The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The respondent refused to accept the principle of simple interest. The appellant declined to pay compound interest. The dispute was taken to court for resolution. The liability whether to pay compound or simple interest can only commence from the date when the dispute whether to pay that interest is resolved.
The court held that when determining which interest to use a clear distinction needs to be made between the reasons for awarding a simple interest and those that justify an award of compound interest in legal proceedings. A simple interest arises invariably when a party which is liable or owes money fails to pay what is due before or on the date agreed, stipulated, implied. The court exercises its discretion as to the rate and date when interest shall be paid.
However, the award of compound interest depends on other different criteria beside the discretion of court. Compound interest is not founded simply on the mere fact of indebtedness nor on the date the principal debt becomes due nor on the duration it has taken to pay since accruing. It is based on one or more of a multiplicity of reasons such as the law applicable to the transaction, the nature of the business transacted or agreed between the parties, the construction of the agreement or contract made between the parties, the trade custom of the business out of which the indebtedness arose, intentions of the parties or the consequences of the commercial transaction that was concluded between them.
The court concluded that the arguments advanced on behalf of the respondent did not point to the award of a characteristically compound interest. There was no evidence presented or authorities cited to suggest that in this case compound interest was intended, implied or anticipated by the parties or implied by law. The authorities cited in this appeal did not assist court to decide that there was a compound interest implied or contemplated in this case. In the result, the appeal succeed.
The respondent sold a car to a man who paid half price and took the vehicle
leaving the original registration book with the respondent. The new buyer on
the same day sold the car to the appellant. The respondent bought a suit
against the appellant and his predecessor in title for orders of specific
performance of the sale agreement, damages, interest and costs of the suit.
The trial court entered judgment for the respondent and the appellant’s
appeal to the court of appeal was dismissed hence this appeal.
The first issue was whether the appellate court erred in law and in fact to conclude that the respondent could not be sued. The court observed a difference in the extent of immunity accorded in the domestic act and that granted in the Eastern and Southern African Trade and Development Bank Charter of the Preferential Trade Area (PTA) for Eastern and Southern African States (the charter) and Eastern and Southern African Trade and Development Bank Act (the act), with the charter providing for absolute immunity whilst the act offered functional immunity. It reasoned that the intention of the act is to govern the relationship between Uganda and the respondent. Applying the ejusdem generis rule (that a general term describing a list of specific terms denotes other things that are like the specific elements) to interpret the objectives of the act, the court concluded that immunity was not intended to extend to third party relationships as these are not covered by the functionality principle underpinning the act. The court held the appellate court erred in its finding and instead concluded against immunity.
The second question was whether it was a procedural requirement to obtain a waiver before instituting suit against the respondent. Reiterating the functionality basis of the respondent’s immunity and the fact that it did not extent to suits from third parties for contractual breach, the court reasoned that the waiver requirement was inapplicable and unnecessary. It thus concluded that there was no need to obtain a waiver before commencing suit and allowed the appeal.
This is a second appeal by the appellant, both
his original suit in the High Court and his
subsequent appeal to the Court of Appeal
having been dismissed. The background is
that the appellant thought to borrow money
from the respondent and gave security as his
land, the issued cheque bounced and the
respondent used the security to secure a
mortgage from the first respondent which he
failed to pay and the first respondent sold the
land. The appellant was evicted and the
business closed and the appellant alleged
fraud but was unsuccessful both at high court
and court of appeal hence this appeal on the
grounds of the sale of land using the power of
attorney, the validity of the mortgage on the
appellants land, holding on fraud, improper
consideration of the evidence on record and
complete disregard of the facts.
The applicant in this application sought for an order staying the execution of the
judgment of the court of appeal until the determination of the appeal to this court, and
that costs of the application be provided for.
This is a second appeal from the Court of
Appeal which dismissed the appellant’s
appeal against the judgment and orders of the
High Court. The background is that the
second respondent obtained a loan from UCB
and they were given a tractor and a trailer
which was attached and the first respondent
sued to recover on the claim that it had been
wrongly attached. The trial court and the court
of appeal dismissed the suit hence this further
appeal on the grounds that the sale and
auction was unlawful, the mode of recovering
the property and the holding that the plaintiff
wasn’t a bonafide purchaser for value.
