to settle the outstanding charges.
They also claim that as they were making arrangements to make the payment, Bulkstream informed them that they could not release the goods as they had received instructions from a Receiver Manager declaring that Pan Afric Commodities was under receivership.
The applicants say that they were also informed that the cargo was purportedly under the control of the Receiver Manager and should only be released to him.
“The Receiver Manager has not complied with express provisions of the law touching on cross-border insolvency proceedings as stipulated in the Insolvency Act and therefore the cargo is not subject to his jurisdiction,” part of the case documents state.
The applicants argue that Mr Hamid and Mohamed being directors of the company have exchanged several correspondences with the respondent (Bulkstream) advising them that they are illegally holding the cargo since it is not under the jurisdiction of the Receiver Manager thus it should be released to Pan Afric Commodities under the provisions of the Bill of Lading.
“In addition the Receiver Manager has attempted to have the cargo released to him using falsified customs documents which have been detected by the respondent yet they have still declined to release the cargo to the first applicant who is the legal owner and lawfully entitled to it under the Bill of Lading,” case documents state in part.
The applicants claim that they continue to incur heavy and substantial losses in form of accumulating storage charges, declining quality of the wheat and loss of profit since it cannot sell the wheat due to the illegal detention of the cargo by Bulkstream.
Pan Afric Commodities is also seeking for an order that it is not liable to pay storage fees for the period after January 28 2021 when Bulkstream communicated to them that the goods cannot be released because they are under the jurisdiction of a Receiver Manager.
