Wakilii

Kyamuhunga Tea Co. Limited v Daks Couriers Limited (Civil Suit No. 862 of 2017)

High Court · [2019] UGCOMMC 19 · 2019 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 and negligence arising from loss of goods in transit
Decision
Judgment entered in favour of the plaintiff with damages, interest and costs awarded

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a freight forwarder who subcontracts transportation services without the client's written consent remains liable for breach when goods are lost in transit, notwithstanding any due diligence in selecting the subcontractor. The duty to deliver safely never leaves the original carrier. Where goods in transit are diverted from the approved route and cannot be traced, triggering customs penalties, the carrier is liable for both the value of the lost goods and the consequential penalties incurred by the consignor.

Outcome

Judgment entered in favour of the plaintiff with damages, interest and costs awarded

Facts

The plaintiff, a tea company, engaged the defendant freight forwarder to transport a consignment of tea valued at USD 49,700.16 from Uganda to Mombasa under a written agreement. The defendant collected the goods on 21 May 2017, loaded them on truck UAP 360X, then without the plaintiff's consent subcontracted the service to third parties. The consignment was transferred to truck UAZ 146B, cleared at Malaba border, but disappeared after entering Kenya and was never delivered. Kenya Revenue Authority concluded the goods had been dumped in Kenya and imposed a fine and VAT totalling KSh 895,636 (UGX 33,899,823), which the plaintiff was compelled to pay. The defendant failed to appear at trial and the matter proceeded exparte.

Issues

  1. Whether or not the defendant was in breach of the contract for forwarding and transportation services
  2. What remedies are available to the plaintiff for the breach

Orders

  • Defendant to pay USD 49,700 or its current equivalent in Uganda Shillings
  • Defendant to pay UGX 33,899,833
  • General damages of UGX 50,000,000
  • Interest on USD 49,700 at 6% per annum if in Dollars or 22% per annum if converted to Uganda Shillings from date of filing till payment in full
  • Interest on UGX 33,899,833 at 22% per annum from date of filing till payment in full
  • Interest on general damages at 6% per annum from date of judgment till payment in full
  • Costs of the suit to the plaintiff

Rules and key headnotes

Freight Forwarding — Carrier's Duty — Liability for Loss
A carrier who takes possession of goods for transport owes the consignor a chain of duties including carrying the goods safely, following the agreed route, and delivering to the correct destination. These duties are non-delegable and remain with the carrier even where the carrier subcontracts to third parties.
Assignment and Subcontracting — Requirement of Consent
Where a contract expressly prohibits assignment or transfer of rights and obligations without the written consent of the other party, a carrier who subcontracts performance without such consent breaches the contract and remains fully liable for non-performance by the subcontractor, regardless of due diligence in selecting the subcontractor.
Special Damages — Proof
Special damages must be specifically pleaded and strictly proved. Documentary evidence is preferred but cogent verbal evidence may suffice where the nature of the loss is established and valuation is supported by credible expert testimony.
Consequential Losses — Customs Penalties
Where goods are lost in transit due to the carrier's breach, causing the consignor to incur customs penalties and fines for failure to deliver within the prescribed transit period, such penalties are recoverable as special damages if actually paid and proved.
General Damages — Assessment — Commercial Loss
In assessing general damages for breach of a commercial contract, the court considers the loss of use of money, reputational harm from being delisted from an international auction, and potential business consequences, even where the claimant's overall business turnover remained undisturbed.
Interest — Commercial Rate — Business Ventures
Business ventures attract interest at commercial rates on the basis that businesses rarely operate without bank loans. Interest compensates the plaintiff for being kept out of money which the defendant has had the use of. Differential rates may apply to different heads of loss depending on the currency and nature of the deprivation.

Legislation cited (3)

  • East African Community Customs Management Regulations 2010 Regulation 104(4)
  • East African Community Customs Management Regulations 2010 Regulation 104(22)
  • East African Community Customs Management Regulations 2010 Regulation 104(23)

Cases cited (7)

  • Hajji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1996)
  • Kampala City Council vs Nakaye (1972) EA 446
  • Gapco (U) Ltd v A. S Transporters Ltd (Supreme Court Civil Appeal No. 7 of 2007)
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu & Anor (High Court Civil Suit No. 177 of 2003)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Harbutt's Plasticine Ltd vs Wayne Tank and Pump Co. Ltd [1970] QB 447

Full judgment

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

Kyamuhunga Tea Co. Limited v Daks Couriers Limited (Civil Suit No. 862 of 2017) [2019] UGCommC 19 (12 July 2019)
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.