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 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.
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.
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.
The plaintiff filed an action against the defendant for breach of contract, special damages, general damages, interest and costs of the suit. The two issues were whether there was a legally binding contract for decorating services between the plaintiff and the defendant and whether the plaintiff is entitled to the remedies claimed.
It was submitted that under s 55 of the Public Procurement and Disposal of Public Assets Act 2003 (PPDA or the act) all public procurement has to be carried out in accordance with the rules set out in the act and regulations and guidelines made under the act. The court held that there was non-compliance with the PPDA regulations on procurement of services.
The court stated that the act was established to ensure the application of fair, competitive, transparent, non-discriminatory and value for money procurement and disposal standards and practices. Although there was non-compliance with established procedures as set out above, the contracts committee subsequently agreed with the methodology chosen albeit after the event. They ratified the process.
The court went on to decide that on the first issue thereof of whether there was a legally binding contract for decorating services between the plaintiff and the defendant, that the permanent secretary upon clearance by the Contracts Committee was under obligation to retrospectively regularise the procurement of the services of the plaintiff representing a consortium of companies which carried out decorations. The failure to regularise the procurement of the services of the plaintiff worked injustice because the plaintiffs remained unpaid for services procured and which had been cleared by the Contracts Committee.
The plaintiff was the registered proprietor for ‘Marie Classic Biscuits’. The defendant also sold biscuits, under the name ‘Aya Marie Biscuits’. The court considered whether the get-up of the defendant's product was similar to that of the plaintiff, whether it was likely to confuse average consumers, if there has been a passing off; and if so what remedies were applicable.
The court outlined the test for confusion about the get-up as concerning the perceptions of an average customer.
To establish ‘passing off’ the plaintiff must prove goodwill, misrepresentation and damage. Goodwill is the attractive force attached to the name, get-up or logo which brings in custom.
Misrepresentation is a false description made consciously or unconsciously by the defendant. Motive is not necessary. The onus for damages lies with the plaintiff; it must be proved that there was damage to goodwill.
The court found that the defendant’s get-up is similar to the plaintiff’s, the bulk of consumers identify the plaintiff's goods with the general impression of the red colour; in that light the plaintiff's goodwill is eroded. The court held that the red colour is not uniform for Marie biscuits around the world and therefore is not sufficient to satisfy the test of misrepresentation. The court also found that the plaintiff failed to prove actual damage to goodwill.
The court upheld the plaintiff's complaints and ordered an injunction to avoid the possibility of the defendant to reintroduce the products, and costs.
Each of the parties accused the other of breach of contract. The plaintiff alleged breach in terms of non-payment for services conducted. The defendant counter-claimed breach in terms of failure to comply with the set completion time and providing substandard quality work.
The defendant also contended that should it be found liable, it should be indemnified by a third party as it has been negligent in doing its work.This court held that the defendant is not entitled to indemnity or any contribution from the third party.
The court found that there was no breach of contract by the plaintiff in so far as completion time is concerned. The defendant waived the right to complain about completion time and was estopped from raising the issue. The defendant was found to not be entitled to monies claimed in the counterclaim, as there was no basis for it and this court had already held that the defendant waived its rights.
The plaintiff was found to be entitled to the monies reflected on two certificates. The plaintiff was not awarded the contractual interest claimed because the court held that the the defendant was justified in not paying contractual interest for an erroneously issued certificate.
Following its non-payment for construction services rendered, the plaintiff sued the defendant for breach of contract. A counter-claim was lodged alleging that the plaintiff breached the parties’ agreement through a significant delay in performance and sub-standard discharge of its obligations. Insofar as the third party had issued unqualified certificates of completion for the plaintiff’s/counter-defendant’s alleged malperformance, the defendant/counter-claimant contended that it was negligent and therefore liable for a degree of indemnification.
The defendant/counter-claimant was found to have impliedly waived its right to liquidated damages for late performance and consequently estopped from enforcing it. The court found further that the plaintiff’s/counter-defendant’s performance, while flawed in some respects, was not materially defective. The issuing of a certificate of completion marks the close of liquidated damages liability and commences the period of defects liability, where errors in performance are identified and submitted to the contract debtor for rectification. Failure to rectify does not give a right to sue for breach but rather gives the employer the right to refuse to release retention monies.
The third party was found to have conducted its work competently, barring one erroneously issued certificate, and was under no obligation to indemnify the defendant. The defendant was therefore indebted to the plaintiff for the outstanding amounts stipulated by the lawfully issued certificates. Because the defendant had accepted and made use of the plaintiff’s performance, despite the erroneously issued certificate of completion, the court found that it was liable to compensate the latter under the law of unjustified enrichment. Judgment was entered for the plaintiff with costs.
The matter dealt with an application for foreclosure and sale of mortgaged property as a result of failure to make loan repayments by defendant.
