Wakilii

Equator Touring Services v Kampala City Council (HCCS 763 of 2007)

High Court · [2014] UGCOMMC 45 · 2014 Contract Declared Null and Void AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit determined on agreed facts and issues in a joint scheduling memorandum
Decision
Contract declared null and void for failure to obtain Attorney General's advice as required by Constitution article 119(5); plaintiff's claim dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A contract entered into by a local government without the Attorney General's legal advice required by article 119(5) of the Constitution is null and void where the contract value exceeds UGX 50 million. The contract in question, worth UGX 555,642,000 over three years, was held to be a nullity. Gazetting is not a statutory requirement for the establishment of a market under the Markets Act.

Outcome

Contract declared null and void for failure to obtain Attorney General's advice as required by Constitution article 119(5); plaintiff's claim dismissed

Facts

In 1999, Kampala City Council advertised a tender for management of Nakivubo Park Yard Market. Equator Touring Services Ltd was awarded the tender and entered into a market management agreement on 15 December 2000. The contract was extended on 1 April 2005 for three years at a monthly consideration of UGX 15,434,500. The plaintiff made payments totaling approximately UGX 1 billion over eight years. In January 2008, the defendant terminated the contract. The defendant alleged that the plaintiff assigned its obligations without consent and defaulted on payments. The parties agreed to refer two questions of law to court: the validity and legality of the contract, and whether gazetting was required to establish a market. The 2005 contract extension preamble stated that the Council was unable to consider fresh bids due to a pending civil suit. Neither the 2000 contract nor the 2005 extension was submitted to the Attorney General for legal advice as required by the Constitution.

Issues

  1. Whether the contract for the management of Nakivubo Park Yard market entered into by the parties was a valid and legal contract?
  2. Whether gazetting is a requirement for a market to be established under the laws of Uganda?

Orders

  • The contract dated 1 April 2005 between Equator Touring Services Ltd and Kampala City Council is declared a nullity.
  • The first issue is answered in the negative — the contract was not a valid and legal contract.
  • The second issue is answered — gazetting is not a requirement for a market to be established under the laws of Uganda.
  • Each party shall bear its own costs of the suit.

Rules and key headnotes

Attorney General's Legal Advice — Contracts by Government Entities — Exemption Threshold
Under article 119(5) of the Constitution, no contract to which the government or a government entity is a party shall be concluded without the Attorney General's legal advice. The exemption for contracts involving UGX 50 million or less applies to the entire contract value, not to periodic installment amounts. Where a three-year contract requires monthly payments of UGX 15,434,500, the contract value is the total over the contract period (UGX 555,642,000), not the monthly installment.
Constitutional Supremacy — Nullity of Acts Inconsistent with Constitution
By virtue of article 2 of the Constitution, any law or act that contravenes the Constitution is void to the extent of the inconsistency. A contract executed by a government entity without submitting it to the Attorney General for legal advice in contravention of article 119(5) is unconstitutional, null and void.
Public Procurement — Tender Procedures — Extension Without Fresh Bids
Where a local government extends a procurement contract without inviting fresh bids and without complying with the Public Procurement and Disposal of Public Assets Act 2003, which applies to all public procurement by local governments, the action contravenes mandatory statutory procedures.
Markets — Establishment — Gazetting Requirement
Under the Markets Act cap 94, gazetting is not prescribed as a statutory requirement for the establishment of a market by a district administration or municipal or town council. The Act requires only that byelaws passed for the regulation of markets be gazetted.
Illegality — Court's Power to Sanction Illegal Contracts
A court of law cannot sanction what is illegal. Illegality, once brought to the attention of the court, overrides all questions of pleading, including admissions made thereon. Where a contract is declared null and void for constitutional non-compliance, the court will not enforce it notwithstanding that services may have been performed and consumed.

Legislation cited (20)

Cases cited (6)

  • JK Patel v Spear Motors Limited (SCCA No. 4 of 1991)
  • Interfreight Forwarders (U) Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
  • Nsimbe Holdings Limited v Attorney General (Constitutional Petition No. 2 of 2006)
  • Makula International Ltd v His Eminence Cardinal Nsubuga [1982] HCB 11
  • Cullimore vs. Lyme Regis Corporation [1961] 3 All ER 1008
  • Finishing Touches Ltd v Attorney General (HCCS No. 144 of 2010)

Full judgment

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

Equator Touring Services v Kampala City Council (HCCS 763 of 2007) [2014] UGCommC 45 (2 May 2014)
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.