This case considered whether the appellant had obtained the title of suit property by fraud. The court considered the grounds which would constitute fraud. It was found that fraud means actual fraud or some act of dishonesty. The court held that fraud must be proved strictly, the burden being heavier than on a balance of probabilities generally applied in civil matters. Accordingly, the fraud requires some act of dishonesty.
The court considered whether; the land occupied by the respondent was registered land, the grant of the lease was fraudulent, and estoppel is applicable.
The court held that s 31(1) of the Land Act gives security of tenure to a tenant on registered land. Moreso, the implications of the abolitions of statutory leases in terms of art 237 of the Constitution remains a grey area. The court also held that security of tenure protects a bona fide occupant 's interest. Also, under s 176 of the Registration of Titles Act, a registered proprietor is protected against ejectment except in certain cases including fraud. Further, to procure registration of title to defeat an unregistered interest amounts to fraud. The court also held that registration tainted with fraud does not give rise to the doctrine of estoppel.
The court found that respondent must continue occupation because they were in undisturbed possession and occupation before the 1995 Constitution. The abolition of statutory leases did not automatically extinguish such right. Also found that fraud was attributable to appellants because the grant and registration of suit land in the name of the second appellant was intended to defeat the unregistered interest of the respondent.
Accordingly, the court dismissed the appeal with costs. Further ordered the first appellant to give due consideration to the respondent's application for a lease over the suit land including giving it a priority in the granting of the lease.
A dispute between the company and the bank arose in respect of a specimen signature card allegedly issued for Susan Margaret Howard Bristow (Susan) as a director of the company. The dispute arose because the signature of Dr. Alex Babitunga authenticating Susan's specimen signature card was apparently forged. Additional words written on the card, altering the previous arrangements with the bank requiring two signatures for authorisation of withdrawals, appeared without any initials, signatures, authentication or stamping by the person or persons who cancelled them. The bank permitted certain withdrawals from the company bank account in accordance with the instructions on the card; as opposed to the earlier instructions.
The respondent alleged that the appellant had acted in breach of its duty to the respondent as its customer and had been negligent in permitting the respondent’s accounts to be cleared of all the money in them without the respondent’s authority.
The issues were whether the lower court erred in law and in fact in not holding that the respondent was estopped from saying that Susan Bristow was not an authorized signatory to the respondent's account.
The court explained that the principles of estoppel provides that when one person has, by his or her declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon that belief, neither he or she nor his or her representative shall be allowed, in any suit or proceeding between himself or herself and that person or his or her representative, to deny the truth of that thing. One of the conditions for the doctrine to apply is, therefore that the act or omission by the person against whom estoppel is to be set up, as a defense, must have been intentionally caused, in the instant case the fraud which the two courts below found had caused the appellant to act to its detriment believing it to be true was unknown to the respondent until the police report. The court held that the defense of estoppel was not available to the bank against the company because the respondent was unaware of Susan's fraudulent signatures on the cheques until the police investigation and report.
The court held that all documents concerning the respondent's accounts were in the possession and custody of appellant bank. Only the appellant knew and was responsible for entries on the bank accounts, it bore responsibility as the banker to what entries were made on those accounts without respondent's authority. The appeal was therefore dismissed with costs.
The matter involved a dispute as to whether there was a contract and in effect breach of contract.
The main issue before the court was whether there was a contract for sale of goods and in consequence whether there was breach. Citing trite law that there is no contract if there is no agreement on the essential terms of contract, the court established that the alleged contract did not mention the amounts allegedly guaranteed whilst the demand for payment itself was not linked to the telephone transactions. The court considered the definition of a proforma invoice and concluded the alleged contract was part of negotiations and was therefore an offer to treat. As there was no indication of agreement on the essential terms, there was therefore no contract and consequently no breach of contract.
In obiter, the court also dealt with the question whether special damages were rightfully awarded by the court a quo. Acknowledging special damages as damage in fact caused by wrong and the claim requirements for specificity of pleading and proof, the court concluded that the award of special damages was inconsistent as liability could not be imported on a non-existent contract.
The court thus concluded in favor of the appellant and allowed the appeal.
This appeal raises the question of admissibility of a document that was alleged to be a privileged document. The petitioner sought to have this document admitted as evidence, while the respondent argued that it should be excluded as the security of the state would be impaired.
The petitioner argued that that if this document was excluded, his constitutional right to fair trial would be violated. He further claimed that if the security of the state would be impaired by such conduct. Section 23(2) of the Constitution allows the court to hear the matters that touch on the security of the state, away from the public.
