Wakilii

Financial Access Commerce & Trade Services (Uganda) Limited v Durogreen Investments Limited and Another (Consolidated Civil Suit No. 95 of 2020 & 127 of 2020)

High Court · [2024] UGCOMMC 432 Judgment for Plaintiff against 1st Defendant; Suit Dismissed against 2nd Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance consolidated civil suits for recovery of sums under deed of assignment
Decision
Judgment entered for Plaintiff against 1st Defendant for breach of assignment with monetary recovery, general damages, and interest. Suit dismissed against 2nd Defendant for lack of privity to the assignment.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the plaintiff established a cause of action against the 1st defendant for breach of a notice of assignment but failed to establish a cause of action against the 2nd defendant. The acknowledgment of assignment was executed by Aster Investment (U) Limited, a separate legal entity from the 2nd defendant Aster Pharma Limited, and there was no consensus ad idem between the plaintiff and the 2nd defendant. The suit was dismissed against the 2nd defendant. Judgment was entered for the plaintiff against the 1st defendant for recovery of UGX 121,629,141 with general damages and interest.

Outcome

Judgment entered for Plaintiff against 1st Defendant for breach of assignment with monetary recovery, general damages, and interest. Suit dismissed against 2nd Defendant for lack of privity to the assignment.

Facts

The plaintiff, a licensed money lender, offered a supply chain finance facility to Dokwals Uganda Limited based on accounts receivable. On 23 January 2019, Dokwals assigned to the plaintiff all accounts receivable from the defendants arising from invoices for pharmaceutical supplies. The 1st defendant Durogreen Investments Limited and 2nd defendant Aster Pharma Limited each acknowledged the assignment by deed dated 23 January 2019, confirming irrevocable instructions to pay into the plaintiff's designated bank account. The 1st defendant failed to file a defence and the case proceeded ex parte. The 2nd defendant denied liability, claiming the acknowledgment was executed by Aster Investment (U) Limited, a separate legal entity. Both defendants alleged they had paid the invoices directly to Dokwals without the plaintiff's consent, in breach of the assignment. The plaintiff sued to recover UGX 121,629,141 from the 1st defendant and UGX 180,916,000 from the 2nd defendant.

Issues

  1. Whether the Plaintiff has a cause of action against the 2nd Defendant?
  2. Whether the Plaintiff is entitled to the sum of UGX 121,629,141 by the 1st Defendant, and UGX 180,916,000 by the 2nd Defendant under the Notice of Assignment dated 23 January 2019?
  3. What remedies are available to the parties?

Orders

  • Suit dismissed against the 2nd Defendant with costs.
  • Declaration that the 1st Defendant breached the Notice of Assignment.
  • Order for recovery of UGX 121,629,141 against the 1st Defendant.
  • General damages of UGX 40,000,000 awarded against the 1st Defendant.
  • Interest on UGX 121,629,141 at the rate of 20% per annum from date of filing suit until payment in full.
  • Interest on general damages at the rate of 8% per annum from date of judgment till payment in full.
  • Costs of the suit awarded to the Plaintiff against the 1st Defendant.

Rules and key headnotes

Assignment — Privity of Contract — Identity of Parties to Assignment
Where a notice of assignment names one party but the acknowledgment of assignment is executed by a different legal entity with no evidence of consensus ad idem, the acknowledgment is unenforceable against the party named in the notice for lack of privity of contract.
Assignment — Absolute Assignment — Effect on Assignor's Interest
An absolute assignment transfers all rights and interest in the assigned property from the assignor to the assignee, leaving the assignor with no interest. Where the nature of assignment is absolute, consent of the assignee is required for any payments to the assignor.
Separate Legal Personality — Distinction Between Related Companies
Companies that are separately incorporated remain distinct legal persons even where they share common directors and shareholders. The actions of directors bind only the company to which the transaction relates, not related third-party entities.
Privity of Contract — Third Party Cannot Challenge Validity
A party who is not privy to a contract cannot challenge the legality or validity of that contract. Only parties directly involved in a contract can enforce legal rights and obligations under it.
Cause of Action — Essential Elements
A cause of action is disclosed where three essential elements are pleaded: the existence of the plaintiff's right, the violation of that right, and the defendant's liability for that violation. The court must assume allegations in the plaint are true when determining whether a cause of action is disclosed.
Default Judgment — Burden of Proof in Ex Parte Proceedings
Where a defendant fails to file a defence and the case proceeds ex parte, a constructive admission of the claim arises. However, the burden of proof remains with the plaintiff to prove the case on a balance of probabilities.
General Damages — Assessment — Factors for Consideration
In assessing general damages, courts consider the value of the subject matter, the economic inconvenience suffered by the plaintiff, and the nature and extent of the injury. General damages compensate for economic loss and inconvenience resulting from breach of contract.

