The clock is ticking, but the outcome remains uncertain in the high-stakes sh5.3b storage fee case pitting Standard Chartered Bank (SCB) against its opponents in a courtroom showdown that has dragged on for four years.
The documents seen by this website indicates that on January 8, 2021, the bank through its lawyers from Ligomarc Advocates, and its associate, Rita Mwesige, vacated all items on the plot belonging to the Three Ways Group of Companies (in receivership) located opposite Livercot ICD in Namanve Industrial Park.
The items were subsequently transferred to Liberty ICD Limited, approximately 2km away. Immediately after the plot was vacated, Mandela Group made a payment to StandChart and took possession of the land and structures.Prior to this sale and possession, Ligomarc Advocates sent a team led by Peace Kanyonyozi to identify a suitable location for relocating the items [trucks and containers] from Three Ways Group.
After several visits, an area at Liberty ICD Limited was selected. Multiple professional meetings were held during which storage charges were negotiated via email, resulting in a 20% discount. Ligomarc ultimately obtained direct approval from StandChart, confirming that the storage rates were acceptable.Once all contractual terms were agreed upon by all parties, on January 9, 2024, Ligomarc Advocates hired Inter Mech Enterprises Limited.
StandChart paid sh15m for their services using a cheque.The entire transfer was completed under the supervision of Ligomarc, taking a total of 4 days and occupying almost 3 acres of land within Liberty ICD. The items included 96 trucks/trailers, 17 containers (20ft and 40ft), and numerous other loose items.Ligomarc retained all locks for the containers, which were rented by them, as well as the keys to the trucks and log books.
Therefore, StandChart’s responsibility was clear, in accordance with the principles established in Schuler AG v Wickman Machine Tools Sales Ltd (1974) AC 235, HL, which emphasises the importance of good faith in contractual agreements.At no point did Ligomarc Advocates disclose the ownership of the items or provide details regarding the Three Ways Group of Companies, only mentioning that the items would be stored for a short period.Liberty ICD received the items, cordoned off the area, and assessed storage charges.
Liberty ICD was not introduced to any other parties involved or the circumstances surrounding the transfer of these items into their yard.The arrangement was based on a professional undertaking grounded in integrity, ethical behavior, and good faith, as outlined in the contract.Given the enormity of the items, Liberty ICD had to introduce additional security measures, including askaris, dog patrols, Local Defence Units, and security cameras.
This requirement was communicated to Ligomarc, given the sheer volume of items and the 2.5 acres of space needed. During the transfer, Ligomarc staff were always present, coordinating directly with the movers, Inter Mech Enterprises Limited.Regarding payment, StandChart made a partial payment in September 2022 for three months’ storage charges covering the period from January to March 31, 2021.
This payment was part of a mediation settlement at Mukono High Court, in which Uganda Revenue Authority and Three Ways Group were not present.Court caseInitially, StandChart argued that storage charges should be paid by the Three Ways Group of Companies, which was in receivership and had no funds.
Given their financial situation and absence from the court proceedings, it seemed implausible that they could be held responsible for the storage charges. The bank tired, reiterated this argument on several occasions, suggesting that the Three Ways Group should bear the costs as delaying tactics.According to court documents, Liberty ICD had a binding contract only with StandChart, making the bank’s argument about the Three Ways Group’s liability totally not possible.
Court documents indicate that in April 2021, URA issued warrants of distress against the Three Ways Group of Companies, which later on became aware of Liberty ICD.Turned tablesFollowing the development, StandChart then suggested that URA would be responsible for the storage charges, as the goods would become URA’s responsibility for debt collection.Ligomarc Advocates’ strategy appeared to be one of avoidance, shifting responsibility first to the Three Ways Group and then to URA.
However, the facts indicated otherwise: URA never visited the site, took inventory, or placed police officers to secure the assets.Furthermore, URA would have been required to remove the items to their own auction area, which was not done. According to the by-law, items under warrants of distress must be auctioned within 10 days, but Ligomarc and SCB prolonged the matter over two years with confusion, delay tactics, and shifting responsibilities.
