‘Myala’ Contractor Eats Big as Court orders KCCA to pay Him Shs1.3bn Over Drainage Contract Dispute

The High Court’s Commercial Division has ordered Kampala Capital City Authority (KCCA) to pay Bisons Consult International Limited Shs1.302 billion in special damages after finding that the authority breached several obligations arising from a multimillion-shilling drainage construction contract.

Justice Stephen Mubiru, in a judgment delivered on September 21, 2026, also ordered KCCA to pay interest at 20 per cent per annum on the award from September 18, 2020, until payment in full, together with the costs of the suit.

The judgment followed a long-running dispute over an admeasurement contract signed on May 2, 2016, under which Bisons Consult was hired to undertake design updates and construct eight drainage channels in Kampala at an initial contract price of about Shs4.29 billion.

The case, Civil Suit No. 0744 of 2020, was heard on February 10, 2022, before the judgment was finally delivered more than four years later.

At the heart of the dispute was whether KCCA had breached the contract through delays, changes to the scope of works, inadequate extensions of time, problems with survey information and site access, and other decisions made during implementation.

But the case ultimately produced a more complicated finding: while Justice Mubiru found that KCCA had committed antecedent contractual breaches, he also found that Bisons itself later abandoned the project and that this independent breach entitled KCCA to terminate the contract.

The contract that triggered the battle

The agreement covered eight drainage channels: St Dennis, Nalweyiso, Kabaluka, Nakinyuguzi, Nabunya, Kimera, Luwombo and Nyanama.

The contract was supposed to run for 12 months from June 20, 2016.

According to Bisons, problems emerged almost immediately.

Two channels—Luwombo and Nyanama—were withdrawn from the programme and replaced with Kabaawo and later Sebanja. The contractor argued that it had already invested time and resources in the original channels before they were removed.

The company also complained that KCCA failed to provide physical survey control points and adequate survey information, delayed approval of designs, failed to provide unobstructed access to some sites and took too long to respond to unforeseen physical conditions.

The contractor further complained about variations, the rejection of quarry material and KCCA’s insistence on a higher concrete mix than the one originally specified.

KCCA disputed most of these allegations.

The authority argued that Bisons had performed poorly, submitted incomplete or defective designs and failed to maintain sufficient momentum on the sites.

KCCA told court that by the original completion date the contractor had achieved only 38 per cent completion. Even after three extensions and a 100-day liquidated damages period, KCCA said completion stood at only 56.7 per cent.

Bisons, however, maintained that about 80 per cent of the works had been completed by the time the project ended.

That conflict over completion became one of the most important factual battles in the case.

The BoQ dispute

One of the most significant aspects of the judgment concerned the Bills of Quantities (BoQ) used during the tender process.

Bisons argued that KCCA had substantially overstated the quantities and costs in the tender documents, resulting in a contract value that was more than the actual scope of work could absorb.

The contractor put the difference at Shs1.482 billion, representing more than 34 per cent of the contract value.

The court examined the legal significance of inaccurate quantities in an admeasurement contract, where the contractor is ultimately paid according to the actual work measured rather than simply receiving the original headline contract sum.

Justice Mubiru explained that quantities in an admeasurement BoQ are ordinarily estimates rather than absolute guarantees. But that did not mean an employer could make materially false representations without consequences.

The judgment examined the difference between an innocent calculation error, negligent misrepresentation and fraudulent misrepresentation.

The court found that the discrepancies in the BoQ were substantial.

Among the figures examined was a day-works allocation of Shs206 million when, according to the evidence, only about Shs20 million was required.

The judgment also highlighted an allocation of Shs80 million for special off-site laboratory tests which were never required during implementation.

Other disputed quantities involved excavation, prefabricated culverts, tributary channels and removal of existing structures.

Justice Mubiru observed that the pattern affected several independent cost categories and was therefore materially different from a single typographical or arithmetic error.

The court further considered evidence that, after the discrepancies became apparent, KCCA’s Project Manager allegedly promised that the difference would be absorbed through additional works.

That additional work was never provided.

The court’s discussion of the BoQ therefore went beyond the ordinary question of whether construction estimates may change. It considered whether the tender documents contained representations upon which the contractor was entitled to rely and whether the discrepancies crossed the legal line into actionable misrepresentation.

The judgment stressed that contractors bidding for public works are entitled, within the limits of the contract, to rely on positive technical representations contained in tender documents, particularly information concerning matters within the employer’s engineering knowledge.

KCCA was found to have contributed to the delays

The court also conducted an extensive examination of the competing explanations for the project’s delays.

Justice Mubiru found that KCCA’s failure to provide physically established control points contributed about 65 working days of delay.

The court also found that delays in approving designs and technical solutions contributed further time to the project.

One particularly significant dispute involved the Kabaluka Channel, where an engineering problem remained unresolved for several months. The court attributed approximately four months of net delay to KCCA after taking into account delay attributable to Bisons.

The court also found that KCCA’s failure to secure rights of way contributed approximately two months of net delay after accounting for the contractor’s own contribution.

The replacement of two drainage channels created another period of delay. According to the judgment, KCCA granted approximately 67 working days for the replacement process, while the actual delay was approximately 108 working days, leaving a shortfall of about 41 working days.

Weather was another major factor.

The court found that the appropriate weather-related extension should have been 171 working days, compared with only 66 working days granted by KCCA.

That left a shortfall of 105 working days.

The court therefore concluded that the extensions granted to Bisons were inadequate, although it also found that Bisons itself contributed to some of the delays.

This led Justice Mubiru to apply the principle of concurrent delay rather than treating the dispute as a simple case in which one party was solely responsible.

Yet the contractor’s abandonment changed the case

Despite finding that KCCA had breached contractual obligations, the court did not accept Bisons’ argument that the eventual termination was wrongful.

