Hardware dealer sues client over refusal to pay Shs70m

Thursday January 23 2020
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East African Roofings System Limited, a dealer in assorted hardware products has sued one of its client over defaulting on payment of deliveries worth Shs70m.
The sued, Aavom Enterprises Limited, is accused alongside Mr Steven Tee Owen and two guarantors, Mr Peter Obuku and Ms Molly Adiru, of refusal to pay for goods supplied.
Documents before the Commercial Division of the High Court show that in 2018 while acting on behalf of Aavom Enterprises, Mr Owen approached East African Roofings for the supply of hardware products on a credit management basis, which request was endorsed and goods were delivered.

The hardware supplied goods worth more than Shs159m on September 8, 2018 with Aavom Enterprises undertaking to pay for the supplied within a month.
However, whereas Aavom made some payment an outstanding balance of Shs70m was never paid after a posted dated cheque that was signed by Mr Owen bounced upon presentation on the maturity date.
East African Roofings commenced criminal charges against Mr Owen who together with Aavom Enterprises entered into an understanding that was guaranteed by Mr Obuku and Ms Adiru.

According to court documents, Mr Owen committed to pay the amount due within six months in seven instalments of Shs10m.
However, to date Mr Owen has failed to honour his commitment and the guarantors have also failed to pay the suit amounted as agreed.