Wakilii

Industrie Rohstoffe GMBH v Matiya and Another (Civil Suit 478 of 2021)

High Court · [2022] UGCOMMC 120 · 2022 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for stoppage in transitu and recovery of goods
Decision
Judgment entered for the plaintiff; goods ordered to be restored to plaintiff and re-exported at plaintiff's cost with reimbursement by defendants

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

An unpaid seller who is the victim of identity fraud may exercise the right of stoppage in transitu where goods remain in the custody of a carrier and it is apparent the buyer will not pay. The seller must prove it is an unpaid seller, the goods are still in transit, and the buyer will not perform a substantial part of obligations. The right may be exercised upon anticipatory breach based on the buyer's serious deficiency in creditworthiness, without requiring actual breach to have occurred.

Outcome

Judgment entered for the plaintiff; goods ordered to be restored to plaintiff and re-exported at plaintiff's cost with reimbursement by defendants

Facts

The plaintiff, an Austrian chemical manufacturer, shipped eighteen containers of Poly aluminium chloride to Uganda in March 2021 following email correspondence with the defendants who held themselves out as Bristol Water Plc UK. After shipping the goods and issuing an invoice for USD 148,495.88, the plaintiff sought verification from Bristol Water Plc UK, which denied placing the order. Investigation revealed the defendants had impersonated Bristol Water Plc UK and incorporated a company called Bristol Water Plc (Africa) in Uganda on 29 March 2021. The goods arrived in Kampala on 23 March 2021 and remained in custody of Uganda Revenue Authority customs officers. The invoice remained unpaid. The defendants were served with summons but filed no defence.

Issues

  1. Whether the plaintiff is entitled to an order of stoppage of the goods in transitu.
  2. What remedies are available to the plaintiff?

Orders

  • An order granting the plaintiff leave to take possession of the eighteen (18) containers of Poly aluminium chloride.
  • An order that the goods be re-exported to the plaintiff at the plaintiff's cost, which cost and that of storage while in Uganda is to be reimbursed by the defendants jointly and severally.
  • The defendants jointly and severally meet the costs of the suit.

Rules and key headnotes

Sale of Goods — Stoppage in Transitu — Requirements for Exercise of Right
To succeed in a claim for stoppage in transitu, the plaintiff must prove that it is an unpaid seller either wholly or partially, that the goods are still in transit, and that it is apparent that the buyer will not perform a substantial part of his or her obligations.
Sale of Goods — Transit — Definition and Duration
Under section 56(1) of the Sale of Goods and Supply of Services Act 2018, goods are in the course of transit from the time they are delivered to a carrier for transmission to the buyer until the buyer or his agent takes delivery from that carrier. Transit continues as long as goods are with a carrier as intermediary and have not been delivered to the consignee or his agent.
Anticipatory Breach — Right to Suspend Performance
At common law, a party has the right to suspend performance of obligations if, after conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of obligations as a result of either a serious deficiency in that party's ability to perform or creditworthiness, or his conduct in preparing to perform or in performing the contract. The right of stoppage does not require an actual breach to have occurred.
Sale of Goods — Stoppage in Transitu — Adequate Assurance to Prevent Stoppage
To prevent or suspend a stoppage in transitu on account of assurances given by the buyer, the assurance must be sufficient to offer security to the seller that its performance will not lead to detriment and damages. The assurance must cover the value of outstanding payments or goods and damages anticipated in connection with the anticipated breach; mere promises will not suffice. Sufficient assurance will ordinarily take the form of a bank guarantee, pledge or bond.
Sale of Goods — Stoppage in Transitu — Identity Fraud as Ground for Exercise
Where a buyer has impersonated a reputable company to induce a seller to ship goods and the impersonation is discovered after shipment but before delivery, the buyer's conduct constitutes uncontroverted circumstantial evidence of serious deficiency in creditworthiness, entitling the seller to exercise the right of stoppage in transitu.
Sale of Goods — Stoppage in Transitu — Carrier's Duty Upon Notice
Under section 57(1) of the Sale of Goods and Supply of Services Act 2018, when notice of stoppage is given by the seller to the carrier in possession of the goods, the carrier must redeliver the goods according to the directions of the seller. After proper notice is received, the carrier has a duty not to deliver the goods to the buyer but to redeliver them to the seller, failing which the carrier can be made liable for conversion.

Legislation cited (3)

Cases cited (2)

  • Bethell v Clark (1888) 19 QBD 553
  • Litt v Cowley (1816) 2 Marsh 45

Full judgment

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

Industrie Rohstoffe GMBH v Matiya and Another (Civil Suit 478 of 2021) [2022] UGCommC 120 (17 January 2022)
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.