A Ugandan importer has sued a Mombasa-based bulk grain handling company, Bulkstream Ltd, demanding unconditional release of its cargo comprising 1,514 tonnes of wheat imported from Ukraine.
Pan Afric Commodities Ltd 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 to a Bill of Lading, which was issued on September 21, 2018.
The company and its two directors, Mohammed Hamid and Abdelateef Mohamed, say the wheat, which was shipped in bulk form, was handled by Bulkstream Ltd (formerly Grain Bulk Handlers Ltd).
Bulkstream Ltd, the only bulk grain handling facility in the country, is associated with Mombasa-based businessman Mohamed Jaffer.
In their application at the High Court in Mombasa, applicants say out of the total amount purchased, some of the cargo remained in storage until Pan Afric Commodities Ltd paid the requisite import taxes and customs duties to the Uganda Revenue Authority (URA). The case was filed on September 24, and no responses have been submitted so far. It is scheduled for mention on November 10.
“Upon clearance of customs duties with URA, Bulkstream Ltd 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.
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 Ltd informed them that they could not release the goods as they had received instructions from a receiver manager declaring that Pan Afric Commodities Ltd 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.
Pan Afric Commodities Ltd is also seeking an order that it is not liable to pay storage fees for the period after January 28, 2021, when Bulkstream Ltd communicated to them that the goods cannot be released because they are under the jurisdiction of a Receiver Manager.
“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,” 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 Ltd) 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 Ltd 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 (company), 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 the form of accumulating storage charges, declining quality of the wheat, and loss of profit since they cannot sell the wheat due to the illegal detention of the cargo by Bulkstream Ltd.
In his supporting affidavit, Mr Hamid states that they (directors) have on several occasions informed Bulkstream Ltd that the receivership in Uganda against Pan Afric Commodities Ltd had no bearing on its assets out of the jurisdiction.
He further states that instead of heeding their call to release the goods, the respondent sent the applicants' outstanding fees as storage fees.
“The applicant is the legal owner of the cargo as expressly indicated in the Bill for Lading, which is a document of title; therefore, there being no lawful justification prohibiting the respondent from releasing the cargo, it ought to be unconditionally released to the applicant,” states Mr Hamid.