The judgment records that work eventually stopped completely on all channels between January and April 2018.

The court found that Bisons did not provide a satisfactory explanation for the complete stoppage and had not invoked the contractual mechanisms available to it, including dispute resolution procedures, while continuing with available works.

Justice Mubiru held that a contractor who, without justifiable cause, abandons a project commits a total breach of contract.

The court therefore found that Bisons’ abandonment was a separate and independent breach.

That finding was crucial.

Although KCCA had committed antecedent breaches, those breaches did not, in the court’s view, justify the contractor’s complete cessation of work.

Consequently, the termination of the contract was held to be lawful.

The finding did not, however, wipe out KCCA’s earlier contractual breaches.

The judgment expressly held that Bisons retained a right to recover damages arising from those antecedent breaches.

KCCA’s failure to account after termination

Perhaps the most consequential finding concerned what happened after KCCA terminated the contract and called on the performance guarantee.

KCCA had encashed the performance guarantee for Shs429,376,441.

The authority relied on the contractor’s failure to complete the works as justification for the action.

But Justice Mubiru found that KCCA had failed to follow the accounting procedure required under GCC 60.1.

That clause required the Project Manager, following termination for fundamental breach, to issue a certificate showing the value of work done and materials ordered, less relevant payments and the contractual deduction relating to incomplete work.

Instead, KCCA proceeded to encash the guarantee without first issuing the required termination account.

The court regarded this as a breach of contract.

It was particularly critical of the absence of an explanation for the failure to issue the certificate.

KCCA’s witnesses had relied on completion figures of 38 per cent and later 56.5 per cent, but the court noted that the basis upon which those percentages had been calculated was not explained.

Bisons, meanwhile, had presented evidence suggesting 80 per cent completion.

Justice Mubiru held that KCCA’s unsupported completion figures could not be treated as conclusive.

The court said the failure to issue the GCC 60.1 certificate created an adverse inference that the accounting might not have supported KCCA’s position.

The performance guarantee became a separate legal battle

The court then connected three issues: KCCA’s duty to account, whether the encashment was excessive, and whether KCCA had been unjustly enriched.

Justice Mubiru held that the amount recovered under a performance guarantee must ultimately be measured against actual proven losses.

The fact that a performance guarantee could be called did not, in the court’s reasoning, give the beneficiary an unrestricted right to retain money beyond its actual entitlement.

KCCA therefore had to demonstrate that the amount it retained corresponded to its actual losses.

Because the authority had not carried out the contractual accounting required under GCC 60.1, the court found that it had failed to establish that the entire amount encashed corresponded to proven losses.

The three issues were consequently resolved in Bisons’ favour.

The court held that KCCA’s failure to account constituted a contractual breach, that the encashment was excessive to the extent it could not be justified by actual losses, and that retention of any such excess constituted unjust enrichment.

But Bisons did not win everything

The judgment was not a blanket victory for the contractor.

Several of Bisons’ major claims were rejected.

Among them was the claim for Shs824.4 million in lost profits on unexecuted works.

The court held that because Bisons had abandoned the project and its abandonment had triggered the lawful termination, it could not claim lost profits on work that remained unexecuted.

The contractor’s claim for general damages linked to the guarantees was also rejected where the court found that the consequences flowed from Bisons’ own default.

Bisons had also sought exemplary and aggravated damages.

The court rejected that claim, holding that punitive damages are generally not recoverable for breach of contract and that exemplary damages in such circumstances require an independent tort capable of supporting such an award.

The Shs1.3 billion award

After separating the claims that were proved from those that were not, Justice Mubiru entered judgment for Bisons for Shs1.302 billion in special damages.

The award comprised Shs348,430,257 for extra costs incurred in procuring and sustaining the guarantees; Shs220,492,500 for additional costs arising from the re-scoping of the works; Shs187,446,000 for additional expenditure caused by the change in concrete mix; Shs230,931,400 for costs caused by delays attributable to KCCA; Shs136,959,189 for the value of unmeasured work; and Shs178,191,223 as a refund of liquidated damages deducted from the contractor.

The court rejected or did not award several other sums that had originally been claimed.

The Shs1.302 billion award will attract interest at 20 per cent per annum from September 18, 2020, the date the suit was filed, until payment in full.

KCCA was also ordered to pay the costs of the suit.

A judgment with consequences beyond one drainage contract

The Bisons Consult ruling is heavily concerned with construction-contract law, particularly the legal consequences of inaccurate Bills of Quantities, concurrent delay, abandonment, performance guarantees and post-termination accounting.

It draws a distinction between an employer’s legitimate right to protect itself after a contractor’s default and the separate obligation to account for money recovered under a performance guarantee.

The court’s treatment of the BoQ is equally significant. While quantities in an admeasurement contract may ordinarily be estimates, the judgment makes clear that this does not provide an unlimited shield where tender documents contain materially inaccurate technical representations.

At the same time, the ruling demonstrates that a contractor’s success in establishing breaches by an employer does not necessarily make the employer’s termination unlawful.

In this case, KCCA’s own contractual breaches survived the contractor’s subsequent abandonment of the project, but Bisons’ abandonment ultimately made the termination lawful.

The result was therefore a divided finding on liability: KCCA was held responsible for a series of contractual breaches and ordered to compensate Bisons for specific losses, while Bisons was held responsible for abandoning the works and was denied damages that flowed from its own default.

The final financial consequence, however, was substantial: KCCA must pay Shs1.302 billion, plus interest at 20 per cent per annum from September 2020 until payment in full, as well as the costs of the litigation.

Relatedly, previously Court Ruled that KCCA Unlawfully Shut Out Nakivubo School Founders, as reported Here.