Wakilii

Kenas Engineering Services Limited v China Jiangxi International Uganda Limited and Another (Civil Suit No. 208 of 2019; Civil Suit No. 381 of 2017)

High Court · [2025] UGCOMMC 530 Judgment for Plaintiffs (Consolidated) AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated first instance civil suits for breach of contract and recovery of debt
Decision
China Jiangxi ordered to pay Kenas UGX 231,854,429.3 plus general damages of UGX 40,000,000 plus interest. Kenas ordered to pay S & G Enterprises UGX 67,899,088 plus general damages of UGX 7,000,000 plus interest, but China Jiangxi ordered to indemnify Kenas fully against this liability.

Observed later treatment

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Holding

The court held that China Jiangxi lawfully terminated the subcontract with Kenas for material breach due to delayed performance, but remained liable to pay UGX 231,854,429.3 for works executed. Kenas was held liable to S & G Enterprises for the purchase price of goods supplied, but China Jiangxi was ordered to indemnify Kenas against this claim under the third-party notice since the goods were delivered to China Jiangxi's site. S & G Enterprises established a cause of action against both Kenas and its managing director based on the local purchase order and admission of indebtedness.

Outcome

China Jiangxi ordered to pay Kenas UGX 231,854,429.3 plus general damages of UGX 40,000,000 plus interest. Kenas ordered to pay S & G Enterprises UGX 67,899,088 plus general damages of UGX 7,000,000 plus interest, but China Jiangxi ordered to indemnify Kenas fully against this liability.

Facts

By subcontract dated 8th July 2015, China Jiangxi contracted Kenas to supply and fix electro-mechanical and ICT works for the administration block of Uganda Petroleum Institute, Kigumba, at UGX 932,046,980. Kenas was paid 10% advance instead of 20%. Progress reports dated 25th November 2016 and 6th January 2017 showed delayed performance across multiple work items, with most installations at 0% to 50% completion despite approaching the May 2017 completion date. On 27th February 2017, China Jiangxi terminated the subcontract for breach of contract, citing repeated failure to perform despite reminders. Kenas ordered goods worth UGX 67,899,088 from S & G Enterprises via local purchase order. The goods were delivered to China Jiangxi's site with invoice and delivery note addressed to China Jiangxi. S & G Enterprises sued Kenas and its managing director for non-payment. Kenas sued China Jiangxi for wrongful termination and UGX 231,854,429.3 for unpaid works. China Jiangxi counterclaimed UGX 31,197,725 for overpayment but failed to enter appearance at trial.

Issues

  1. Whether S & G Enterprises Limited has a cause of action against Kenas Engineering Services Limited and Semwanga Godfrey Kabuzi?
  2. Whether China Jiangxi International Uganda Limited breached the subcontract Agreement between it and Kenas Engineering Services Limited?
  3. Whether China Jiangxi International Uganda Limited is indebted to Kenas Engineering Services Limited in the sum of UGX 231,854,429.3?
  4. Whether Kenas Engineering Services Limited and Semwanga Godfrey Kabuzi are indebted to S & G Enterprises Limited?
  5. What remedies are available to the parties?

Orders

  • China Jiangxi International Uganda Limited shall pay Kenas Engineering Services Limited the sum of UGX 231,854,429.3 being the outstanding payment for the works executed.
  • Kenas Engineering Services Limited shall pay S & G Enterprises Limited the sum of UGX 67,899,088 being the purchase price for the goods supplied.
  • Kenas Engineering Services Limited is awarded general damages of UGX 40,000,000.
  • S & G Enterprises Limited is awarded general damages of UGX 7,000,000.
  • Interest is awarded on the sum in (1) above at the rate of 20% per annum from the date of judgment until payment in full.
  • Interest is awarded on the sum in (2) above at the rate of 20% per annum from the date of judgment until payment in full.
  • Interest is awarded on general damages at the rate of 6% per annum from the date of judgment until payment in full.
  • Judgment in default is entered against China Jiangxi International Uganda Limited, which is ordered to fully indemnify Kenas Engineering Services Limited against the claim of S & G Enterprises Limited as set out in the Third Party Notice.
  • Costs of the suit in Civil Suit No. 381 of 2017 are awarded to Kenas Engineering Services Limited.
  • Costs of the suit in Civil Suit No. 208 of 2019 are awarded to S & G Enterprises Limited.

