Wakilii

Face Technologies (PTY) Ltd v Attorney General & Anor (HCT-00-CC-CS 248 of 2008)

High Court · [2014] UGCOMMC 167 · 2014 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 following suspension of public procurement award
Decision
Judgment entered for the Plaintiff with substantial damages awarded for breach of contract

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a binding contract existed between the parties despite the absence of a signed written document, based on the parties' conduct, consensus, and the Build Operate Transfer nature of the procurement which fell outside the Public Procurement & Disposal of Public Assets Act 2003. The contract was breached when the Defendants suspended the project and failed to communicate or resume it. The defence of frustration failed because the suspension was caused by the Government itself, a party to the contract. Plaintiff awarded damages for customized solution (10% of contract price), special damages for mobilization expenses, and general damages for lost opportunities.

Outcome

Judgment entered for the Plaintiff with substantial damages awarded for breach of contract

Facts

The Government of Uganda advertised for competitive bids to establish a National Population Data Bank & Identification System under a Build Operate Transfer (BOT) arrangement. Face Technologies (PTY) Ltd was evaluated as the best bidder, invited for negotiations in January 2006, and notified of contract award on 23rd January 2006 by the Chairman Contracts Committee. The Plaintiff began mobilizing resources and developing a customized software solution. On 2nd February 2006, the same Chairman suspended all activities relating to the contract pending an investigation by the Inspector General of Government into allegations raised by aggrieved bidders. Despite the IGG completing investigations and submitting a report in August 2008, the Plaintiff was never notified of the outcome and the contract was never resumed. The Plaintiff commenced suit in 2008 claiming breach of contract, special and general damages, and lost profits.

Issues

  1. Whether there was a contract formed between the Plaintiff and the Defendants?
  2. Whether the contract was breached?
  3. Whether there was frustration of the contract?
  4. What remedies are available to the parties?

Orders

  • Judgment entered in favour of the Plaintiff.
  • US$ 9,204,947.2 awarded for the customized solution.
  • US$ 3,904,702 awarded as special damages.
  • UGX 50,000,000 awarded as general damages.
  • Interest on special damages and customized solution at 12% per annum from 1st February 2006 until payment in full.
  • Interest on general damages at 6% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the Plaintiff.
  • Claim for punitive damages denied.
  • Claim for compound interest denied.

Rules and key headnotes

Contract Formation — Binding Contract Without Signed Written Document
A binding and enforceable contract may exist even in the absence of a signed written document where the parties have reached consensus, communicated acceptance through conduct, and one party has commenced performance based on the other party's representations and conduct indicating contractual intent.
Public Procurement — Build Operate Transfer Contracts — Exclusion from PPDA Act
Build Operate Transfer (BOT) contracts do not fall within the provisions of the Public Procurement & Disposal of Public Assets Act 2003, and their interpretation may be guided by international regulations rather than the requirement for signed contracts under Section 76 of the Act.
Attorney General's Role — Legal Advice on Government Contracts — Delegation to Solicitor General
The constitutional requirement under Article 119(5) that Government contracts receive legal advice from the Attorney General is satisfied where the Solicitor General is involved and gives assurances that procurement regulations have been followed, as the Solicitor General may exercise the Attorney General's powers under Section 29 of the Interpretation Act.
Contract Formation — Retrospective Effect — Commencement Before Formal Execution
Where parties begin to act on the terms of an agreement before a contract is formally concluded, that contract may have retrospective effect so as to apply to work done or goods supplied before it was actually made, provided the terms expressly or by implication so provide.
Estoppel — Representation by Conduct — Preventing Denial of Contract Existence
Under Section 114 of the Evidence Act, where one party by declaration, act or omission intentionally causes another to believe a thing to be true and to act upon that belief, that party is estopped from denying the truth of that thing in subsequent proceedings, even where the party inducing the belief acted in error or without full knowledge.
Frustration of Contract — Defence Not Available Where Frustrating Event Caused by Contracting Party
The defence of frustration is not available where the event preventing performance of the contract was caused by one of the parties to the contract itself; frustration requires that the supervening event be extraneous and not the fault of either party.
Special Damages — Mobilization Costs — Build Operate Transfer Contracts
In a Build Operate Transfer contract where the contractor provides upfront financing and mobilizes resources in reliance on the contracting party's representations, special damages for mobilization expenses including human resources retained in a state of readiness, customized solutions, and bid guarantees are recoverable where the contract is breached before performance is complete.

Legislation cited (7)

Cases cited (17)

  • Nsimbe Holdings Ltd v Attorney General & Anor (Constitutional Petition No. 2 of 2006)
  • Trollope & Colls Ltd V Atomic Power Construction Ltd [1963] 1 WLR 333
  • Rose & Frank Co. V J.R. Crompton & Bros Ltd [1924] All ER 248
  • Alexander Brogden & Others V The Directors of the Metropolitan Railway Company (1876 - 77) LR 2 AC. as 666
  • Finishing Touches Ltd v Attorney General (HCCS No. 144 of 2010)
  • Development Finance Company of Kenya Ltd V Wino Industries Ltd [1995 - 98]2 EA 65
  • Cairncross V Lorimer [1860]3 LT 130
  • Day V Lala [1982] LR 19 IA 203
  • Pan African Insurance Co. (U) Ltd v International Air Transport Association (HCCS No. 667 of 2003)
  • Montreal Street Ry Co. V Normandin [1917] AC at Page 381
  • Taylor V Caldwell [1863] 3 B and S 826
  • Krell V Henry [1903] 2 KB 740
  • Potgieter V Stumberg & Another (no. 2) [1972] EA 370
  • JK Patel v Spear Motors Ltd (SCCA No. 4 of 1991)
  • Hadley V Baxendale [1843 - 60] All ER 46
  • URA v Wanume David Kitamirike (CACA No. 43 of 2010)
  • Harbutt's Plasticine Ltd V Wayne Tank & Pump Co. Ltd [1970] AQB 447

Full judgment

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Face Technologies (PTY) Ltd v Attorney General & Anor (HCT-00-CC-CS 248 of 2008) [2014] UGCommC 167 (4 December 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.