Stanley Technical Service Limited v UMEME Limited (EDT COMPLAINT 2 of 2016) [2017] UGIC 28 (3 November 2017)

Full Case Text

#### **THE REPUBLIC OF UGANDA**

#### **THE ELECTRICITY DISPUTES TRIBUNAL OF UGANDA**

### **COMPLAINT NO. EDT/02 OF 2016**

**COMPLAINANT UMEME LIMITED RESPONDENT STANLEY TECHNICAL SERVICES LTD VERSUS**

## JUDGMENT

*Before: Charles Okoth Owor - Chairman, Anadet Turyakira- Vice Chairman, Moses Musaazi - Member*

The complainant filed his complaint in the tribunal seeking the following orders:-

- **(1)** That the complainant's electricity supply be reconnected as existing singular landlord. - (2) That a sum of UGX.116,100,000 (One hundred sixteen million, one hundred thousand) being compensation for the loss suffered be paid to the complainant by the respondent until December, 2013. - **(3)** That the total sum of loss from December, 2013 to the time of the decision be paid by the respondent. - **(4)** That costs be paid by the respondent. - **(5)** Any other relief that this Honourable "court" may deem fit.

The summary facts of this complaint are that the complainant was a customer of the respondent since 2001. On 7th December 2011, the complainant's power was disconnected and when he approached the respondent, the respondent refused to reconnect the complainant's power supply unless the complainant joined Kiryatete Small Scale Industries Ltd. The reason advanced by the respondent was that all consumers in Kiryatete had to be configured to the bulk metering system. Being dissatisfied with the decision of the respondent, the

**1**

complainant referred the matter to the Electricity Regulatory Authority to no avail.

In its response, the respondent made a flat denial of the complainant's allegations. In the alternative to the denial, the respondent in paragraph 10 of its Response alleged that it was working in accordance with government policy of rolling out the meter bulk consumption program in Hoima and Masindi districts.

At the scheduling conference the parties agreed to the following facts;

- **1.** The respondent disconnected the complainant's power supply on 7th December, 2011. - 2. The complainant company sought intervention of Electricity Regulatory Authority (ERA.)

It is also not in contention that the complainant was not among the promoters of Kiryatete Small Scale Industries Ltd; a company limited by guarantee.

The following were disagreed facts:-

- The respondent carried out its duties in a lawful and professional manner **(>)** - The request to join bulk consumption group was done in accordance with the laws that give the respondent mandate to manage and determine the manner in which electricity is to be distributed. **(ii)**

Against the above agreed and disagreed facts, the following were agreed as issues for determination by this tribunal:-

- *1. Whether the disconnection ofthe complainant's supply was lawful.* - *2. Whether the complainant is entitled to the remedies sought.*

Both parties filed witness statements and the witnesses were thereafter crossexamined by opposite Counsels. The complainant's first witnesses was Patrick Kamanyire (CWI). His testimony was simple; He told the tribunal that he is a retired engineer and the managing director of the complainant company which was incorporated in 2000. The complainant became a customer of the defunct Uganda Electricity Board on 9th May 2001 and had until 7th December 2011, not heard any problem either with UEB or its successors till 7th December 2011.

On 7th December 2011, the complainant's power supply wad disconnected by the respondent. The reason for the disconnection as he was later informed by the respondent, was that the complainant was a non-member of Kiryatete Small Scale Industries Ltd., hereinafter referred to as "Kiryatete."

On 12th December 2011, the witness met the manager of the respondent, Hoima office, Ms Ogenga Doreen. The manager verbally informed the witness that the complainant can only be reconnected if it joins the other consumers in Kiryatete Small Scale Industries Ltd, a proposal the witness in his capacity as managing director of the complainant rejected.

The witness said that during the meeting with the respondent's representatives, he sought official communication on the policy but there was no official policy document given to him. He also requested for guidelines that guided/governed the bulk metering program, but no guidelines were availed to him.

The witness said the complainant refused to join Kiryatete because the complainant was not doing the same business as the members of Kiryatete. He w^as not sure how energy losses were to be shared and concluded that bulk metering was going to be too expensive for the complainant.

He contacted Electricity Regulatory Authority (ERA) who advised that the complainant be reconnected, a recommendation that was declined by the respondent.

The witness said as a result of the disconnection he has incurred losses as computed by his auditors.

The second witness for the complainant was **Kiiza Charles (CW2)** an accountant and auditor, with a Masters of Science degree in Accounting and Finance (MSC Acc *&* Fin) and Managing Partner with DUHEN Associates, an Auditing and Accounting firm.

The witness told the tribunal that his firm audited the complainant's books for the years ending 2010 and 2011. The audit report was admitted in evidence as CEX9.

