Wakilii

Kiboko Enterprises Limited v Philps East Africa Limited and Another (Civil Appeal 167 of 2019)

Court of Appeal · [2024] UGCA 77 · 2024 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from a judgment of the High Court (Commercial Division) dismissing the appellant's suit for compensation
Decision
Appeal dismissed; appellant held liable for breach of the main contract and apportioned 80% of the loss

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal upheld a preliminary objection and struck out grounds 2 and 3 as too general and contrary to rule 86, for failing to specify the wrong decision allegedly made. On the merits, the court held that the appellant, as lead contractor, breached the contract by procuring goods from India instead of the specified Chinese-manufactured Philips products without disclosure or authorisation. The sub-contract was a formal framework for orderly execution, not a compensation agreement, and did not oblige the respondents to pay the appellant save as expressly provided. The appellant was more to blame for non-performance, bearing 80% of the loss. The appeal was dismissed with costs to both respondents.

Outcome

Appeal dismissed; appellant held liable for breach of the main contract and apportioned 80% of the loss

Facts

KCCA invited bids to install 750 streetlights in Kampala ahead of the November 2015 Papal visit. The 1st respondent, a foreign entity, asked the appellant to submit and execute the bid on its behalf, and a contract worth UGX 6,994,637,275 was awarded specifying Philips-branded products manufactured in China. The appellant received an advance payment of UGX 2.1 billion from KCCA. Instead of sourcing the goods from China, the appellant procured products from India without disclosure or authorisation. KCCA rejected the Indian-sourced goods, and the project was not completed within the two-month period despite extensions. On 11 March 2016 a sub-contract was signed, novating the 1st respondent's obligations to the 2nd respondent, but it expired before completion and KCCA refused further extension, enforcing the advance-payment and performance guarantees. The appellant's compensation claim against the respondents was refused, leading to the suit, which the High Court dismissed.

Issues

  1. Whether grounds 2 and 3 of the memorandum of appeal were too general and offended rule 86 of the Court of Appeal Rules.
  2. Whether the trial judge misconceived the intention, meaning and effect of the sub-contract.
  3. Whether the appellant was responsible for the breach of the main contract with KCCA.
  4. Whether the trial judge erred in failing to award the appellant the admitted or agreed claims under the sub-contract.

Orders

  • Preliminary objection upheld; grounds 2 and 3 of the appeal struck out for contravening rule 86.
  • Grounds 1 and 4 of the appeal disallowed.
  • Appeal dismissed with costs to the respondents.
  • Appellant to bear 80% of the loss; the 2nd respondent's responsibility assessed at 20%.
  • Both respondents awarded the costs of the appeal.

Rules and key headnotes

Civil Procedure — Appeals — Grounds of Appeal — Compliance with Rule 86
A ground of appeal that alleges only a failure to properly evaluate the evidence, without specifying the particular wrong decision arrived at as a consequence, is too general, incompetent, and offends rule 86 of the Court of Appeal Rules, and is liable to be struck out.
Contract Law — Formation — Oral and Inferred Contracts
Under section 10 of the Contracts Act 2010 a contract may be oral, written, a combination of both, or inferred from the conduct of the parties, and an agreement for supply and civil works that is verbally agreed is a binding contract.
Contract Law — Breach — Departure from Specified Source or Specifications
A contractor who, without disclosure or authorisation, procures goods from a source other than that specified in the contract commits a material breach, being a material non-compliance with the terms of a legally binding contract.
Contract Law — Parties — Representative Witnessing Contract — Imputed Knowledge
A party's representative who witnesses a contract is taken to have knowledge of its contents, and that knowledge may be imputed to the party so as to fix it with responsibility for performance of the contract's terms.
Contract Law — Construction — Sub-contract as Framework Not Compensation Agreement
Where a sub-contract is, on its true construction, a formal framework embodying terms for the orderly execution of a project rather than an agreement to compensate the contractor, it does not oblige the other party to pay for work done or imports made except as expressly provided, and the court will not redraft it to create such an obligation.
Contract Law — Damages — Measure of Compensatory Damages for Breach
The common law measure of compensatory damages for breach of contract is to place the innocent party, so far as money can do it, in the same situation as if the contract had been performed.
Contract Law — Apportionment of Liability for Non-performance
Where more than one party contributes to non-performance of a contract, the loss may be apportioned between them to reflect each party's share of the blame.

Legislation cited (6)

Cases cited (13)

  • Yunus Ismail t/a Bombo City Store v Alex Kamukama (Civil Appeal No. 7 of 1987)
  • Celtel Uganda Limited v Karungi Susan (Civil Appeal No. 0073 of 2013)
  • Ranchobhai Shivabhai Patel Ltd v Henry Wambuga (Civil Appeal No. 6 of 2017)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Father Narsensio Begumisa & 3 Ors v Eric Tibebaga, SCCA No.170 of 2002
  • Pandya v R [1961] EAA 336
  • Bogere Moses v Uganda (Criminal Appeal No. 1 of 1997)
  • Nakana Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 306
  • Robinson v Harman (1848) 1 Exch 860
  • Greaves and Co. (Contractors) Ltd v Baynham Meikle & Partners [1976] 3 All ER 99
  • Miller v Cannon Hill Estates Limited (1931) 2 KB 113
  • Hancock v B. W. Brazier (Anerley) Limited (1966) 1 W.L.R. 1317

Full judgment

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

Kiboko Enterprises Limited v Philps East Africa Limited and Another (Civil Appeal 167 of 2019) [2024] UGCA 77 (28 March 2024)
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.