Wakilii

Commodity House Limited v Sugar and Allied Industries Limited (Civil Suit No. 614 of 2015)

High Court · [2017] UGCOMMC 25 · 2017 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, proceeding ex parte after defendant failed to appear at hearing
Decision
Judgment for plaintiff; defendant ordered to refund US$291,035 with interest

Observed later treatment

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Holding

Court held that where a buyer pays for goods under a supply contract and the seller acknowledges non-delivery of the balance in writing, the buyer is entitled to a refund of the unpaid-for goods' value. Court declined to award general damages for loss of goodwill in addition to interest, holding that interest awarded as compensation for deprivation of money fulfils the principle of restitutio in integrum and thus subsumes what would otherwise be general damages.

Outcome

Judgment for plaintiff; defendant ordered to refund US$291,035 with interest

Facts

On 4 September 2014, plaintiff (a Kenyan commodities trading company) and defendant (a Ugandan sugar manufacturer) entered a contract for supply of 3,000 metric tons of sugar at US$600 per ton for total consideration of US$1,800,000. Delivery was to be ex-stock within seven weeks. Plaintiff paid US$1,080,035 in five instalments between September and December 2014. Defendant delivered sugar worth only US$789,000 by 11 March 2015, leaving a shortfall of 485 metric tons valued at US$291,035. On 5 May 2015, defendant's financial controller confirmed in writing the outstanding credit balance of US$291,035. Defendant failed to supply the balance or refund the money despite repeated demands. Plaintiff filed suit. Defendant filed a written statement of defence denying liability but failed to file witness statements or appear at hearing. Court proceeded ex parte on 21 February 2017.

Issues

  1. Whether the Defendant supplied the amount of sugar paid for and if not so, what was the shortfall?
  2. What remedies are available to the parties?

Orders

  • The Defendant shall refund to the Plaintiff the sum of US$291,035.
  • The sum carries interest at 10% per annum from March 2015 till the date of judgment.
  • Further interest is awarded at 6% per annum on the aggregate sum at the date of judgment from the date of judgment till payment in full.
  • The suit succeeds with costs to the Plaintiff.

Rules and key headnotes

Contract Law — Sale of Goods — Non-Delivery — Buyer's Remedy for Wrongful Non-Delivery
Under the Sale of Goods Act s.50, where a seller wrongfully neglects or refuses to deliver goods to a buyer, the buyer may maintain an action for damages for non-delivery, measured as the estimated loss directly and naturally resulting in the ordinary course of events from the seller's breach of contract.
Contract Law — Sale of Goods — Acknowledgment of Debt — Evidentiary Weight
A written acknowledgment by a seller that it holds a credit balance in favour of a buyer for undelivered goods constitutes proof of the debt and entitles the buyer to judgment for refund in the absence of contrary evidence.
Contract Law — Damages — Interest as Compensation — Relationship between Interest and General Damages
Interest awarded as compensation for deprivation of money fulfils the principle of restitutio in integrum and is awarded to reflect the rate at which the plaintiff would have had to borrow money to replace that withheld, such that where interest is awarded as compensation from the date of breach, general damages for loss of use of money should not be awarded concurrently.
Commercial Law — Ex-Stock Delivery Terms — Property and Risk
In a contract for sale of goods ex-stock, property and risk pass to the buyer upon delivery at the seller's warehouse; where delivery does not occur, property and risk remain with the seller and the buyer is entitled to a refund of the purchase price paid.

Legislation cited (3)

Cases cited (6)

  • Dharamshi v Karsan [1974] 1 EA 41
  • Sentongo v Kamuru (High Court Civil Suit No. 906 of 1971)
  • Ahimbisibwe v Akright Projects Ltd (High Court Civil Suit No. 832 of 2007)
  • 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
  • Okello James v Attorney General (High Court Civil Suit No. 574 of 2003)

Full judgment

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

Commodity House Limited v Sugar and Allied Industries Limited (Civil Suit No. 614 of 2015) [2017] UGCommC 25 (13 March 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.