Although the witness admitted that the company made loss in 2010 and 2011, he said the complainant's business was viable. He said viability is determined by the turnover and can be shown in the trend of the turnover. He said while there is a tendency for operational and fixed expenses to increase in the first year of operation, there is a tendency for rising income and the expenses to stabilize in the following years resulting in increase of revenue. The witness also said the turnover of 2010 can be used to determine the turnover for the next 7(seven) years.

The complainant's third witness was Catherine Nyabongo (CW3). The witness is a Principal Consumer Affairs Officer (Advocacy and Awareness), ERA.

The witness told the tribunal that she received a formal complaint from CW1 - Patrick Kamanyire in respect to A/c No.200467836. The gist of the complaint was that the complainant was being forced to join Kiryatete Small Scale Industries Ltd and had been disconnected allegedly, following his refusal to join the group.

The witness said she contacted a representative of the respondent and shared the ERA guidelines on bulk metering and advised her accordingly. The respondent did not adhere to her advice and instead insisted that the complainant must join Kiryatete Small Scale Industries Ltd before being reconnected. After failing to reconcile the parties, the witness then advised the complainant to seek redress from the tribunal.

The respondent had Doreen Ogenga (RW1) as its sole witness. She is the District Manager for the respondent, Hoima and Masindi districts.

The witness told the tribunal that in 2011, government issued directives regarding the consumption of electricity by small scale businesses in order to lower the tariff charges to consumers. The directive required small scale businesses to be supplied by way of bulk metering. This resulted in the formation of Kiryatete Small Scale Industries Ltd. Kiryatete Small Scale Industries Ltd entered a memorandum of understanding (MoU) with the respondent. She said the parties affected were notified and asked to join the project in order to benefit from the bulk metering program since it would no longer be possible to continue utilizing electricity individually as there would be no more individual billing for small scale businesses. She said the complainant was among those advised but refused.

On 5th June 2012 (6 months after disconnection) she wrote to the complainant advising the complainant that Kiryatete area was to be divided into 2 groups and the complainant could join one of them; an option the complainant declined to take.

She insisted that the disconnection was done within the framework of the law and during her cross-examination actually stated that the complainant should blame government and not the respondent.

In further cross-examination she admitted she did not serve a copy of the guidelines on the complainant. She did not have a copy in the tribunal and further conceded she had not seen a copy. She also conceded that the complainant was never a member of Kiryatete Small Scale Industries Ltd. She said it was not Umeme's responsibility to ensure the complainant stays as an independent consumer. She concluded.

*"Since the complainant did not take any of the options, we abandoned him."*

### **Issue No.l:**

# **Whether the disconnection of the complainant's power supply** was **lawful?**

The complainant's lawyers Mr. Paul Byaruhanga submitted that the disconnection of the complainant's power supply was unlawful because;

- The government directive alleged by the respondent did not exist. (a) - The respondent violated the respondent's statutory right to natural justice (b) - The respondent refused to comply with the bulk metering guideline 2013. (c) - If the complainant had yielded to respondent's pressure to join bulk metering, the contract would have been voidable for duress. **(d)**

Counsel cited several provisions of the law and case law to justify his submissions.

For her part, Counsel Janet Ayesigwa, contended for the respondent that the respondent acted in compliance with government directive requiring small scale businesses in Hoima to be supplied by way of bulk metering. She said the people of Kiryatete Industrial area where the complainant operated formed a company as

a bulk metering consumer and entered into a memorandum of understanding with the respondent.

She further contended that in that arrangement, it was no longer possible to serve an individual consumer. She concluded that the disconnection was within the law.

She submitted that no reliance can be place on the guidelines which came into force in 2013 when the disconnection was in 2011 as the law does not operate retrospectively.

We have considered the pleadings, the evidence of both parties and submissions of the Counsels on the issue above.

We do agree with Counsel Ayesigwa that it is now trite law that the law does not operate retrospectively.

The guidelines for implementation of Bulk Metering came into effect on February 1, 2013.

The complainant's power supply was disconnected on 7th December, 2011. The guidelines of 2013 cannot have been relied on to disconnect the complainant's power and therefore the legality or illegality of the disconnection cannot be founded on these guidelines.

The question then remains which government policy did the respondent rely on to compel the complainant to join Kiryatete Small Scale Industries Ltd and configure all clients in Kiryatete Industrial area on the new system?

In her own testimony, Doreen Ogenga, the only respondent's witness and area manager for Hoima expressly stated "/ *don't have a copy of the directive."* Later she stated *"I have not looked at the bulk metering guidelines."* These admissions were being made in the tribunal in 2017, 6(six) years after the disconnection which disconnection was of non-members of Kiryatete Small Scale Industries Ltd, following the commissioning of Bulk Metering.

