Kampala, Uganda
In a legal battle that could determine the fate of Aya Investment, the Commercial Division of the High Court has issued a summons, demanding the company to present its defense in a case filed against it by Sanlam General Insurance. The suit seeks to put Aya Investment under liquidation due to an alleged failure to pay a substantial debt.
Aya Investment finds itself in the midst of a legal storm as Sanlam General Insurance presses forward with its bid to have the company placed under liquidation. Sanlam Insurance claims that Aya Investment has failed to pay an outstanding amount of Shs259 million, despite multiple demands and reminders. According to court documents, Aya had taken out various insurance policies from Sanlam, including workers’ compensation and fidelity guarantee insurance. However, the company allegedly defaulted on a payment of Shs178 million.
On June 23, 2022, Justice Jeanne Rwakakooko ruled in favor of Sanlam, ordering Aya to settle the debt. The judgment required Aya to pay $38,773 and Shs33 million to Sanlam, along with additional costs and damages. However, despite the court’s decision, Sanlam claims that Aya has failed to comply with the order and has neglected the execution process for over seven months.
In response to Aya’s apparent inability to fulfill its financial obligations, Sanlam is seeking a declaration from the court, citing section 3(1)b of the Insolvency Act 2011. The company aims to prove that Aya is unable to pay its debts and therefore requires the appointment of a liquidator to initiate the liquidation process. Liquidation involves selling a company’s assets to settle outstanding debts owed to creditors and shareholders. Sanlam argues that without the liquidation, it stands to suffer significant financial losses resulting from Aya’s alleged nonpayment.
The Commercial Court has recently summoned Aya Investment to file its defense within 15 days. Failure to respond to the summons could result in the case being heard and determined in Aya’s absence. The court’s decision will have far-reaching implications, as it will determine whether Aya Investment faces liquidation or if alternative resolutions can be reached.