The respondent relied on s 121 of the Evidence Act. He claimed that this document relates to affairs of state and was therefore inadmissible without the consent of the head of department.
This court stated that when an act of Congress conflicts with constitutionally enshrined provisions; the Constitution prevails because it holds the paramount commands. Furthermore, it was held that the court that has the power to determine whether a matter falls within the exceptions or not. In order to do this, the state must produce evidence upon which the court can act. The state never did so.
The court examined the document in dispute and found it to relate to state security. However, the court overruled the respondent’s objection. The document was admitted as evidence in closed court.
The applicant approached the court to set aside the legal opinion and report of the first and second respondents’ respectively and in turn, the respondents challenged the validity of the application before the court.
The court considered whether the applicant was properly incorporated and whether it had locus standi to bring a petition before the court.
It was held that the applicant indeed did not have locus standi to petition the court to challenge the findings of the respondents due to not being properly incorporated.
The court found that the merger between the entities that formed the applicant was in contravention of both the Constitution and legislation regulating companies. The court held that the Constitution was violated on two occasions. Firstly, when an agreement was entered into with an entity controlled by the government without the approval of the Attorney-General. Secondly, when the entity controlled by the government decided to hold a minority shareholding in the company that assisted in incorporating the applicant, which had the effect of parliament not having control of the funds as required. Legislation regulating companies was not complied with since the requirement for incorporating a private company was not observed.
As a result, the preliminary objection raised by the respondents succeeded. The applicant did not exist in law thus it could not sue or be sued. No costs ordered as the applicant does not exist.
The court considered whether the appellant has a right in law to lodge the appeal.
The court held that there is no right of appeal against a decision of a court of competent jurisdiction unless that right is expressly provided for by statute. Further, an application brought to the High Court in terms of s 16(6) of the Arbitration and Conciliation Act is final and not subject to appeal.
The court found that the facts of the subject of the preliminary objection to the arbitrator's decision, the application by the respondent to the high court and the decision thereof fall within the ambit of s 16 of the act, therefore there is no right of appeal against the decision of the high court. Further, even under s 34 of the act there is no right of appeal against the decision of the high court. Further, there was no right to appeal in the high court because respondent did not comply with time limits, thus nullifying the order.
Accordingly, the court found that the appellant had no right of appeal, parties were ordered to pay their own costs. Further, the appellant as the successful party in the arbitration entitled to costs of the high court and arbitrator.
The case was an application seeking to revive a consent judgment set aside by the registrar of the court.
The dispute emanated from an application by the respondent seeking an order to nullify registration of property in the name of the defendants (who are now applicants). The order was granted under an ex parte application because the respondents failed to respond to the suit. The respondents tried without success to appeal the judgment.
The respondents then filed a notice of appeal to the Appeal Court seeking to appeal against the order of the High Court dismissing the application. They also requested an interim order for stay of execution. The applicant (who is now the respondent) objected to the appeal arguing that it was late which was confirmed by the registrar. The respondents referred the matter to a single judge and pending the determination by the judge, the parties entered into a consent judgment which was endorsed by the registrar. The registrar later set aside the consent judgment which the applicants are now seeking to revive.
In deciding the case, the court held that there was no appeal before the single judge because the applicants filed the appeal late. The court ruled that the registrar has no jurisdiction to hear and dispose an appeal. It found that the registrar erred when he entered a consent judgment on a matter which was on appeal before a court. It further ruled that the consent judgment was null and void thus it cannot be revived.
The plaintiff sued the defendant state organ for the balance of payment for construction services rendered in respect of a government-owned school premises. It contended that the defendant had failed to pay the agreed-upon amount timeously; his sum claim was therefore the unpaid balance plus compound interest. The defendant contended that the plaintiff had been paid in full – the principal amount plus simple interest for the period of delay. As the agreement was unwritten, the court had to establish its terms. The determination of the type of interest was integral as the parties had not considered this at the time of contracting.
That the defendant was in breach due to its prolonged delay in effecting payment was quickly established by the court. Considering the nature and purport of contractual damages, it established that compound interest was apposite. Examining the plaintiff’s exhibits of standard industry lending rates sourced from the Bank of Uganda, the court determined the correct rate of interest at 22% p.a. and ruled in favour of the plaintiff. It held further that the award of compound interest sufficiently compensated the plaintiff for its restitutionary and expectation interests, thereby obviating the need for general damages.
