Businessman Julius Mwale has been directed to deposit Sh17 million in court pending the determination of an appeal he intends to lodge against a contractor for alleged supply of murram in 2019.
The High Court directed the US-based tycoon to deposit the amount within 30 days from the date of the ruling, as a condition for stopping Sifatronix Limited from recovering Sh17.1 million from him.
Sifatronix won the case against the businessman in February after suing him and his company Tumaz and Tumaz Ltd for the supply of murram that was used for the construction of a six kilometre road at Mwale Medical and Technology City in 2019.
The businessman went back to the High Court and obtained an order stopping Sifatronix from executing the judgment, pending the hearing of his appeal. He said was dissatisfied with the February 27, judgment.
“I am satisfied that the matter warrants urgent attention. Accordingly, the application is certified as urgent,” said the court.
The court ruled that the decision is suspended on condition that he deposits the amount in court within 30 days and in default, Sifatronix will be free to recover the amount.
Mr Mwale told the court that allowing the contractor to recover the money before the hearing of the appeal will render the case an academic exercise.
“The balance of convenience tilts in favour of preserving the status quo, as no prejudice shall be suffered by the Respondent (Sifatronix Ltd) which cannot be adequately compensated by interest, whereas the Applicant stands to suffer irreparable prejudice if stay is denied,” Mr Mwale said in the application.
The businessman said the contractor’s financial ability to refund the decretal sum, interest and costs in the event that the intended appeal succeeds is unknown, and there exists a real risk that recovering the money may be impossible.
Sifatroix sued Tumaz and Tumaz in July 2019 demanding payment of Sh30.6 million for the supply of murram.
The contractor said it supplied the goods as required but the Tumaz and Tumaz declined to pay.
Mr Mwale opposed the case and filed a counterclaim, and argued that the alleged contract for the supply of murram was signed between Tumaz and Tumaz and Epic Agency Limited, and who were duly paid.
He further claimed that Sifatronix approached Tumaz and Tumaz requesting security for a Local Purchase Order (LPO) it had been awarded for tarmacking the road.
It was under this arrangement that Tumaz and Tumaz issued post-dated cheques to Sifatronix, with the understanding that the cheques would only be presented for payment upon confirmation of work completed.
The businessman said Sifatronix requested Tumaz and Tumaz to provide financing under the LPO agreement, pursuant to which Tumaz and Tumaz made various payments totaling Sh2.59 million.
However, Sifatronix breached the agreement by failing to commence the road tarmacking works.
As a result, he said he and his firm were justified in not honouring the post-dated cheques. He further contended that the suit does not disclose any cause of action against them.
In the counterclaim, Tumaz and Tumaz sought a reimbursement of the Sh2.59 million, which he claimed was paid as a deposit for the road tarmacking works, or alternatively, an order of specific performance compelling Sifatronix to complete the tarmacking of the six-kilometre road.
But the court ruled that the evidence produced by Sifatronix showed that it was uncontroverted that Tumaz and Tumaz issued it with various LPOs for the supply of murram.
The court said the murram was delivered and received by Tumaz and Tumaz as evidenced by the delivery notes and thereafter Sifatronix issued Tumaz and Tumaz with various invoices.
The court said the documents constitute sufficient evidence of a contractual relationship between Sifatronix and Tumaz and Tumaz.
The court, however, reviewed the amount downwards and directed Tumaz and Tumaz to pay Sh17.1 million to Sifatronix.
