The High Court in Kampala has ordered the Bank of Uganda (BOU) to compensate C&S Upholstery Limited with Shs 200 million for lost earnings due to a breach of statutory duty.
Justice Musa Ssekaana ruled that BOU unfairly disqualified C&S’s bid to supply carpets for six floors of its headquarters and later sought the company’s suspension from the Public Procurement and Disposal Authority (PPDA) over unproven forgery allegations.
Case Background
In May 2019, BOU invited bids to replace carpets on floors 1, 3, 4, 6, 8, and 9 of its new building. C&S submitted its bid on June 14, 2019, including a manufacturer’s authorization from Windsor International Limited.
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BOU later sought verification of C&S’s association with Windsor International and Shaw Contract Group. Shaw Contract Group confirmed C&S as an authorized supplier, with Windsor International serving as an intermediary.
Despite this, BOU’s procurement team claimed the manufacturer’s authorization was forged and recommended investigations, leading to C&S’s disqualification. The bank also lodged a complaint with PPDA in May 2019.
Following a hearing, PPDA dismissed BOU’s allegations, affirming that Windsor International had indeed authorized C&S and finding no ethical breaches.
C&S sued BOU, arguing that the bank’s actions tarnished its reputation, caused financial distress, and led to losses of Shs 5.2 billion from missed business opportunities and Shs 2 billion from rejected bids. The company presented evidence of a 25-year business relationship with the Central Bank.
In its defense, BOU contended that C&S had not exhausted administrative review remedies under the PPDA Act. The bank also maintained that the company was never officially suspended and still held a valid PPDA registration certificate, KCCA trading license, and certificate of incorporation. Furthermore, BOU argued that C&S’s bid was rejected due to non-compliance with technical requirements and higher costs.
However, Justice Ssekaana found that BOU had failed to conduct proper due diligence and had acted unjustly in disqualifying C&S based on unverified claims.
The court awarded C&S Shs 200 million in damages, plus a 15% annual interest from the date of judgment until full payment, along with the costs of the lawsuit.