Two applications where lodged by both parties. The first application sought the rejection of a lodged case on the ground that the defendant in the suit, described as ‘the board,’ was a non-existing person, with no capacity to sue or be sued. Immediately thereafter, the applicant lodged the second application where he sought leave to amend the initial suit by adding a Pastor Kayanja as a party to the suit, in addition to the board.
In its judgement this court held that the board did not exist in law. The application to add Kayanja was held to be an attempt to substitute a non-existing defendant and thus in reality there was no valid plaint in the suit. The reason being that a suit in the names of a wrong plaintiff or defendant cannot be cured by amendment (as the applicant attempted to).
Hence, the first application succeeded, and the second application was dismissed.
This was an application for an order that a writ of
mandamus doth issue ordering the Treasury
Officer of Accounts to pay the applicants.
When the application came up for hearing, learned
counsel for the respondent, raised an objection.
She argued that under rule 5 (1) of S. I. 11/2007,
an application for judicial review should be made in
a period of three months from the time when the
decision was made. According to her, the
impugned decision was made many years ago, so
the application is out of time.
The plaintiff applied to the court to enter judgment on admission for the plaintiff because the defendant materially admitted all the facts; and that the court should only be addressed on the issue of general damages and costs.
The court concluded that since the defendant in this case agreed to and admitted all the material facts in the plaintiff’s claim, there remained no other triable issues for the court to consider.
A ‘triable issue’ was defined as an issue that only arises when a material proposition of law or fact is affirmed by the one party and denied by the other; however the parties are bound by their pleadings and cannot be allowed to depart from them.
The court held that an admission has to be clear and unambiguous and must state precisely what is being admitted. Once an admission of facts is made, court may upon application make such order or file such judgment.
It is against this backdrop that the judgment on admission was entered.
The background to this application is that the applicant filed against the respondent seeking to recover US$75,000, as payment made in error under a guarantee, interest and costs. The respondent counter-claimed for US$31,767 being the balance owed by the applicant on the guarantee, general damages for breach of the contract of guarantee, interest and costs.
The issue in contention was whether the plaintiff having represented to the defendant that it was entitled to a payment and even made part payment was barred by estoppels from claiming a refund of monies paid to the defendant after the failure of the third-party to make good on its obligations to the plaintiff.
It was held that a court can only exercise the discretion to grant a stay of execution if there are special circumstances and good cause to justify a stay. The inability of the victorious party to be able to refund the decremental amount in the event of a successful appeal is one of such special circumstances if proved.
The court held that the applicant failed to adduce any evidence to show that the respondent will not be able to restore it to the status quo ante if its appeal succeeded. Also, the deponent should have gone a step further to lay the basis upon which the court could make a finding that the applicant would have suffered substantial loss as alleged. The applicant should have gone beyond the vague and generalised assertion of substantial loss in the event a stay order is not granted. It is against this background that the court dismissed the application.
This case involved an allegation that the defendant had not paid fully for services stipulated within an advertising agreement with the plaintiff. This case illustrates the importance interpreting the terms within a contract in line with what the parties to that contract had agreed.
The court held that the court’s duty is to interpret clause 4 of the contract in order to determine what the parties had agreed to. The court had regard to statements of English authority on the interpretation of commercial contracts. In particular,
that ‘[t]here must be ascribed to the words a meaning that would make good commercial sense … and not some meaning imposed … that no businessman in his right senses would be willing to incur.’
The court was satisfied that the according to the terms of the contract, the plaintiff as the ‘landlord’ had provided the defendant as the ‘advertiser’ space for advertising, and undertaken the contested printing activities for its benefit. The court held that the only sensible interpretation of the contract was that the cost of this printing was to be borne by the defendant because the alternative view would lead to a conclusion that ‘flouts common business sense’.
The court ruled that the defendant was supposed to pay the 3.5 million Ugandan shillings for the printing.
The plaintiff’s witness testified that the parties entered into a contract of hire for some construction equipment. The parties agreed that the plaintiff would would hire the equipment for a period of two months for payment .
Before the expected due date for the agreed payment, the defendant sought for a grace period.The plaintiff granted the grace period. However after expiration of the grace period, the cheque from the defendant returned unpaid and marked with the words ‘refer to drawer’. Upon failure to locate the defendant the plaintiff filed suit.
