The Court of Appeal has ordered UMEME Limited to pay Shs100 million in general damages to Edroch Plastics Company Limited after finding that the electricity distributor unlawfully disconnected the company’s power supply and negligently failed to restore the three-phase electricity required to operate its machinery.
The ruling follows an appeal by Edroch Plastics against a 2018 decision of the High Court’s Commercial Division, which had dismissed the company’s lawsuit against UMEME over the prolonged interruption of electricity at its factory in Katoogo Zone, off Nabweru Road, in Kawempe Division, Kampala.
In a judgment delivered on October 28, 2026, Justice Esta Nambayo, with whom Justices Cheborion Barishaki and Musa Ssekaana concurred, found that UMEME had no sufficient legal basis to keep Edroch’s electricity supply disconnected simply because power theft had been reported in the area.
The court noted that UMEME disconnected the electricity supply in July 2012 following reports of power theft affecting the neighbourhood. Subsequent investigations identified a maize mill as responsible for the theft, but Edroch was neither implicated nor charged.
Justice Nambayo held that suspicion alone could not justify the continued disconnection of Edroch’s electricity supply.
“Suspicion alone did not satisfy the condition in clause 15.5.1. Nor did the general reference to an anti-theft operation establish a basis for treating the Appellant’s own supply as lawfully disconnected under that provision,” Justice Nambayo held.
She further observed that the existence of electricity theft in an area did not automatically mean that every customer connected to the affected line was unlawfully using electricity.
“The existence of electricity theft somewhere in the area does not establish unlawful use by every consumer served by the affected line,” she ruled.
The court also found that although electricity was eventually restored to the surrounding area, Edroch continued receiving only two of the three phases required to operate its machinery.
The company’s managing director, Muwonge Noah, testified that he repeatedly contacted UMEME seeking the restoration of the three-phase supply. His efforts included a written complaint received by the distributor on October 16, 2012.
Justice Nambayo noted that UMEME’s own witnesses confirmed that Edroch required three-phase electricity and that its machinery could not operate on the two-phase supply it was receiving.
One of the distributor’s witnesses, District Manager Hussein Mubiru, was unable to explain why the company remained without an effective electricity supply for more than 13 months.
The court held that UMEME had an obligation under the Electricity (Primary Grid Code) Regulations, 2003, to use its best endeavours to restore electricity supply as soon as possible following an interruption.
“The lengthy failure to rectify the fault after notification, considered together with the absence of an adequate explanation for the delay, confirms a failure to exercise reasonable care and to discharge the obligation under clause 9.4.1(c),” Justice Nambayo said.
She found that UMEME’s failure to restore the required electricity supply prevented Edroch from operating its machinery and significantly disrupted its business operations.
“I am satisfied that the Respondent knew that the Appellant required three-phase electricity and that failure to restore it would impede production,” she held.
The court consequently concluded that UMEME had negligently failed to restore the required electricity supply within a reasonable time.
Court rejects Shs275.9 million special damages claim
Despite finding UMEME liable, the Court of Appeal rejected Edroch’s claim for Shs275.991 million in special damages.
The company had sought Shs192.6 million for damaged work in progress and Shs83.391 million in retained losses, arguing that the losses resulted from the prolonged electricity interruption.
However, Justice Nambayo found that the company had failed to specifically plead and sufficiently prove the particular losses it was claiming.
“I would therefore find no basis to award the claim for special damages,” she ruled.
Nevertheless, the court found that Edroch had demonstrated substantial business disruption and inconvenience warranting compensation.
Although the company had sought Shs200 million in general damages, the court awarded Shs100 million.
Justice Nambayo explained that the award took into account the approximately 13-month interruption, the commercial purpose of the electricity supply, the inability to operate machinery and the company’s repeated efforts to have the supply restored.
“These circumstances establish substantial business inconvenience deserving compensation,” she held.
The court also awarded Edroch the costs of both the High Court proceedings and the appeal, overturning the earlier order that had required the company to pay UMEME’s legal costs.
In its final decision, the Court of Appeal set aside the High Court judgment that had dismissed Edroch’s suit and entered judgment in favour of the company against UMEME for unlawful disconnection and negligent failure to restore the required three-phase electricity supply within a reasonable time.
The court, however, noted that there was no need to order reconnection because electricity had eventually been restored to Edroch on August 29, 2013, after the lawsuit had been filed.