The main issue was whether the plaintiff could exercise its right to foreclose the property. The court cited s 8(1) of the Mortgage Act that allows one to redeem the property at any time of breach and or to get a court order effecting the redemption. Reference to How v Vigures was also made regarding the triggers for foreclosure proceedings as being when due payment has not been made on date for redemption (default) or when there is a breach of any terms of the mortgage.
The court established that as the defendant had not complied with the terms of the credit facility agreement by not paying the agreed monthly instalments for a period of two years despite repeated demands, the exercise of the right to foreclosure was held to be fit and proper.
The court therefore concluded that the plaintiff could exercise the right to foreclose and accordingly allowed the application.
In this case the plaintiff had lost valuable equipment through acts of incendiarism and sought indemnity since this had happened over 100 days into the life of the insurance policy. This case illustrates how parties are bound to their own undertakings in a contract for insurance premiums.
The court considered whether the plaintiff was entitled to indemnity under the Contractor Plant and Machinery Policy. The court considered the parole evidence rule and held that the defendant had to meet its obligations under the insurance policy. The policy insurance was clear on what it covered and thus the defendant could not invoke the parole evidence to show what the insurance policy intentions were or not. The court held that it could only enforce the insurance policy as it was.
The court also considered whether the plaintiff’s claim was fraudulent. It held that the plaintiff’s claim under the insurance policy was legitimate, as it had been proven that it possessed a valid insurance policy issued by the defendant. Thus in the absence of proof of fraud by the defendant, obligations under the insurance policy had to be met.
The court concluded that there was no fraud and thus the plaintiff was to be indemnified. The court upheld the claim and awarded damages in favour of the plaintiff.
A dispute arose between the appellant and the respondent regarding the amount payable for extra costs incurred during the delivery of goods by sea. The case was first heard by the high court, then the magistrates court where it was dismissed based on jurisdiction.
The court had to consider whether Ugandan courts had jurisdiction to hear the matter and whether the magistrate erred in law and fact when he dismissed the appellant’s counterclaim before hearing it.
It was held that Ugandan courts had jurisdiction to try the matter and that the magistrate erred in law and fact when he dismissed the appellant’s counterclaim without hearing it.
With reliance on the bill of lading, legislation and past cases, the court was of the view that the parties had voluntarily submitted themselves to the jurisdiction of Ugandan courts. In addition, the court stated that the Ugandan courts were readily available to adjudicate on the matter and it was convenient to bring the matter before Ugandan courts. Furthermore, the court issued that the magistrate ought to have considered the Constitution and civil procedure rules prior to dismissing the appellant’s counterclaim without hearing the merits.
The court ordered a new trial in the magistrate’s court. The appeal was allowed, and costs were awarded in favour of the appellant.
The plaintiff sought relief from the court for alleged breach of contract said to have been committed by the defendant. The alleged breach was on the basis that the defendant had renewed a contract the parties had entered into and breached the contract by awarding a tender to another bidder.
In considering whether there was a breach of contract, the court essentially had to decide whether the contract between the parties was renewed.
The court held that the contract was not renewed, thus no breach of contract had taken place.
The court examined the clauses of the contract that was entered into along with legislation that provides guidance regarding procurement in local government in reaching its decision. From the above instruments, the court stated that for renewal to take place, it would have to be in accordance with clause 17.1.1 of the contract and through legislation.
Seeing that that was not the case, the court stated that there was only an oral understanding between the parties to continue working together even after the contract between them had expired.
The suit by the plaintiff was dismissed with costs. Since there was no breach of contract, no remedies were available to the plaintiff.
The plaintiff company brought a suit against the defendant school and its deputy headmaster for breach of contract stating that the defendants failed to pay for services rendered by the plaintiff.
There were two issues before the court: whether there was a valid contract between the parties and whether the plaintiff carried out their services in accordance with local purchase orders 1941 and 1942.
The court held that there was a valid contract between the parties. It was also held that in rendering services, the plaintiff did not supply and install certain items in accordance with local purchase orders 1941 and 1942.
Regarding the validity of the contract, the court found that the second defendant had apparent authority to sign the local purchase orders meaning the contract was valid and that there was no express provision in the legislation stating that non-compliance vitiates legality of contract. In addition, the court found that the first defendant accepted the goods when they were delivered to it and had to pay accordingly.
The court’s judgement relied on a report by the Ugandan National Bureau of Standards which found that some of the items installed by the plaintiff were substandard.
The court awarded the plaintiff Shs 216,000 for delivery of goods and Shs 84,000 for general damages. In addition, the court awarded the plaintiff interest on the above amounts until payment was made in full.
The plaintiff entered into a loan agreement with the respondent. The plaintiff averred that the defendant had neglected and failed to pay the stipulated monthly installments and was therefore in breach of the loan agreement. The defendant however denied the claim and averred that she has never applied for any loan from the plaintiff but contended that her former employer and its directors applied for staff loans from the plaintiff.
The agreed issues however were whether there was a valid loan agreement between the parties; whether the second to fifth counter defendants were parties to the loan agreement; whether the first to fifth counter defendants jointly and severally misrepresented the contents and effect of the loan agreement and whether there is liability to pay the debt claimed by the plaintiff and what remedies are available to the parties.
