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Ugandan firm fleeced of Ushs8bn by UK investors

oilOwners and employees of a local firm are counting losses after a UK-based oil and gas company engaged them to do related work in neighbouring Democratic Republic of Congo (DRC) only to flee without paying for work done amounting to USD2.3m.

Aside from losing the colossal sums, the local firm faces an added distress of facing lawsuits from numerous firms and individuals who provided services and goods in execution of their job in DRC.

The distressed local firm is Mineral Services Limited (MSL). Its promoters describe MSL as a logistics company that provides services to the oil and gas contracts as well as service providers. It is based in Bugoloobi with a branch in Ntoroko in the western part of Uganda that serves DRC.

Tesla Exploration International Limited (TEIL) is the UK firm that stands accused of fleecing MSL of money they toiled for in foreign land.

Things are really too bad for MSL after it emerges that TEIL’s business in the Netherlands is being wound up over serious financial challenges. The directors of the local firm also appear to have lost physical contact of the bosses of TEIL who are thought to have fled to the safety of their home country.

MSL has now filed a lawsuit at the commercial section of the high court, hoping against hope that the courts of law will help to make TEIL pay up what is owed to them( MSL).

MSL’s lawyers are Kiwanuka, Karugire and Co. advocates. They’ve asked court to authorize them to attach the properties of TEIL available in Uganda.

They want the attachment process to precede the hearing of the main lawsuit, fearing that the properties are most likely to change hands yet the equipment remain the only way through which MSL can realize what TEIL owes them through selling them.

The pre-trial application for attaching TEIL’s properties in Uganda had not been heard by Wednesday. The deputy registrar Thaddeus Opesen was expected to attend to it as a matter of urgency given the circumstances of the case.

Genesis

We know that it all started when TEIL approached MSL with the job of providing what is called seismic services in DRC. The job entailed construction of camps, hiring of laborers, warehousing, provision of four wheel drive vehicles, storage facilities, among other logistical services.

The relationship between the two parties was later on November 20, 2014 and February 4, 2016 reduced into an agreement setting out the terms of engagement.

Some of the salient clauses of the agreement is one that provided for payment within 30 days of the presentation of the invoice to the employer. If payment wasn’t made, a penalty of 1.5% of the total sums due would be applied which reportedly translated to USD33000.

Court documents tabled to the commercial court indicate that MSL did the job required of it up to June this year. It appears TEIL never paid up the money due to MSL since the employee states that by August 31, 2016, the employer owed it a total USD2, 333,779.

“Despite numerous reminders, the defendant has failed, ignored or refused to pay the sums due,” MSL complains.

MSL tables to court numerous e-mail communications between its officials and those of TEIL in which the payment was discussed several times and the employer promised would pay, but all came to naught.

In some of the e-mails, TEIL officials categorically pointed out their inability to pay and asked the directors of MSL to take the option of selling the company’s properties in Uganda.

In other e-mail communication, TEIL officials reveal how their business in the Netherlands was facing being put under receivership over financial related issues.

MSL says that the failure by TEIL to pay has visited tremendous loss and headache to them as well as loss of chance to invest the sums for purposes of growing their business.

They blame their woes on TEIL who they want to pay damages in that regard.

ustice Jane Alividiza has been allocated the dispute to hear. It is not clear how the people of TEIL will be served with court documents since they are said to be missing from Uganda.

All the same, court can advertise summons for them to appear in the newspapers in case they can’t be easily located in Uganda.