Wakilii

M/s Dembe Enterprises V M/s Transami (U) Ltd & Anor (Civil Suit No. 375 of 1993)

High Court · [1994] UGHC 5 · 1994 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 arising from transportation services
Decision
Judgment entered for the plaintiff with payment ordered in foreign currency or local currency equivalent at time of payment

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that an oral contract existed between the plaintiff transportation company and the first defendant, whereby the plaintiff would transport 75 containers from Mombasa to Kampala at US $1,250 per container. Both defendants were found jointly liable for breach by non-payment. Applying Miliangos v George Frank, the court ordered payment in US dollars or equivalent Uganda or Kenya shillings at the market rate prevailing at the time of payment (not at breach date), departing from the earlier breach-date conversion rule. The plaintiff was awarded US $93,750 plus nominal damages of Shs 200,000, interest, and costs. Punitive damages were refused as not pleaded and not an exceptional case.

Outcome

Judgment entered for the plaintiff with payment ordered in foreign currency or local currency equivalent at time of payment

Facts

The plaintiff company, Dembe Enterprises Ltd, was approached by the General Manager of the first defendant, Transami (U) Ltd, to transport imported goods from Mombasa to Kampala. The parties entered into an oral agreement whereby the plaintiff would handle transportation from Mombasa to Kampala at US $1,250 per 20-foot container, while the first defendant would handle overseas shipping and clearing at Mombasa. Between 1990 and 1992, the plaintiff transported 75 containers on behalf of the defendants. Despite repeated demands for payment, the defendants failed to pay the agreed amount. The second defendant, Transami (K) Ltd, offered to pay Shs (K) 30,000 per container, which the plaintiff rejected. The first defendant contended it was wrongly sued and that the contract was with the second defendant. The second defendant argued the suit should have been filed in Kenya where Transami (K) was based.

Issues

  1. Whether there was a contract between the plaintiff with either of the defendants.
  2. If there was a contract, what were the terms of the contract between the plaintiff and either defendant.
  3. Whether there was a breach of the said contract.
  4. Who is liable for the breach.
  5. What is the quantum of damages and in what currency.

Orders

  • The defendants to pay the plaintiff US $93,750 or its equivalent at market rate in Uganda or Kenya shillings at the time of payment.
  • Nominal damages of Shs 200,000.
  • Interest at court rate on (1) and (2) above from the date of judgment until payment in full.
  • Costs of the suit.

Rules and key headnotes

Contract Law — Oral Contracts — Formation and Proof
An oral contract is enforceable where the party asserting its existence provides credible testimony of agreement on essential terms that is not seriously challenged or controverted by the defendant.
Civil Procedure — Jurisdiction — Place of Performance
Under section 15(3) of the Civil Procedure Act, in suits arising out of contract, a cause of action arises at the place where the contract was made, where it was to be performed or performance completed, or where money was expressly or impliedly payable. Where a contract involves performance in multiple jurisdictions, the plaintiff may bring suit in any jurisdiction where a limb of section 15(3) is satisfied.
Contract Law — Privity — Internal Arrangements Between Related Companies
Where a plaintiff contracts with one company in good faith, the plaintiff is not affected by internal arrangements between that company and related entities of which the plaintiff had no knowledge. The plaintiff is entitled to hold the contracting party liable regardless of subsequent attempts to shift liability to a related entity.
Damages & Quantum — Foreign Currency Judgments — Conversion Rate
Following Miliangos v George Frank (Textiles) Ltd [1976] AC 443, where a contract is denominated in foreign currency, judgment should be given in that foreign currency or its equivalent in local currency at the market rate prevailing at the time of payment (enforcement), not at the date of breach. This rule reflects modern commercial realities and compensates the plaintiff for being kept out of his money until enforcement.
Damages & Quantum — Breach of Contract — Nominal Damages
Where a plaintiff claims general damages for loss arising from breach of contract but fails to adduce sufficient evidence to prove the alleged loss, the court may award nominal damages in recognition of the breach.
Damages & Quantum — Exemplary Damages — Contract Claims
Exemplary or punitive damages are not ordinarily available for breach of contract. Such damages may be awarded only in exceptional cases (such as where the plaintiff's reputation is damaged) and must be specifically pleaded. General allegations of financial prejudice from delayed payment do not satisfy the threshold for exemplary damages in contract.

Legislation cited (2)

Cases cited (10)

  • Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528
  • M/S Spear Motors Ltd v H/S Banyakole Kweterana Growers Cooperative Union (Civil Appeal No. 7 of 1991)
  • Owners of Steamship Celia v Owners of Steamship Volturno [1921] 2 AC 544
  • United Railways of the Havana and Regla Warehouses Ltd [1960] ALLER 32
  • Syndic in Bankrptcy of Nasaral Khoury v Khayat ALL ER 406
  • Miliangos v George Frank (Textiles) Ltd [1976] AC 443
  • ESSO Standard (U) Ltd v Semu Amanu Opio (Civil Appeal No. 3 of 1993)
  • Kalema v Attorney General (High Court Civil Suit No. 103 of 1990)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Lukwgo vs. Attorney General . 1156/1988

Full judgment

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

M_s Dembe Enterprises V M_s Transami (U) Ltd & Anor (Civil Suit No. 375 of 1993) [1994] UGHC 5 (25 February 1994)
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.