Hotloaf Bakery Ordered to Pay UGX 82 Million in Wheat Flour Debt

The Commercial Division of the High Court has ruled decisively in favour of Engaano Millers Limited, ordering Hotloaf Bakery Limited to pay an outstanding debt of UGX 82,012,600 for supplied wheat flour. The judgment, delivered on June 19, 2025, by Hon. Lady Justice Patience Rubagumya, underscored the bakery’s admission of the debt and the absence of any genuine legal defence.

Engaano Millers had initiated Civil Suit No. 293 of 2025 under summary procedure, a legal mechanism designed for straightforward monetary claims where a defendant has no plausible defence, seeking to recover UGX 92,012,600 from Hotloaf Bakery. The debt originated from a contract executed on December 5, 2018, for the supply of drum wheat flour.

Hotloaf Bakery, while acknowledging receipt of the flour and its indebtedness, argued that it had already made a partial payment of UGX 20 million, reducing the outstanding balance to UGX 82 million. The bakery sought leave to defend the suit, proposing to settle the remaining debt in weekly instalments of UGX 5 million, citing financial difficulties.

“We have not refused to pay,” stated Mr. Kodawa Mutano, Managing Director of Hotloaf Bakery, in an affidavit. “The business faced operational challenges. We’re committed to settling the outstanding UGX 82,012,600.”

However, Engaano Millers’ accountant, Mr. Naluswa Roy Jacob, opposed the application, asserting that Hotloaf had no valid defence. “The Applicant has already made part payments. Their indebtedness is clear, and no legal issues warranting a trial have been raised,” he noted.

After a thorough review of the affidavits and submissions from both parties, Justice Rubagumya concluded that there were no triable issues of law or fact that would necessitate a full trial.

“The outstanding amount of UGX 82,012,600 is not contested by the Applicant,” the judge ruled. “The Applicant has not raised any triable issue for determination by the Court to warrant granting leave to appear and defend the suit.”

Justice Rubagumya reiterated that summary procedure is intended for “clear and straightforward cases where the demand is liquidated and there are no issues for determination by the Court except for the grant of the claim.” She further clarified that the bakery’s admission of debt and willingness to pay in instalments did not constitute a valid legal defence, emphasising that an application for leave to defend must raise a “bona fide triable issue.”

Consequently, the court entered judgment in favour of Engaano Millers, also awarding them interest at a rate of 6% per annum on the decretal sum from the date of judgment until full payment, along with the costs of the application and the suit.

This ruling by the Commercial Division reinforces the principle that a clear admission of debt, without disputing the underlying obligation or presenting genuine legal questions, is insufficient to stave off a summary judgment. Hotloaf Bakery is now obligated to pay the UGX 82 million, plus accrued interest and legal costs, or face potential enforcement proceedings to recover the sums owed.