Rules and key headnotes

Breach of Contract — Lawful Termination — Material Breach by Subcontractor
A main contractor may lawfully terminate a subcontract where the subcontractor materially breaches performance obligations by failing to execute works in accordance with the approved work programme, despite repeated reminders and notices, where the subcontract agreement expressly permits termination for material breach.
Recovery of Debt — Payment for Works Executed Before Termination
Where a subcontract is lawfully terminated for breach, the subcontractor remains entitled to payment for works actually executed and materials supplied before termination, and the main contractor cannot refuse payment on grounds of termination alone where the quantum of work done is established by progress reports.
Cause of Action — Disclosure — Debt Claims
A plaint discloses a cause of action for debt where it pleads the existence of a purchase order, delivery of goods, and refusal to pay the purchase price, notwithstanding that delivery and invoicing were addressed to a third party rather than the party who issued the purchase order.
Third Party Notice — Indemnity
Where a defendant establishes by evidence that goods ordered under a local purchase order were delivered to and received by a third party at the third party's construction site, and the third party fails to file a defence to a third party notice or enter appearance at trial, the court may enter judgment in default and order the third party to indemnify the defendant fully against the plaintiff's claim.
General Damages — Assessment — Non-Payment for Works Executed
In assessing general damages for non-payment under a construction subcontract, the court considers the economic inconvenience suffered, the value of the subject matter, and the nature and extent of the breach, and awards such sum as will compensate the injured party for losses sustained.
Interest — Commercial Disputes — Rates
In determining a just and reasonable rate of interest under section 26(2) of the Civil Procedure Act, courts take into account inflation, currency depreciation, and the need to provide adequate compensation that insulates the successful party against economic vagaries, but must reject unjustifiably high claimed rates where no grounds are provided to support them.

Legislation cited (14)

Cases cited (21)

  • Oriental Insurance Brokers Limited v Transocean (U) Limited (Supreme Court Civil Appeal No. 55 of 1995)
  • John Bwiza v Patrick Yowasi Kadama (Court of Appeal Civil Appeal No. 35 of 2011)
  • [1971] EA 514
  • Tororo Cement Co. Ltd v Frokina International Limited (Supreme Court Civil Appeal No. 2 of 2001)
  • Kapeka Coffee Works Ltd & Another v NPART (Court of Appeal Civil Appeal No. 3 of 2000)
  • Ainomugisho Winifred & Others v Fatuma Dusto Nalumansi & Others (High Court Miscellaneous Application No. 2084 of 2016)
  • William Kasozi v DFCU Bank Ltd (High Court Civil Suit No. 1326 of 2000)
  • Meridiana Africa Airlines (U) Ltd v Avmax Spares (EA) Ltd (High Court Civil Suit No. 111 of 2017)
  • [2005] 8 NWLR (pt.928)
  • [2000] 1 EA 52
  • Takiya Kashwahiri and Another v Kajungu Denis (Court of Appeal Civil Appeal No. 85 of 2011)
  • Milly Masembe v Sugar Corporation (U) Ltd and Another (Supreme Court Civil Appeal No. 1 of 2000)
  • [1975] 1 All ER 849
  • Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd (High Court Civil Suit No. 224 of 2011)
  • Kabandize John Baptist and 21 Others v Kampala Capital City Authority (Court of Appeal Civil Appeal No. 36 of 2016)
  • [2002] 1 EA 305
  • Luzinda Marion Babirye v Ssekamatte (Alias Mulwana Samuel) & Others (High Court Civil Suit No. 366 of 2017)
  • [1971] EA 91
  • [1979] Crim. LR 46
  • [1985] QB 401
  • Uganda Development Bank Vs Muganga Construction Co. Ltd (supra)

Full judgment

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

Kenas Engineering Services Limited v China Jiangxi International Uganda Limited and Another (Civil Suit No. 208 of 2019; Civil Suit No. 381 of 2017) [2025] UGCommC 530 (30 December
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.