Wakilii

Milton Obote Foundation v Kennon Trading Ltd (Civil Appeal 25 of 1995)

Supreme Court · [1996] UGSC 22 · 1996 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal to the Supreme Court from a High Court judgment in a suit for the price of goods sold and delivered
Decision
Appeal dismissed on the merits; decree varied to reduce interest from 12% to 5% per annum; judgment for the respondent for US $39,250 plus interest from 3 December 1985 affirmed as varied.

Observed later treatment

Cited — treatment unverified cited in 6 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 6 times with no adverse treatment recorded; not yet tested on the merits. Citations steady — 6 citing cases on record, 3 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The Supreme Court held that a party who places an order for goods (exh. SKV2) and undertakes to pay the price contracts as a principal and is liable, even if it also acted as agent for the UPC; delivery of the goods to a carrier appointed by the appellant constituted delivery to the appellant. The appeal on the merits — contract, delivery and agency — therefore failed. However, the trial judge erred in awarding 12% interest on the foreign-currency debt without any agreed or evidential basis. There being no justification on record for that rate, the court substituted the statutory rate of 5% per annum under s.26(2) of the Civil Procedure Act, running from the date the suit was filed. The appeal succeeded only on the rate of interest.

Outcome

Appeal dismissed on the merits; decree varied to reduce interest from 12% to 5% per annum; judgment for the respondent for US $39,250 plus interest from 3 December 1985 affirmed as varied.

Facts

In May 1983 the Uganda Peoples Congress (UPC) wished to acquire party materials — flags, book matches, calendars and caps. UPC officials, who were also officials of the appellant, the Milton Obote Foundation (MOF), negotiated with Sudhir Kumar Vidyarthi (P.W.1), an official of the respondent, Kennon Trading Ltd. The respondent issued a proforma invoice dated 16 May 1983 addressed to the appellant. By letter dated 20 May 1983 (exh. SKV2) on MOF letterhead, signed by John Wafula (Secretary, MOF), the appellant approved the purchase, confirmed the order, and undertook to remit the invoice amount within sixty days. The goods were delivered to a carrier appointed by the appellant in Nairobi and reached Kampala, where Trade Supplies Ltd subsequently handled them. The appellant did not pay. The respondent sued for the price of goods sold and delivered. The appellant contended that there was no valid contract, that the goods were not delivered to it, and that it had acted only as agent for the UPC, which was known to the respondent.

Issues

  1. Whether there was a valid contract between the appellant and the respondent.
  2. Whether the goods were delivered to or for the appellant.
  3. Whether the appellant contracted as a principal or merely as agent for the Uganda Peoples Congress, so as to escape liability.
  4. Whether the trial judge erred in awarding interest at 12% per annum on a sum recoverable in foreign currency, and what the appropriate rate and commencement date should be.

Orders

  • Appeal dismissed on the merits.
  • Decree of the trial court varied so that judgment is entered for the respondent (plaintiff) in the sum of US $39,250 with interest at 5% per annum from 3 December 1985 until payment in full.
  • Respondent awarded the costs of the lower court and four-fifths of the costs of the appeal.

Rules and key headnotes

Contract Law — Formation — Liability of party placing an order and undertaking payment
A party who places an order for goods and undertakes to pay the price contracts as a principal and is liable on the contract, even though it may also have acted as agent for a third party.
Commercial Law — Sale of Goods — Delivery to a carrier appointed by the buyer
Delivery of goods to a carrier appointed by the buyer constitutes delivery to the buyer under the Sale of Goods Act.
Damages & Quantum — Interest — Awards expressed in foreign currency
A court may award interest on a sum recoverable in foreign currency; the Currency Reform Statute 1987 contains no provision precluding such interest, being concerned with transactions in old and new currency, gold and silver.
Damages & Quantum — Interest — Judicial discretion, basis and statutory rate under the Civil Procedure Act
Where the rate of interest is not fixed by agreement, the award and rate of interest lie in the judicial discretion of the court and must be justified by reasons; absent evidence or submission justifying a particular rate and commencement date, the court should resort to s.26(2) of the Civil Procedure Act and award interest at 5% per annum from the date the suit was filed until payment in full.

Legislation cited (4)

Cases cited (4)

  • Frank (Textiles) Ltd. (No. 2) (1977) Q.B.
  • La Malta Drydocks Corporation (1977)
  • Attorney General vs. Oriental Construction Co. Ltd. (Civil Appeal No. [unclear] of 1991)
  • [...] Motors Ltd. (unreported)

Cases citing this judgment (6)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

Milton Obote Foundation v Kennon Trading Ltd (Civil Appeal 25 of 1995) [1996] UGSC 22 (19 June 1996)
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.