Foreign firm sues URA over goods worth Shs1b
What you need to know:
- The suit indicates that Orbit Kenya instituted an independent investigation and found that Orbit Uganda had previously not operated at the physical address it claimed to be located at, and that the company had never been licensed to carry out any business since its registration by the Kampala City Council Authority.
A United Arab Emirates-based foreign chemical distributing company has sued the commissioner general of Uganda Revenue Authority (URA) over loss of more than $290,000 (Shs1.08billion) after tax officials allegedly ignored orders and released imported goods to fraudsters.
In the suit filed at the High Court Commercial Division, Afriglobal Commodities DMCC, through their lawyers AF Mpanga Advocates, claim that a company that purported to be based in Uganda ordered from it goods worth $290,250 (Shs1.087b) and URA eventually released the goods to the fraudulent importers even after it had been warned and had undertaken not to release them.
“In 2016, a company Orbit Chemical Industries Uganda Limited (Orbit Uganda) ordered and obtained on credit goods (480 G/L Glyphosate IPA Salt) from a Chinese company Jiangsu Good Harvest Wein Agricultural Co. Limited for $291,840 (about Shs1b). In the transaction, Orbit Chemical Industries in Kenya (Orbit Kenya) was misrepresented as the buyer. Further, Orbit Uganda was indicated as the consignee on the bill of lading while Orbit Kenya was the notify party,” the suit reads in part.
The bill of lading works as a receipt of freight services, a contract between a freight carrier and shipper and a document of title.
When Orbit Uganda defaulted on payments, the plaint continues, a demand notice was made to Orbit Kenya, who denied ever conducting any business with Jiangsu, the exporter. At this point, Jiangsu was informed, according to the plaint, that Orbit Kenya was not the same entity or related to Orbit Uganda.
The suit indicates that Orbit Kenya instituted an independent investigation and found that Orbit Uganda had previously not operated at the physical address it claimed to be located at, and that the company had never been licensed to carry out any business since its registration by the Kampala City Council Authority.
“…When company directors were contacted on their mobile numbers [during the investigation], they stated they had no office and just got the capital to commence operations. These findings were brought to the attention of the defendant [URA] and officials who were advised not to clear any goods involving Orbit Uganda and Orbit Kenya,” the suit explains.
The company faults officials of URA for eventually releasing the goods that they had held even with the knowledge that they were under investigation. The suit further contends that still in July 2018, three containers with goods fraudulently got from different suppliers, including the company that is suing, got into the custody of URA.
Since URA had been previously informed by the Afriglobal, the company which is suing, of fraud perpetuated using the company name Orbit Kenya, the plaint claims that an official of the defendant wrote to Orbit Kenya on July 18, 2018, asking them whether they had a branch in Uganda as goods had been imported in their name.
In response, adds the plaint, Orbit Kenya wrote back that they had no office in the Uganda, explaining that the people using their company name in the country were fraudsters.
Orbit Kenya advised URA not to release to them the goods – chemicals which included sodium saccharin worth $175,000 (Shs655m) and Aspartame worth $117,450.00 (Shs440m).
The plaintiff says they were surprised on the following day when the URA official wrote back to Orbit Kenya saying that the goods had been released to the importers in Uganda since Orbit Kenya had not responded in time.
On July 23, 2018, Orbit Kenya again wrote to URA complaining against the release and illegal importation of containers in the name of Orbit Chemicals Industries Limited.
They asked URA that containers still in its custody should not be released. To Orbit Kenya’s surprise, the plaint says, URA still released the remaining containers.
Afriglobal Commodities is praying court to order the defendant to pay special damages, general damages, punitive damages, interest above 18 per cent from date of release of goods until payment in full and costs of the court the suit.
Background
The suit indicates that Orbit Kenya instituted an independent investigation and found that Orbit Uganda had previously not operated at the physical address it claimed to be located at, and that the company had never been licensed to carry out any business since its registration by the Kampala City Council Authority.