There was no evidence availed to the tribunal that the respondent had before disconnection notified the complainant who was a lawful consumer/customer to inform the complainant about the new metering system and possibly its advantages.

There was no evidence that the complainant was in contravention of any policy or law.

The current power sector laws, regulations and policies can be traced way back in 1995.

Under the 1995 Constitution, under national objectives and Directive Principles of State Policy, part xxvii covers the environment.

Under para (iii) it is stated,

*"The State shall promote and implement energy policies that will ensure that peoples' basic needs and those of the environmental preservation are met."*

To operationalize this objective/ constitutional provisions and in line with global trends in privatization and liberation of the economy, Uganda enacted the Electricity Act 1999 Cap 145. Among others, the act was *to provide for the establishment of the Electricity RegulatoryAuthority, to providefor the generation, transmission, distribution, sale and use ofthe electricity, to provideforlicensing and control ofactivities in the electricity sector.*

Section 4 of the Act provides for the establishment of the Electricity Regulatory Authority (ERA). The functions of ERA are contained in Section 10 and include under (c), *"to prescribe conditions and terms of license issued under this act."*

In exercise of its powers, ERA has made several sets of regulations. Among those is the Electricity (Quality of Service Code) Regulation 2003. Under regulation 9 (1), a licensee shall undertake to make all reasonable efforts to prevent interruptions of service. Regulation 13 provides for Consumer/Complainants and Dispute Resolution.

Under clause (1) the consumer is entitled to lodge a complaint to the licensee i.e the respondent.

Clause (2) states; *"Upon complaint to the licensee, the licensee shall promptly make suitable investigation in writing of the results of the investigations."* Under clause 4 *"where after raising the complaint with the licensee, the consumer is not satisfied with the licensee's response to the complaint, the consumer may refer the complaint to the Authority."*

While the complainant was quick to lodge his complaint in a manner prescribed by the regulator, the respondent who didn't seem to take reasonable steps to avoid interruption of the complainant's power in compliance with regulation 9 did not promptly respond to the complaint as required by regulation 13 (2) above.

Although the disconnection was effected on 7th December 2011, the official response from the respondent was in the respondent's letter dated 2nd August 2013 (one year & 8 months later). See CEX6 i.e. it is in this letter that the final decision to the complainant's complaint was made.

The letter states in part *"It is with regret that the Kiryatete network can no longer serve for individual operation."*

Even under the widest stretch of imagination, a period of one year and 8 months cannot be the reasonable time anticipated by the regulations above cited.

Although under the Act, provisions which have already been cited above, and the regulations, the respondent is supposed to be guided by ERA, the regulator, in this particular case, the respondent's official at Hoima did not only ignore the complainant, but also dared the regulator.

This is evident from the evidence of Catherine W. Nyabongo, **CW3,** a principal Consumer Affairs Officer (Advocacy and Awareness). We shall recite some of her evidence. In her witness statement she states para 5; *"On 11th December 2012, I received a formal complaint from Eng. Patrick Kamanyire of Stanley Technical Services Ltd (A/c No.20047836). The complaint was assigned to me as a desk officer."*

Para 6 *"The complaint was to the effect that the respondent was forcing his company to join Kiryatete Small Scale Industries Ltd against the complainant's will. The complainant presented a disconnection order No.2263092 issued to him by Umeme Ltd, Hoima District Office."*

8 *"On 11th December 2012, after analyzing the complainant's concerns, I reached out and shared them with the Manager Umeme Ltd Hoima District office. I exchanged several emails and telephone conversation with the manager Umeme Ltd Hoima office in an attempt to help the parties arrive at an amicable resolution without success."*

During cross-examination she stated *"I am not aware of the criteria used in bulk metering in 2011. Bulk metering guidelines were approved in February 2013. I am not aware ofERA's approval to convert Kiryatete into a bulk metering zone. This is obvious because the Bulk metering guidelines were effective in 2013."*

The above evidence of Catherine Nyabongo makes it crystal clear that there was no government policy for the respondent to comply with so as to deny the complainant of service.

The disconnection of service is provided for in Electricity (Quality of Service Code) Regulations 2003.

Regulation 17 (3) thereof provides;

*"Service way be disconnectedfor any of the following reasons:-*

- *(a) failure to pay a delinquent account orfailure to comply with the terms of a deferred payment plan for instalment payment of a delinquent account;* - *(b) violation ofthe licensee's rules pertaining to the use ofservice in a manner which interferes with the service ofothers or the operation of non standard equipment, if a reasonable attempt has been made to notify the customer and the customer is provided with a reasonable opportunity to remedy the situation;* - *(c) failure to comply with deposit or guarantee arrangements;* - *(d) without notice where a dangerous condition exists for as long as the condition exists; or* - *(e) tampering with or by-passing the licensee's meter or equipment.*

*(4) unless o dangerous condition exists or the customer requests disconnection, service shall not be disconnected on a day, or on a day immediately proceeding a day when personnel of the licensee are not available to the public for the purpose ofmaking connections and reconnecting service."*

There is no evidence that the disconnection was premised on any of the above regulations.

