KAMPALA | Financially troubled plastics manufacturer Multiple Industries Ltd has suffered another legal blow after the High Court in Kampala refused to dismiss a defence filed by Chinese contractor Zhonghao Overseas Construction Engineering Co. Ltd in a commercial dispute over unpaid PVC pipe supplies.
The case, valued at Shs 436.7 million (approximately $117,000), revolves around claims that Zhonghao failed to pay for goods delivered under contractual terms. Multiple Industries sought to have the response and counterclaim struck out due to a five-day delay in the contractor’s filing. However, Justice Susan Odongo ruled that the procedural lapse was insufficient to justify such a punitive remedy.
“The right to a fair hearing stands as a fundamental pillar of justice which should only be denied for truly compelling reasons,” the judge said. “To strike out the defence… would occasion manifest injustice.”
As a result, the case will proceed to a full trial on both the original claim and the counterclaim. No costs were awarded at this stage.
The court setback adds to a growing list of financial and legal challenges confronting Multiple Industries. Weeks earlier, the company secured an interim injunction against Standard Chartered Bank Uganda, preventing the bank from foreclosing on assets in a separate dispute involving more than Shs 21.7 billion in loans. These include foreign and local currency credit facilities such as a USD 5 million import loan, a USD 499,300 term loan, and overdrafts totaling Shs 3.35 billion and USD 300,000.
Multiple Industries alleges the bank violated a February 2024 restructuring agreement by submitting damaging credit reports to the Credit Reference Bureau, which has hindered the company’s efforts to secure alternative funding. “Our attempts to source funding from elsewhere have been solely hindered by the negative credit rating caused by the bank’s false and illegal reporting,” company director Sukhminder Singh Baryan told the court.
Justice Simon Peter Kinobe, who presided over the banking dispute, emphasized that foreclosure would render the company’s application “nugatory” and ordered the status quo to be maintained until the substantive matter is heard in October.
The dispute with Zhonghao highlights how Multiple Industries’ liquidity crisis is affecting operations and supplier relationships. Once considered a stable mid-sized player in Uganda’s industrial manufacturing sector, the company now struggles to maintain its supply chain and fulfil contractual obligations. Analysts warn that the company’s current credit profile severely limits its options.
“Any firm unable to service multiple tiers of debt while fending off supplier litigation is clearly in distress,” said a Kampala-based investment analyst. “It’s no longer just about cash flow it’s a credibility problem.”
The High Court has not yet set a date for the full hearing in the Zhonghao matter. Meanwhile, Multiple Industries and Standard Chartered Bank are expected back in court on October 13 for directions in the main banking suit. With both creditor and supplier disputes unfolding simultaneously, the coming months will likely determine whether Multiple Industries can restructure effectively or slide further into insolvency.