Wakilii

Eladam Enterprises Ltd v Societe Generale De Surveillance and 2 Others [2007] UGSC 20

Supreme Court · 2007 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second appeal from the Court of Appeal in a civil suit for breach of contract and breach of statutory duty
Decision
Appeal dismissed; the Court of Appeal's decision reversing the High Court award and dismissing the appellant's claim was upheld

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Holding

The Supreme Court dismissed the importer's second appeal. The respondents acted only as the statutory Inspecting Authority under the Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982, not as sellers, so they could be liable only for breach of statutory duty, and the Sale of Goods Act governed only the appellant's separate contract with its Kenyan supplier. The appellant accepted goods it knew to be defective and accepted a consignment without a Clean Report of Findings, breaching its own statutory obligations; it failed to establish any breach by the respondents. Because liability against the respondents was not established, no claim for damages could arise. The Court of Appeal had adequately re-evaluated the evidence.

Facts

In 1995 the appellant won a tender to supply army uniforms to the Ministry of Defence and contracted M/s Rift Valley Textiles Ltd (Rivatex) of Kenya to supply suiting fabric worth US$168,000. Under the Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982, imports exceeding US$10,000 had to be inspected by the appointed Inspecting Authority, the third respondent, of which the first and second respondents were subsidiaries. The appellant paid the inspection fees. The inspecting authority carried out inspections, found defects in some fabrics, and notified the appellant, who decided to accept fabrics with defects up to 4% and confirmed this in writing. One consignment was imported and accepted without a Pre-shipment Inspection Certificate, leading to a Uganda Revenue Authority penalty. The appellant made uniforms from the defective fabrics, some of which the Ministry rejected. The appellant sued the respondents for special and general damages alleging failure to inspect properly. It never sued the supplier, Rivatex.

Issues

  1. Whether the Court of Appeal erred in applying the Sale of Goods Act to the transaction between the appellant and the respondents.
  2. Whether the appellant was entitled to an award of damages against the respondents.
  3. Whether the Court of Appeal failed in its duty to re-evaluate the evidence.

Orders

  • Appeal dismissed with costs to the respondents in the Supreme Court and in the two courts below.

Key headnotes

Pre-shipment Inspection Regulations — Obligations of Importer — Compliance as Precondition to Claim
An importer must first show that it has complied with its own statutory obligations regarding the inspection of goods before it can lay claim against the Inspecting Authority; an importer who by-passes the regulations by accepting or paying for un-inspected goods is itself in breach of the law.
Sale of Goods Act — Relationship with Statutory Inspection Duty — Remedy Against Seller
The pre-shipment inspection regulations do not relieve a seller of its contractual obligations to the buyer; the Sale of Goods Act governs the buyer-seller relationship, and a buyer's remedy in damages for defective goods lies against the seller, not against the inspecting authority.
Breach of Statutory Duty — Inspecting Authority — Scope of Liability
An inspecting authority appointed under the pre-shipment inspection regulations acts only under a statutory duty to inspect and can be sued only for breach of that statutory duty; it is not the seller or supplier of the goods and cannot be held liable as such.
Damages — Liability as Precondition — No Damages Without Established Breach
Damages flow from established liability, whether in contract or in breach of statutory duty; where a claimant fails to establish that the defendant was liable, no claim for damages can arise.
Cross-Examination — Unchallenged Evidence-in-Chief — Scope of the Inference
The principle that an omission to challenge evidence-in-chief by cross-examination leads to an inference that the evidence is accepted applies only to evidence-in-chief and remains subject to that evidence being assailed as inherently incredible; it does not assist a party whose own evidence shows it accepted defective goods.
First Appellate Court — Duty to Re-evaluate Evidence
A first appellate court discharges its duty to re-evaluate the evidence where it reviews the material testimony and arrives at a conclusion supported by that evidence; it is not required to itemise the credibility of every witness.

Legislation cited (9)

  • Sale of Goods Act s.34
  • Sale of Goods Act s.52
  • Sale of Goods Act s.55
  • Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982 (SI 1982 No.90) reg.1
  • Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982 (SI 1982 No.90) reg.3
  • Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982 (SI 1982 No.90) reg.4
  • Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982 (SI 1982 No.90) reg.5
  • Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982 (SI 1982 No.90) reg.6
  • Bank of Uganda (Pre-shipment Inspection of Imports) Regulations 1982 (SI 1982 No.90) reg.9

Cases cited (1)

  • Habre International Co. Ltd v Kasam and Others [1999] 1 EA 115
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.