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Mota Engil Engenharia E Construcao Africa Sa v Ashland Motors Africa Limited (Civil Suit No. 1183 of 2023)

High Court · [2026] UGCOMMC 268 · 2026 Judgment for Plaintiff ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and unjust enrichment
Decision
Judgment entered for the Plaintiff with orders for refund of deposit, general damages, interest, and costs

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Holding

The court held that the defendant breached the contract by failing to deliver five motor vehicles within the agreed timeframe of 10-12 weeks and failing to refund the deposit after establishing delivery could not be made. The plaintiff's demand for a refund following the defendant's failure to fulfill its obligations did not constitute cancellation of the contract. The defendant was ordered to refund the deposit of USD 123,777.50 plus general damages.

Facts

On 6 January 2022, the plaintiff contracted the defendant for the supply of five brand-new Volkswagen T6 Double Cabin motor vehicles at USD 247,555, with delivery within 10-12 weeks. The plaintiff paid a 50% deposit of USD 123,777.50 on 14 March 2022. The defendant failed to deliver the vehicles by the agreed deadline of end of May 2022. The defendant attributed delays to COVID-19 pandemic effects on global production and later indicated delivery would only occur after June 2023. Despite multiple email exchanges, a meeting on 7 December 2022, and promises of alternative solutions, the defendant neither delivered the vehicles nor refunded the deposit. The plaintiff demanded a refund on 29 August 2022 after the defendant failed to provide promised alternative solutions.

Issues

  1. Whether the Defendant breached the contract between it and the Plaintiff?
  2. What remedies are available to the parties?

Orders

  • It is hereby declared that the Defendant breached the contract between it and the Plaintiff.
  • The Defendant shall pay the Plaintiff USD 123,777.50 (United States Dollars One Hundred Twenty-Three Thousand Seven Hundred Seventy-Seven and Fifty Cents), being the initial deposit received by the Defendant for the supply of five brand new G Volkswagen T6 Double Cabin motor vehicles.
  • The Plaintiff is awarded general damages of UGX 45,000,000/= (Uganda Shillings Forty-Five Million Only).
  • Interest is awarded on the sum in (2) above at the rate of 20% per annum from the date of filing the suit until payment in full.
  • Interest is awarded on the general damages in (3) above at the rate of 6% per annum from the date of Judgment until payment in full.
  • Costs of the suit are awarded to the Plaintiff.

Key headnotes

Contract Law — Breach of Contract — Failure to Deliver Goods Within Agreed Timeframe
Failure to deliver contracted goods within the agreed timeframe constitutes a fundamental breach of contract entitling the innocent party to treat the contract as repudiated.
Contract Law — Cancellation Clauses — Forfeiture of Deposit — Applicability Where Supplier Breaches
A contractual clause providing for forfeiture of deposit upon cancellation by the purchaser does not apply where the purchaser demands a refund following the supplier's failure to fulfill its delivery obligations under the contract.
Contract Law — Restitution — Recovery of Money Paid Where Consideration Fails
A claimant is entitled to recover money paid to a defendant where the consideration for which the money was paid has wholly failed, such as where goods contracted for are never delivered.
Contract Law — General Damages — Assessment — Financial Loss and Inconvenience
In assessing general damages for breach of contract, courts consider the value of the subject matter, the economic inconvenience suffered by the innocent party, and the nature and extent of the breach, with damages being compensatory in nature to place the injured party in the position they would have been had the breach not occurred.
Contract Law — Interest on Damages — Rate Determination — Business Entities
Where a defendant wrongfully retains money belonging to a business entity plaintiff and refuses to refund it after failing to perform contractual obligations, the court may award interest at a rate that compensates for the deprivation of the use of money in business operations, taking into account inflation and currency depreciation.

Legislation cited (9)

  • Evidence Act Cap. 8 s.101
  • Evidence Act Cap. 8 s.102
  • Evidence Act Cap. 8 s.103
  • Evidence Act Cap. 8 s.104
  • Contracts Act Cap. 284 s.9(1)
  • Contracts Act Cap. 284 s.32
  • Civil Procedure Act Cap. 282 s.26
  • Civil Procedure Act Cap. 282 s.27(2)
  • Civil Procedure Rules Order 15 rule 5(1)

Cases cited (17)

  • Oriental Insurance Brokers Limited v Transocean (U) Limited (Supreme Court Civil Appeal No. 55 of 1995)
  • Media Airtime Ltd v Uganda Broadcasting Corporation (High Court Civil Suit No. 752 of 2008)
  • John Bwiza v Patrick Yowasi Kadama (Court of Appeal Civil Appeal No. 35 of 2011)
  • Sharif Osman v Haji Haruna Mulangwa (Supreme Court Civil Appeal No. 38 of 1995)
  • William Kasozi v DFCU Bank Ltd (High Court Civil Suit No. 1326 of 2000)
  • Meridiana Africa Airlines (U) Ltd v Avmax Spares (EA) Ltd (High Court Civil Suit No. 111 of 2017)
  • Omega Bank Plc Vs O.B.C Limited [2005] 8 NWLR (pt.928) 547
  • Fina Bank Ltd Vs Spares and Industries Ltd [2000] 1 EA 52
  • Sokowatch SMC Limited v Dikan Distributors Limited (High Court Civil Suit No. 47 of 2024)
  • Stanbic Bank Uganda Limited v Akeem Badiru (High Court Civil Suit No. 682 of 2018)
  • Kabandize John Baptist and 21 Others v Kampala Capital City Authority (Court of Appeal Civil Appeal No. 36 of 2016)
  • Takiya Kashwahiri & Another v Kajungu Denis (Court of Appeal Civil Appeal No. 85 of 2011)
  • Uganda Commercial Bank Vs Deo Kigozi [2002] 1 EA 305
  • Milly Masembe v Sugar Corporation (U) Ltd and Another (Supreme Court Civil Appeal No. 1 of 2000)
  • Wallersteiner Vs Moir [1975] 1 All ER 849
  • Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd (High Court Civil Suit No. 224 of 2011)
  • Uganda Development Bank Vs Muganga Construction Co. Ltd [1981] HCB 35
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.