Wakilii

Boschcon Civil & Electrical Construction Co (U) Ltd v Salini Construttori SPA (Civil Suit No. 151 of 2008)

High Court · [2012] UGCOMMC 133 · 2012 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract with counterclaim
Decision
Plaintiff's main suit largely succeeded with damages awarded and equipment ordered returned. Defendant's counterclaim partly succeeded for materials supplied. Counterclaim amount to be offset from plaintiff's total award.

Observed later treatment

Cited — treatment unverified cited in 2 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 2 times with no adverse treatment recorded; not yet tested on the merits. Citations fading — 3 citing cases on record, 3 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The court held that the defendant wrongfully terminated the subcontracts. The defendant misrepresented its VAT status by indicating the contract sum was plus VAT but later claiming exemption, causing financial strain to the plaintiff. The defendant caused delays through withholding payments, delayed supplies, and unresolved VAT and store supply issues. The termination was unjustified and the plaintiff was awarded UGX 572,287,907 in total damages and interest, with equipment returned. The defendant succeeded partly on counterclaim for materials supplied worth UGX 273,450,449, which was offset against plaintiff's award.

Outcome

Plaintiff's main suit largely succeeded with damages awarded and equipment ordered returned. Defendant's counterclaim partly succeeded for materials supplied. Counterclaim amount to be offset from plaintiff's total award.

Facts

Boschcon was subcontracted by Salini to construct residential camp houses at Bujagali Hydroelectricity Plant under two separate agreements signed in July and October 2007. The letter of intent stated the contract sum was plus VAT, but the final subcontracts were silent on VAT. After commencement, the plaintiff incurred VAT on purchases totaling UGX 100,224,441 but Salini rejected refund claims stating it was VAT exempt under the VAT Amendment Act 2007. Disputes arose over store supplies reconciliation and withheld payments on certificates. Delays occurred and revised programmes were requested. On 16 May 2008, Boschcon declared a dispute and suspended work citing unresolved store supply issues and inability to continue without materials. Salini terminated the contract the next day citing unilateral suspension and delay. Boschcon's officers and equipment were removed from site with armed guards. Salini completed the works using Boschcon's materials left on site.

Issues

  1. Whether the termination of the contract by the defendant was lawful.
  2. Whether there was misrepresentation by the defendant regarding VAT obligations.
  3. Whether there was misrepresentation by the plaintiff regarding its financial status.
  4. Who caused the delay in completing the contract.
  5. Whether the plaintiff is entitled to special and general damages.
  6. Whether the defendant is entitled to the counterclaim for special and general damages.

Orders

  • Judgment entered for the plaintiff in the main suit.
  • Defendant to pay plaintiff UGX 100,224,441 being unpaid VAT refund.
  • Defendant to pay plaintiff UGX 172,063,466 being outstanding payments on certificates.
  • Defendant to pay plaintiff UGX 300,000,000 as general damages for unlawful termination.
  • Interest at 25% per annum on special damages from date of filing suit till payment in full.
  • Interest at 21% per annum on general damages from date of judgment till payment in full.
  • Plaintiff awarded 80% of taxed bill of costs.
  • Defendant to return plaintiff's construction equipment and machinery immediately.
  • Judgment entered for defendant on counterclaim for UGX 273,450,449 being outstanding costs of materials supplied.
  • Interest awarded at 21% per annum on counterclaim amount from date of filing till payment in full.
  • Counterclaim amount to be offset from plaintiff's award.

Rules and key headnotes

Misrepresentation — VAT Status — Letter of Intent versus Final Contract
Where a letter of intent represents that a contract sum will be plus VAT but the subsequently executed contract is silent on VAT, and the contractor reasonably relies on the representation to incur VAT costs, the misrepresentation induces the contract and creates liability for the representor even if subsequent legislation provides a VAT exemption that was not disclosed during negotiations.
Breach of Contract — Termination — Suspension of Works versus Repudiation
A contractor's suspension of works accompanied by a declaration of dispute and request for resolution does not constitute repudiation of the contract where the suspension is necessitated by the other party's failure to resolve outstanding payment and supply issues. The suspension indicates an intention to resume work after dispute resolution, not an intention to abandon contractual obligations.
Liquidated Damages — Waiver by Accommodation of Delay
Where a party entitled to liquidated damages under a construction contract repeatedly accommodates delays by requesting revised programmes of works and continues performance beyond the original completion date without invoking the liquidated damages clause, that party waives its right to subsequently claim liquidated damages for those delays.
General Damages — Wrongful Termination of Construction Contract — Measure of Damages
In assessing general damages for wrongful termination of a construction contract, the court exercises discretion to compensate the innocent party for losses suffered, taking into account hardships, inconveniences, and loss of profits, but not to punish the defaulting party. The award should place the plaintiff in the position it would have been in had the contract been performed.
Special Damages — Strict Proof — Materials Left on Site
Claims for value of equipment and materials must be pleaded as special damages and strictly proved. Where a contract provides that upon termination the terminating party may take all materials and equipment on site and use them for completing the works, the terminated party cannot claim payment for those materials as special damages.
Mitigation of Loss — Duty of Innocent Party
The mitigation rule imposes on a party claiming damages the duty of taking all reasonable steps to mitigate loss consequent on a breach. A party who causes damage by acting unreasonably or fails to mitigate damage cannot claim for loss attributable to that neglect. Where loss was foreseeable and no steps were taken to mitigate it, the claim for damages arising from that loss fails.
Evidence — Uncontroverted Testimony — Effect of Failure to Cross-Examine
Where a party is given an opportunity to cross-examine a witness on material facts adverse to that party's case but declines to do so or states it has no problem with the evidence, the sworn testimony stands uncontroverted and the facts are presumed admitted.

Legislation cited (2)

Cases cited (12)

  • Cheshire & Fifoot on Law of Contract, Eleventh Edition at page 257
  • Harlsbury's Laws of England 4th Edition Vol. 31 at page 461
  • Fox v Mackreth (1788) 2 Cox Eq. Cas 320
  • Chitty on Contracts Volume I General Principles Paragraph 6-085 at page 378
  • Interfreight Forwarders (U) Ltd v East African Development Bank (SCCA No. 33 of 1993)
  • Kituni Construction Company Ltd v Julius Okeny (HCT-00-CC-CS-0250-2004)
  • Lodder v Slowey [1904] AC 442
  • Harburr's Plasticine Ltd v Wyne Tank & Pump Co Ltd [1970] 1 QB 447
  • Petrocity Enterprises (U) Ltd v Security Group (U) Ltd (Civil Suit No. 869 of 2004)
  • Compania Naviera Maropon SA v Bowaters Lloyd, Pulp and Paper Mills Ltd [1955] 2 QB 68
  • African Highland Produce Ltd v Kisorio [2001] EA 1
  • Samwiri Masa v Rose Achieng [1979] HCB 29

Cases citing this judgment (2)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Boschcon Civil & Electrical Construction Co (U) Ltd v Salini Construttori SPA (Civil Suit No. 151 of 2008) [2012] UGCommC 133 (7 November 2012)
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.