M.T.N (U) Ltd v Uganda Telecom Ltd. (Civil Appeal 13 of 2004)
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Holding
The dispute concerned the date from which contractual interest on an agreed principal debt under an interconnection agreement began to accrue. The Supreme Court held that the agreement must be construed as written, and that the issuing and receipt of an invoice was a condition precedent to payment. Because no amount falls due until an invoice specifying the net amount is received, the due date — and therefore the date interest begins to accrue — is the date the invoice is received, not an earlier date tied to receipt of traffic reports. The appeal was dismissed, the respondent being liable for interest of Shs. 200,552,609 with interest at court rate from judgment, costs to the respondent.
Facts
The appellant and respondent are telecommunications operators party to an interconnection agreement under which each charges the other for interconnection services. The appellant sued to recover a principal sum of Shs. 5,772,690,167 together with interest of Shs. 518,455,167 said to have accrued from the date the principal fell due. The parties agreed on the principal sum, and judgment for it was entered by consent. They did not agree on the amount of interest, which turned on the date interest began to accrue. The trial judge awarded interest of Shs. 518,455,167; the respondent contended the correct figure was Shs. 200,552,609. Under Article 7 of the agreement, each party reports amounts due monthly, the receiving party has 15 days to reconcile, accept or refuse traffic, and an invoice is issued upon acceptance of the reconciliation. Article 7.1.3 provides that payments not made by the due date bear interest at 10% per annum from the due date until payment.
Issues
- On what date did the respondent's liability to pay interest on the agreed principal debt arise, and from what date did interest begin to accrue under the parties' interconnection agreement?
Orders
- Appeal dismissed with costs to the respondent here and in the courts below.
- Respondent liable to pay the appellant Shs. 200,552,609 with interest at court rate from the date of judgment until payment in full.
- Taxation of costs to be based solely on the interest sum that was in dispute.
Key headnotes
Legislation cited (1)
- Uganda Communications Act, Cap. 106
Cases cited (1)
- Stirnlaw v. Southern Foundaries (1926) Ltd and another (1939) Acc.E.R.113