Architectural firm fined Shs446m over Kabira Country Club expansion project

The Commercial Court has ordered an architectural firm to refund more than USD132,000 (about Shs446 million) to Meera Investment Ltd after finding that it breached a consultancy agreement relating to the expansion of Kabira Country Club.

In a ruling delivered on April 3, Acting Judge Susan Odongo held that FBW (U) Limited, alongside architects Nigel J. Tilling and Paul Moores, fundamentally breached their contractual and professional obligations to Meera Investment Ltd.

The dispute stemmed from a resuscitated 2012 consultancy agreement under which the architectural firm had been contracted to prepare a complete construction drawings package for the planned expansion of Kabira Country Club in Bukoto, Kampala.

Justice Odongo faulted the defendants for failing to deliver the required Computer-Aided Design (CAD) files in an editable format necessary for construction works to commence.

“In conclusion, the 1st Defendant’s breach is fourfold: failure to meet the 20 December 2018 deadline for the construction drawings; failure to provide deliverables in a usable, editable format consistent with past dealings and industry needs; unilateral variation of payment milestones by demanding ‘in-between’ payments before construction; and withholding essential data as a tool for financial leverage,” the judge ruled.

The court declared that FBW (U) Limited had fundamentally breached the revived consultancy agreement and that Mr Tilling and Mr Moores breached their professional duty of care and personal undertakings to Meera, a real estate and property development company owned by Ruparelia Group.

Justice Odongo ordered the defendants to refund USD132,750 to Meera Investment Ltd, as money had been received.

The court also awarded Meera Investment special damages of USD108,500 incurred in hiring replacement consultants, as well as general damages of USD500,000 for lost business opportunities arising from delays to the project.

However, the court declined to award exemplary damages sought by Meera.

Background to the dispute

The court heard that in October 2018, the parties resumed implementation of the consultancy agreement and revised timelines to reflect changes in the apartment mix and layout of the proposed development.

The architectural firm reportedly undertook to submit planning drawings to Kampala Capital City Authority (KCCA) by October 29, 2018, and to deliver the complete construction package by December 2018, ahead of an anticipated site commencement in January 2019.

But a dispute later emerged after the firm allegedly delivered only KCCA-approved PDF drawings while withholding editable CAD files required by contractors and surveyors.

Meera Investment told the court that the defendants demanded payment of the fourth and fifth instalments before construction had commenced, contrary to the agreed payment structure.

The company said it paid USD132,750 under protest to avoid further delays but was later forced to engage alternative consultants after attempts to convert the PDF files proved impracticable, causing an estimated eight-month delay to the project.

According to court records, Meera Investment argued that the PDF drawings were unsuitable for detailed dimensional work because they could not be properly adjusted or manipulated by engineers and contractors.

In their defence, the defendants maintained that they had fulfilled their contractual obligations by delivering KCCA-approved drawings together with original CAD files.

Mr Moores further argued that FBW (Uganda) Limited, which was named in the suit, had ceased operations in Uganda in 2010 and was formally dissolved in the United Kingdom in June 2019.

He contended that the actual consultancy services had instead been rendered by a separate Ugandan-incorporated entity known as FBW Uganda Limited.

The defendants also argued that Mr Moores and Mr Tilling could not be personally sued because they had not individually signed any agreement with Meera Investment Ltd and were therefore protected by the doctrine of corporate personality.

They further contended that a non-existent entity could neither sue nor be sued.

However, Justice Odongo rejected the argument, noting that the defendants had used the corporate names interchangeably.

“Search results from the Uganda Registration Services Bureau (URSB) in 2020 confirmed the 1st Defendant remained on the Ugandan register,” the judge ruled.

She further observed that invoices had been issued in the name of “FBW (U) Ltd” while payments were received through accounts belonging to “FBW Uganda Ltd”, reinforcing the plaintiff’s position that the entities were treated interchangeably.

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