Chinese tycoon drags Bwebajja hotel to court over Shs23 billion

A Chinese businessman has slapped a caveat halting sale of J&M Airport Road Hotel in Bwebajja, claiming the owners owe him $9.5 (Shs22.7b) allegedly for materials he supplied for erecting the facility.

Mr Rahul Modi, proprietor of Hong Kong-based Five Line Trading Company, says he supplied building materials worth $11,984,928 (Shs28.6b), according to court documents.

He was, however, alarmed when Barclays Bank that is seeking to recover its Shs4.7 billion loan, and which has been a receiver for the hotel, advertised the vast leisure and hospitality facility for sale.

Mr Modi, in documents before court, accuses the financial institution and Ms Goodra, widow to the hotel’s late proprietor Joseph Behakanira, of colluding to sell off the property before sorting his arrears, contrary to a previous oral agreement.

Hearing of the case begins at the Commercial Court in Kampala tomorrow.
Details of the case show that the materials supplied included glass blocks, polly carbonate sheets, furniture, tiles, laundry machines, swimming pool items and locks, decoration, lighting as well as rail fittings.

The plaintiff says various contracts he signed with late Behakanira between September and December 2006, obliged the latter to make 30 per cent down payment and clear the balance before shipment.

The first batch of the supplies, worth $4.6 million (Shs10.9b), was shipped that year in 102 containers and Mr Modi said his client only paid $3.25 million (Shs7.7b) at the time.
That notwithstanding, the plaintiff avers that he proceeded to ship in more of the materials but the defendant breached the contract.

Several reminders for payments have gone unheeded, the plaintiff argues, giving cause to the present litigation process. He is seeking full payment, special and general damages in excess of $9 million (Shs21.5b) over the property, situated on a 96-acre land, about 15 kilometres on the Kampala-Entebbe Road.

Widow commits to payment
Through his attorney, Niwagaba & Mwebesa Company Advocates, Mr Modi jointly sues Ms Goodra, the hotel and Barclays Bank, demanding they pay him $8.7m (shs20.7b) and $752,098 (Shs1.7b) for the goods and haulage charges, respectively.
He says the late Behakanira approached him in 2006 to ship the assorted items to enable him complete his hotel in time for November 2007 Commonwealth Heads of Government Meeting in Kampala.

Behakanira, the principal signatory to the contract, died suddenly on Valentine’s Day last year shortly after members of a parliamentary watchdog committee grilled him on the $1.3 million (Shs3.1b) government cash he separately obtained to prepare 200 rooms for Chogm guests at J&M Hotel, just three days to the summit.

Ms Goodra told this newspaper in an interview in November last year that she has not refused to pay Five Line Trading Company, except she is overwhelmed by various similar demands which require careful scrutiny and verification.

“After the death of my husband, moreover abruptly, people have been coming up and saying he owed them this or that,” she said. “It’s either the elders or courts that [will] verify the claims.”

She added: “Our Company has a clean record and whoever is demanding is being paid slowly and with respect. Now that he [Modi] has gone to court, the court will decide.”