Wakilii

Ambitious Construction Company Ltd v Uganda Broadcasting Corporation (Civil Suit No. 335 of 2012)

High Court · [2017] UGCOMMC 46 · 2017 Judgment for Plaintiff — Counterclaim Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of sums due under construction contract, with counterclaim for liquidated and general damages for breach of contract
Decision
Judgment entered for plaintiff contractor with recovery of certified sums plus interest; defendant's counterclaim dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division held that a deed of variation increasing a construction contract price by 13.8% was not illegal for want of Attorney General approval where the original contract permitted variations up to 15% and had been approved. The plaintiff contractor was entitled to payment of certified sums totalling UGX 749,884,386 with interest at 19% per annum. The defendant's counterclaim for liquidated damages for delay and defective work was dismissed.

Outcome

Judgment entered for plaintiff contractor with recovery of certified sums plus interest; defendant's counterclaim dismissed

Facts

The defendant contracted the plaintiff in March 2009 to construct a television complex for UGX 2,541,809,819. In December 2010 the parties executed a deed of variation for additional works worth UGX 350,031,602, increasing the contract price to UGX 2,891,841,421. The plaintiff completed the works and the project manager issued certificates for payment. The defendant refused to pay three sums: interim certificate No.8R for UGX 354,430,881, a final certificate for UGX 349,997,760, and retention money of UGX 45,455,745. The defendant argued the variation deed was illegal for lack of Attorney General approval and counterclaimed for liquidated damages alleging the plaintiff completed 355 days late and delivered defective work.

Issues

  1. Whether the deed of variation is void for illegality?
  2. Whether or not the Plaintiff breached the contract?
  3. Whether the Plaintiff is entitled to the remedies sought under the main suit?
  4. Whether the Defendant is entitled to the remedies sought under the counterclaim?

Orders

  • Preliminary objection on the ground of illegality overruled with costs.
  • Plaintiff awarded UGX 749,884,386 being money due and owing.
  • Interest awarded at 19% per annum from date suit was filed to date of judgment.
  • Further interest awarded at 19% per annum from date of judgment until payment in full.
  • Plaintiff's suit succeeds with costs.
  • Defendant's counterclaim dismissed with costs.

Rules and key headnotes

Contract Variation — Distinction from Amendment — Attorney General Approval
A variation order changing the scope or price of a government contract within limits expressly permitted in the principal contract approved by the Attorney General does not constitute an amendment requiring fresh Attorney General approval under Article 119(5) of the Constitution. A variation is an order made within the main contract to adapt to unanticipated events or changes in requirements, whereas an amendment changes the terms and conditions of the awarded contract itself.
Construction Contracts — Variation Provisions — Project Manager Authority
Where a construction contract permits the project manager to order variations and adjust the contract price within a specified percentage limit without prior employer approval, variations executed within that limit bind the parties and do not require separate procurement procedures or Attorney General consent. The Attorney General's approval of the principal contract encompasses advance approval of variations within the contractual parameters.
Public Procurement — PPDA Regulations — Variation vs Amendment
Regulation 261 of the PPDA Regulations 2003 permits contract variations to be issued with contracts committee approval where the contract provides for such variations and defines the competent officer authorised to make them. A contract variation within the limits prescribed in the principal contract and authorised by the designated competent officer complies with the PPDA regime and does not require the procedures prescribed for contract amendments under Regulation 262.
Construction Contracts — Extension of Time — Project Manager Discretion
Where a construction contract empowers the project manager to extend the intended completion date if a variation makes it impossible for timely completion without the contractor incurring additional acceleration costs, the project manager's grant of extensions within those contractual powers releases the contractor from liability for delay. A contractor is not required to verify that the project manager obtained employer approval for extensions where the contract places that duty on the project manager.
Hearsay Evidence — Management Meeting Reports
Evidence of a statement made to a witness by a person not called as a witness is hearsay and inadmissible when the object is to establish the truth of what is contained in the statement. Testimony that a procurement officer reported non-compliance with PPDA procedures in a management meeting is hearsay where the witness did not participate in the review and the procurement officer was not called to testify.
Damages — Interest as Compensation for Detention of Money — Restitutio in Integrum
Interest on money wrongfully withheld is not punitive but part of the attempt to achieve restitutio in integrum. In commercial cases interest is intended to reflect the rate at which the plaintiff would have had to borrow money to supply the place of that which was withheld. A claim for general damages together with interest on the same sum is duplicative where interest adequately compensates for detention of money.

Legislation cited (11)

Cases cited (14)

  • Central Purchasing Corporation Limited v Hon. Maj. Gen. (Rtd) Kahinda Otafiire (HCCS No. 627 of 2003)
  • Finishing Touches Limited v Attorney General (HCCS No. 144 of 2010)
  • Setramaco International Limited v Board of Directors/Head Teacher Lubiri Secondary School and Another (HCCS No. 478 of 2005)
  • Bank of Uganda v Banco Arabe Espanol (SCCA No. 1 of 2001)
  • Nsimbe Holdings Limited v Attorney General and IGG (Constitutional Petition No. 2 of 2006)
  • Makula International Limited v Cardinal Nsubuga (Civil Appeal No. 4 of 1981)
  • Kisugu Quarries Limited v Administrator General [1999] 1 EA 163
  • Active Automobile Spares Ltd v Crane Bank Limited and Rajesh Pakesh (Civil Appeal No. 21 of 2001)
  • Scott v Brown Doering (1892) 2 QBD 724
  • Equator Touring Services Ltd v KCC (HCCS No. 763 of 2007 and 278 of 2010)
  • Uganda v Abdallah Nasur 1982 HCB 1
  • Dharamshi v Karsan [1974] 1 EA 41
  • Tate & Lyle Food and Distribution Ltd v Greater London Council and another [1981] 3 All ER 716
  • Riches v Westminster Bank Ltd [1947] 1 All ER 469 HL

Full judgment

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Ambitious Construction Company Ltd v Uganda Broadcasting Corporation (Civil Suit No. 335 of 2012) [2017] UGCommC 46 (19 May 2017)
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.