Subsequently, Liberty ICD, represented by Advocate Dennis Nyombi, took the matter to the Mukono High Court. Notably, the suit only named Ligomarc Advocates as the defendant, excluding StandChart, even as a co-defendant.This approach of suing only the legal counsel and not the client is unusual and potentially sets a legal precedent.
An investigation into Advocate Dennis Nyombi revealed that he was born with the surname Lule and later changed his name to Nyombi while in university. His family background includes his mother, Rose Lule Nakaye.After conducting research, it appears that the specific name ‘Nyombi’ might have been chosen due to its association with the previous Attorney General, Peter Nyombi.
Notably, Nyombi often falsely implies a familial connection to create an impression of prestige and adopt an assertive style.Another lawyer, Judge’s ruling Later, a law firm K and K Advocates took over the case and found it unusual that only Ligomarc was sued while StandChart, the second-richest bank, was initially excluded and questioned Nyombi’s motives given the clear facts of the case.
The lawyers promptly applied to have StandChart added to the suit which caused delays and an extra unnecessary cost for Liberty ICD. On July 3, 2024, Justice Florence Nakachwa Dollo (now Court of Appeal Judge) ruled that the bank should be added to the suit as a defendant after examining the principal-agent relationship between Ligomarc and the bank.
The judge emphasised that this relationship was fundamental to the case, particularly given the client’s receivership status and also that storage charges were paid by StandChart in accordance with the contractual agreement.
This was the first judge’s ruling.Locus visitIn December 2024, Justice Nakachwa, made a locus visit to Liberty ICD Limited to inspect the items spread over 2.5 acres. This visit occurred three years after Ligomarc and StandChart brought 96 trucks and 17 containers to Liberty’s premises.
Following the visit, StandChart, now represented by KAA Associates, petitioned to add both the Three Ways Group and URA to the suit.Separately, this matter has also been taken to the Commercial Court, where it is claimed that StandChart sold the land belonging to the Three Ways Group to the Mandela Group below market value.
To date, no developments have taken place on the said land. Additionally, there is another case in the Commercial Court concerning the movement of items from the Three Ways Group’s land, including issues of authorisation and damages incurred.However, providing some relief to the bank’s position, the judge in the second ruling allowed the Three Ways Group and URA to be added to the suit.
Their responses were resolute.The Three Ways Group appealed the decision, arguing they were not a party to the dispute since their specific issues with StandChart were already being addressed in the Commercial Court.
This move seemed like another delay tactic by StandChart. URA also firmly objected, stating they had no obligation for storage charges and should not be part of the case, given the clear facts of the matter.
Who is responsibleA closer look at the case reveals that while StandChart faces challenges in the Commercial Court, the current suit for storage charges is straightforward under contract law.SCB’s partial payment for three months’ storage charges clearly demonstrated their acknowledgment of the storage contract.
Furthermore, the 2.5 acres of prime space occupied by the items could have been used by Liberty ICD to build warehouses for rent, resulting in lost income.PrayersLiberty ICD is seeking sh5.3b in accrued storage charges after a 20% discount, plus an additional sh4b for general damages, punitive damages, and loss of income due to the inability to utilise the land for income-generating activities.
Instead of acting ethically and in accordance with contract law, the bank has shown a lack of good faith and avoided its obligations.This situation echoes the principles highlighted in James Ssebagala vs China Palace Ltd (Civil Suit No. 152 of 2015), where Justice Wangutusi referenced the case of Stockloser v Johnson (1954) 1 All ER 630.
The bank has made concerted efforts to evade its contractual obligations and use its influence to avoid storage charges, despite the clear nature of the case.Kicker: Standard Chartered Bank stands accused of breaching its obligations under Ugandan law, with allegations that it has utilized legal firms to engage in delay tactics, avoidance, and intimidation of Ugandan businesses.