Legislation cited (10)

Cases cited (28)

  • Ismail Serugo v Kampala City Council & Attorney General (SC Constitutional Appeal No. 2 of 1998)
  • The National Security Fund & Anor v Alcon International (SCCA No. 15 of 2009)
  • Dunlop Pneumatic Tyre Co. Ltd Vs Selfridge & Co. Ltd [1915] AC 847
  • Tororo Cement Co Ltd v Frokina International Ltd (SCCA No. 2 of 2001)
  • Madhvani International SA v Attorney General (CACA No. 48 of 2004)
  • Narottam Bhatia & Anor v Boutique Shazimi Ltd (SCCA No. 6 of 2009)
  • Jeraf Sharif & Co. Vs Chotai Fancy Stores [1960] E.A 374
  • Behange Vs School Outfitters(U) Ltd [2000]1 E. A 20
  • Barclays Bank of Uganda Limited v Howard Bakojja (HCCS No. 53 of 2011)
  • Nakawa Trading Co Ltd v Coffee Marketing Board (HCCS No. 137 of 1991)
  • Green Boat Entertainment Ltd v City Council of Kampala (HCCS No. 0580 of 2003)
  • Godfrey Magezi & Anor v Sudhir Ruparelia (SCCA No. 16 of 2001)
  • Karegyeya Geoffrey v Mugabi Innocent T/A Ssemanda & Sons Est (Civil Suit No. 753 of 2019)
  • Kiga Lane Hotel Limited v Uganda Electricity Distribution (HCCS No. 0557 of 2004)
  • Midland Silicones Ltd Vs Scruttons [1962] A.C 446
  • United Building Services Limited v Yafesi Muzira T/A Quick Set Builders and Co (HCCS No. 154 of 2005)
  • Basiima Kabonesa v The Attorney General & Anor (SCCA No. 16 of 2021)
  • URA v Wanume David Kitamirike (CACA No. 43 of 2010)
  • Jovelyn Barugahare v Attorney General (SCCA No. 28 of 1993)
  • Storms Vs Hutchinson [1905] A.C 515
  • Robert Cuossens v Attorney General (SCCA No. 8 of 1999)
  • Crown Beverages Ltd v Sendu Edwards (SCCA No. 1 of 2005)
  • Uganda Commercial Bank Vs Kigozi [2002] 1 EA 305
  • Crescent Transportation Co Ltd v Bin Technical Services Ltd (CACA No. 25 of 2000)
  • Premchandra Shenoi & Anor v Maximov Oleg Petrovich (SCCA No. 9 of 2003)
  • Mukisa Biscuit Manufacturing Co. Ltd Vs West End Distributors Ltd (No.2) [1970] EA 469
  • Prem Lata Vs Mbiyu [1965] EA. 592
  • Gulaballi Ushillani v Kampala Pharmaceuticals Ltd (SCCA No. 6 of 1998)

Full judgment

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

Financial Access Commerce & Trade Services (Uganda) Limited v Durogreen Investments Limited and Another (Consolidated Civil Suit No. 95 of 2020 & 127 of 2020) [2024] UGCommC 432 (2
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.