The plaintiff was found to have executed its part of the contract. The defendant’s failure to make funds available on his account constituted a breach of the terms of the contract.
It is trite that special damages must be specifically pleaded and strictly proved. The plaintiff was found to have proven this and thus special damages were awarded. Due to non-payment the plaintiff was denied its expected income and inconvenienced. Hence, general damages were granted. The plaintiff was for this reason further awarded interest on the special damages at the rate of 25% per annum from the date the default of payment arose.
In this case, the court considered the capacity (locus standi) and tests for making an application, under ss 45 and 46 the Trademarks Act.
In this case, the competitors were trading in respect of goods in class 9 (phones and other electronic goods). The court determined whether the applicant (a registered owner of the trademark TECNO in Hong Kong) had the locus standi to challenge registration of the trademark TECNO in Uganda. The court applied the rule that an agent of an owner of a registered mark in a Paris Convention member country had such capacity and held that the applicant had the capacity.
The court observed that the trademarks of the litigants were identical in terms of wording and in respect of the same goods. The court applied the rule that the mere adoption of a mark without bona fide use does not create trademark rights. The court noted that the respondent was using the mark for illegal purposes such as counterfeiting and passing off. Accordingly, the court ordered that the trademark be removed for non–use as per s 46 of the Trademarks Act.
The plaintiff registered its business name as ‘Standard Signs Uganda’, and the defendant incorporated as ‘Shandard Signs (Uganda) Limited’. The court considered whether the defendant had infringed on the plaintiff's trademark, was guilty of passing off and the applicable remedies.
The court held that s 6(1) of the Trade Mark Act grants a registered proprietor exclusive rights of use. The legal basis of passing off is that it is wrong for the defendant to represent for trading purposes that his goods are that of the plaintiff. Also, the plaintiff needs to prove that its business had acquired goodwill. If the defendant is passing off goods, the assumption is that the plaintiff is prevented from selling more goods and damages are a reasonable sum of actual loss.
The court found that the difference was only in the letters ‘t’ and ‘h’; in any event the pronunciation of ‘Standard’/’Shandard’ are similar. The other words in the business names are similar or identical, and the logos are also similar. On this basis, the court concluded that the concurrent use of the two registered trade names and logos are likely to confuse; accordingly they infringe on the plaintiff's trademark. Consequently, the defendant's registration of the name was irregular.
The court concluded that the plaintiff had shown that it had acquired goodwill, therefore, misrepresentation was made out. In that regard, had suffered damages because of erroneous belief endangered by the second defendant's misrepresentation.
The court observed that there was no case against the first defendant under the principle of corporate personality.
The court upheld the plaintiff's complaints and awarded damages, a permanent injunction and costs.
This case involved a memorandum of understanding that was departed from orally by both parties. This case illustrates how an oral variation leaves the written contract enforceable.
The court considered three issues, whether there was a valid contract, whether the counter-defendant had breached the contract, and if the counterclaimant is entitled to the remedies available.
The court held that the burden of proving misrepresentation rests on the party alleging it. Secondly, a breach of a contract arises when a party to a contract fails to meet its contractual obligation. However, where a party waives its rights, it cannot claim damages for breach on the same contract. Lastly, the court held that a party must take all reasonable steps to mitigate loss following a breach.
The court was satisfied that there was no proof of misrepresentation on the part of the counterclaimant. The court found that though there was breach of the contract by the counter-defendant, the counter-claimant had waived its rights and could not claim damages for breach on the same contract. The court was satisfied that the counter-claimant did not mitigate its loss and was therefore not entitled to any special damages.
This case looked at the whether the veil of incorporation could be lifted and the defendants held liable for the debt of the company as a result of their alleged fraudulent dealings.
The court considered that when the device of incorporation is used for some illegal or improper purpose, the court may disregard the principle that a company is an independent legal entity and lift the veil of corporate identity. A corporate personality can never be used as a cloak or a mask for fraud. The veil of incorporation will be lifted where it is proved that the company is being misused by its directors to perpetuate fraud.
The standard of proof in fraud cases requires a higher degree of probability than the proof required to demonstrate negligence.
The applicant failed to adequately plead the allegation of fraud. Accordingly, the veil of incorporation could not be lifted. The case was dismissed with costs.