The court found that there was a debt to be paid since the plaintiff and the defendant entered into a contract which is binding on both parties; the defendant was liable to pay the debt. Since the defendant signed the loan agreement personally with the plaintiff, she was to pay the money she owed them. However, since the second, third, fourth and fifth counter defendants misrepresented to the defendant the terms and contents of the loan agreement they were found liable in this respect and ordered to pay the defendant the equivalent of the principal sum which the defendant owed to the plaintiff.
In this case the defendant raised a preliminary objection to the suit on grounds that the suit is time barred and that the High Court of Uganda has no jurisdiction to try the suit. The court stated that it could not decide on the issue of time until it makes a determination on whether it could exercise its jurisdiction in the matter. The court relied on article 139 of the Constitution and the rule that a contract cannot oust the jurisdiction of the high court and held that a clause to submit to the exclusive jurisdiction of the foreign court is enforceable by the High Court. However, the court stated that the jurisdiction of the court in such circumstances is subject to the plaintiff justifying the filing of the action in Uganda, for instance by proving that the defendant was using the exclusive jurisdiction clause to avoid liability. The court was satisfied that the plaintiff in this case had failed to do so. Accordingly, the court enforced the terms of the contract, sustained the preliminary objection and dismissed the suit with costs.
This case considered the instance when the veil of incorporation can be lifted. The mind of a company where guilty intent or responsibility is being considered cannot be separated from the minds of the directors. The corporate veil ought to be lifted where there is proof of involvement of the directors in fraud. Once there has been an allegation of fraud against the company, the directors are ay virtue alleged to be involved. Accordingly, the veil of incorporation will be lifted where it is proved that the directors, acting as the mind and body of the company were involved in an act of dishonesty.
Copyright – Infringement of intellectual property rights
Trademark – Fraudulent registration of foreign trademark in Uganda
The plaintiff sued the defendant for breach of contract following its failure to pay in full – inclusive of VAT and penalties accruing from delayed payment – for construction services rendered. Two clear issues arose: whether the plaintiff was entitled to the sum claim and what remedies were available to the litigants. The contract provided for specific procedures in the event of disputes between its signatories. The plaintiff’s grievances with the project manager’s final certificate (which confirmed the amount owing by the defendant) ought to have been aired via these channels, so the defendant could be alerted thereto.
Because timeous and effective payment was based on certificates, the court found that the defendant could not be held liable for non-payment exceeding the certified amount. The court accordingly reduced the sum claim. Because the defendant had hampered the plaintiff’s commercial endeavours through its breach, it stood liable for general damages. The plaintiff provided no elucidation on the quantum thereof, and so its determination fell to the court’s discretion.
The applicants sought a temporary injunction against the respondents implementing or enforcing regulations 3(1), 4(4), 20(1), and 20(2) of the National Council of Sports Regulations until the disposal of related litigation. The applicants sought to prevent the implementation of the regulations on the grounds that they were the result of illegal, irrational and unconstitutional action on the part of the Minister of Sports. Implementation of the regulations, it was contended, would irreparably affect the operations and fundamental rights of National Sports Associations.
The court set out the requirements for an injunction: unless granted, the damage occasioned would be such that an award of damages would not adequately compensate the applicant; the applicant must show that their case has a probability of success; if the court is in doubt, the application will be decided on the balance of convenience; and the applicant must prove that the aim of the injunction is to maintain the status quo until the determination of the whole dispute.
Whether there was a prima facie case with a probability of success, the court held that it must be satisfied the claim is not frivolous or vexatious, and that there is a serious question to be tried. The court found that this ground was met.
As regards the grounds of irreparable damages, the court held that the applicants succeeded on this ground. In terms of the requirement of balance of convenience, the term meant that if the risk of doing an injustice is going to cause the applicant to suffer, then the balance of convenience favours them to be granted the application. The court held that the applicant met their case and allowed the application on this ground. The applicant was granted the temporary injunction.
The plaintiff sought a permanent injunction against the defendant to prevent it from selling, offering for sale, or dealing in goods bearing the plaintiff’s registered trademark.
The court considered whether the defendant infringed the plaintiff’s registered trademark and whether the defendant was a bona fide user of the trademark. The court also considered whether the defendant had locus standi (standing) to challenge the registration of the plaintiff’s trademark.
Held, the defendant did not have locus standi to challenge the plaintiff’s trademark registration. Held, although the defendant was a trader, it could not claim innocence by virtue of advertising the plaintiff’s trademarks. The court stated that points of law had to be argued and evidence adduced by the plaintiff in so far as infringement is concerned in order for final judgement to be granted.
The court extensively examined existing trademark legislation and decided cases and concluded that the defendant did not have locus standi to challenge the plaintiff’s registration as the plaintiff enjoyed statutory protection due to registering its mark in Uganda first.
Interim injunction granted in favour of the plaintiff until the trial.