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China Road and Bridge Corporation v Welt Machinenen Engineering Limited (Civil Appeal 52 of 2017)

Court of Appeal · [2019] UGCA 2105 · 2019 Appeal Dismissed; Cross-Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First appeal and cross-appeal from a High Court civil suit for trespass and conversion
Decision
Appeal dismissed; cross-appeal allowed; Appellant ordered to compensate the Respondent UGX 23,995,130,000 and permanent injunction granted

Observed later treatment

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Holding

The Court of Appeal held that granite is an industrial mineral under the Mining Act 2003 and is not excluded from the constitutional definition of minerals, so its extraction required a licence from the Ministry of Energy. The Appellant's mining under authority of a District Local Government was illegal and constituted trespass and conversion. The Respondent's location licences were validly issued and not procured by fraud. Reversing the trial judge, the Court found each licence covered one of the two rocks, including Kamusalaba, so the Appellant infringed the Respondent's mineral rights. The appeal was dismissed and the cross-appeal allowed, with compensation of UGX 23,995,130,000 ordered payable to the Respondent, not the Government.

Outcome

Appeal dismissed; cross-appeal allowed; Appellant ordered to compensate the Respondent UGX 23,995,130,000 and permanent injunction granted

Facts

The Respondent held two location licences (Nos. 1194 and 1195) to mine granite, its interest tracing to a surrender of part of an exploration licence previously held by Rhino United Agencies Ltd over the suit area. The Appellant, contracted to construct the Moroto-Nakapiripirit road, excavated and crushed granite stones from Kamusalaba (also Nakumama) rock in Nakapiripirit District, purportedly under authority granted by the Nakapiripirit District Local Government. The Respondent sued for trespass and conversion. The parties agreed the Respondent held the two licences and that the Appellant was in possession of the suit rock. The Appellant contended granite rocks were not minerals excluded under Article 244(5) of the Constitution, and that the Respondent's licences were fraudulently obtained. Uganda National Roads Authority evidence valued the aggregate stones at UGX 23,995,130,000, and a consultant projected losses of UGX 20,329,983,000. The aggregates used on the road were extracted from the licensed area. The High Court partly allowed the suit, ordering payment to Government; both parties appealed.

Issues

  1. Whether granite stone is a mineral within the meaning of Article 244(5) of the Constitution and the Mining Act 2003.
  2. Whether the location licences granted to the Respondent were validly and lawfully issued or procured by fraud.
  3. Whether either location licence covered the suit rock (Kamusalaba) so as to found infringement of the Respondent's mineral rights.
  4. Whether the Appellant, having mined without a licence, could be compensated to the Government or to the Respondent.
  5. Whether the trial judge properly assessed and awarded special damages.
  6. Whether the trial judge properly exercised her discretion in awarding costs.

Orders

  • The appeal is dismissed with costs here and in the Court below.
  • The cross-appeal is allowed with costs.
  • The Appellant infringed on the Respondent's mining interest in the Kamusalaba rock.
  • The Appellant shall compensate the Respondent in the sum of UGX 23,995,130,000 being the value of granite stones it wrongfully exploited from the Kamusalaba rock.
  • A permanent injunction issues restraining the Appellant from interfering with the Respondent's mining right in the Kamusalaba/Nakumama rock.

Rules and key headnotes

Constitutional Interpretation — Definition of Minerals — Article 244(5) — Punctuation and Disjunctive Reading
Under Article 244(5) of the Constitution, the qualification 'commonly used for building or similar purposes' attaches only to 'sand and or stone', while clay and murram are automatically excluded; granite, being classified as an industrial mineral under the Mining Act 2003, is a mineral requiring a licence to exploit.
Mining Rights — Licensing Authority — Local Government Lacks Power to Authorise Mining
A District Local Government has no lawful power to issue any licence or permission to prospect for or mine a mineral; that authority is the exclusive preserve of the Ministry of Energy, and mining under such purported local authority confers no rights and is illegal.
Trespass and Conversion — Illegal Miner as Trespasser — No Reliance on Own Illegality
A person who mines without a lawful licence commits an illegality and becomes a trespasser; such a party cannot rely on its own illegal activity as a shield against another who lawfully holds mineral rights over the land.
Conversion — Measure of Damages — Value of Goods at Time of Conversion
The measure of damages for conversion is the value of the property converted at the time of conversion; where granite aggregates were valued at UGX 23,995,130,000 in the bills of quantities, that is the sum payable by the trespasser.
Pleadings — Party Bound by Case Pleaded — Court Cannot Decide Unpleaded Issue
A party is bound to prove the case as pleaded and framed in the issues, and a court should not resolve a matter conceded by the parties or one not raised in the pleadings or evidence.
Compensation for Wrongful Mining — Recipient — Licence Holder Rather Than Government
Where a person holds a lawful licence over minerals wrongfully exploited by another, compensation for the value of the minerals is payable to the licence holder, the Government being entitled only to taxes and royalties on licensed minerals.

Legislation cited (8)

Cases cited (7)

  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 2007)
  • Banco Arabe Espanol v Bank of Uganda (Civil Appeal No. 8 of 1998)
  • Panda v R (1957) E.A. 336
  • Okeno vs. Republic (1972) E.A. 32
  • Julius vs Oxford (BP) (1880) 5 App Cas 214
  • Interfreight Forwarders Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
  • Musoke v Departed Asians Property Custodian Board (Civil Appeal No. 1 of 1992)

Full judgment

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

China Road and Bridge Corporation v Welt Machinenen Engineering Limited (Civil Appeal 52 of 2017) [2019] UGCA 2105 (21 June 2019)
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.