It is clearfrom the above provision of the law and the relevant laws and regulations quoted that electricity is a critical service to both government and the population whose regulation is predicated on the premise that the respondent shall strictly adhere to the regulatory framework that was put in place for the respondent to achieve the optimum results envisaged in the policies as set above. To that extent, consumers should only be denied supply in circumstances spelt out in the specific relevant laws, regulations and policies.

It is very clear from the handling of the complainant the subject of this complaint that the respondent did not adhere to any regulatory provisions, guidelines or policy.

Kiryatete Small Scale Industries Ltd was a private company limited by guarantee. The complainant was not a member. There was no evidence that the members of Kiryatete Small Scale Industries Ltd had invited the complainant to join their company. Upon incorporation of Kiryatete Small Scale Industries Ltd became a legal person different from its promoters. In law the respondent could not enforce membership to the company even so against the complainant's will or even that of Kiryatete members.

It is the view of the tribunal that the disconnection of the complainant's power supply by the respondent was manifestly unlawful.

We accordingly answer the first issue in the affirmative.

## *Issue No.2: Whether the complainant is entitled to the remedies sought.*

The second issue was whether the complainant is entitled to the remedies sought.

We shall reiterate the remedies sought by the complainant;

- (a) That the complainant's electricity be reconnected as existing singular landlord - (b) Payment of a sum of UGX.116,100,000 being loss suffered upto December 2013 - (c) Loss for December 2013 todate - (d) Costs of the suit - (e) Any other relief.

**\***

(a) During the trial there was no expert evidence that the configuration of Kiryatete made it practically impossible to reconnect the complainant as a singular consumer.

Having decided that the complainant's electricity supply was illegally disconnected, we have no hesitation in ordering that the complainant's supply be reconnected as a singular landlord.

(b) and (c) During the resolution of the first issue, we have given our reasons why we believe the respondent acted illegally and arbitrarily. CW1, Mr. Kamanyire led evidence to the effect that the seed capital for the complaint was his terminal benefits from UEB. He established a workshop whose lifespan was prematurely brought to an end by the illegal and arbitrary acts of the respondent. We agree that the complainant must have incurred loss of future earnings.

However, even if we were to accept his figures and those of his financial consultant Mr. Kiiza CW2, the figures did not prove net profitability after deductions of all his expenses and business vagaries.

We have held before that the complainant will be compensated by the respondent if the tribunal is satisfied that the loss is a direct consequence of the respondent's actions. There is no doubt that the respondent's actions occasioned loss to the complainant. See the case of **SYLWAN KAKUGU TUMWESIGYE VS. TRANS SAHARA INTERNATIONAL GENERALTRADING; CC NQ.95/2005;** the plaintiff's car which the plaintiff had imported for special hire business had been lost by the defendant, a bailee. The plaintiff sued for damages. No documentary proof was availed to court in proof of damages. However, in his judgment,

Hon. Justice Kiryabwire stated... *"However no evidence was raised as to income. Clearly the motor vehicle was for business and would have earned some income. Taking into account the vagaries ofbusiness and taxation, Ifind that damages of UGX.1,000,000 per year for 4 years is fair. I accordingly award UGX.4,000,000 as general damages."*

The learned judge added..."Genera/ *damages is such as the law presumes to result in the infringement of a legal right. It is the natural and probable consequence of the breach. The plaintiff is required only to assert that such damage has been suffered but need not be strictly questioned."*

Putting into consideration the vagaries of business and the fact that there was no assess the complainant's losses at UGX.80,000,000/=. We accordingly order the respondent to pay the said sum to the complainant. evidence from the complainant that any efforts were made to mitigate losses, we

- (c) The respondent shall pay the costs of this complaint. - (d) We are reluctant to order any other relief not specifically prayed for.

In summary the following orders/declarations are made:-

- **(')** The disconnection of the complainant's power supply was unlawful. - **(ii)** The respondent shall re-connect the complainant as a singular customer. - (iii) The respondent shall pay to the complainant UGX.80,000,000/=as damages and compensation for loss incurred. - (iv) The respondent shall pay costs.

We so order.

**» '**

Charles Okoth Owor

hairman

Vice Chairman

Member

Moses Musaazi

Anaclet Turyakira