Wakilii

Mogas (U) Ltd v Benzina (U) Ltd (Civil Suit No. 88 of 2013)

High Court · [2017] UGCOMMC 92 · 2017 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 with counterclaim
Decision
Judgment for plaintiff with damages and costs; counterclaim dismissed

Observed later treatment

Cited — treatment unverified cited in 7 (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 7 times with no adverse treatment recorded; not yet tested on the merits. Citations fading — 8 citing cases on record, 8 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 High Court held that the defendant breached the contract to supply 1000 metric tons of bitumen by failing to deliver within the contractually stipulated time. The defendant's claim of frustration by sanctions on Iran was rejected as there was no contract to source goods specifically from Iran and the price terms were CIF Mombasa. The plaintiff was entitled to damages for breach of contract. The counterclaim was dismissed save that the plaintiff's advance payment of UGX 25,000,000 for taxes served as sufficient compensation to the defendant for the plaintiff's refusal to take delivery of a later partial consignment.

Outcome

Judgment for plaintiff with damages and costs; counterclaim dismissed

Facts

The plaintiff Mogas (U) Ltd, a petroleum products dealer, ordered 1000 metric tons of bitumen from the defendant Benzina (U) Ltd in February 2012 for immediate delivery. The plaintiff obtained a payment guarantee valid until 24 May 2012. The defendant failed to supply the bitumen within the stipulated time, citing sanctions on Iran and blockage of funds sent for procurement. The defendant claimed its bankers rejected the plaintiff's payment guarantee, but evidence showed the bank accepted the guarantee and only declined a loan application due to Iranian supply risk. The plaintiff sought alternative supplies from Emerald Energy Ltd in June 2012 and incurred additional costs. The defendant later imported a smaller consignment (5 containers, about 210 tonnes) in mid-2012, for which the plaintiff advanced UGX 25,000,000 for taxes, but subsequently refused to take delivery citing late supply, wrong quantity, and unforeseen charges. The defendant counterclaimed for loss of profit, storage charges, and price fluctuation losses.

Issues

  1. Whether the Defendant breached the contract of delivering bitumen entered into with the Plaintiff?
  2. Whether the Plaintiff is entitled to the remedies sought?
  3. Whether the Plaintiff/Counter-Defendant breached the contract executed with the Counterclaimant/Defendant?
  4. Whether the Counter-Defendant is entitled to the remedies sought?

Orders

  • The Plaintiff's suit succeeds.
  • The Defendant breached the contract to supply bitumen to the Plaintiff.
  • The Plaintiff is awarded special damages of USD 8,900.
  • The Plaintiff is awarded general damages of USD 15,600.
  • Interest on USD 8,900 is awarded at 10% per annum from 24th May 2012 to the date of judgment.
  • Further interest is awarded at 8% per annum from the date of judgment until payment in full.
  • The counterclaim is dismissed.
  • The counterclaimant is not entitled to costs.
  • Costs of the suit are awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Breach of Contract — Time of Performance
Where a contract for the supply of goods specifies that delivery is required 'immediately' and a payment guarantee is valid for 90 days, the word 'immediately' is construed to mean within the period of the guarantee, and failure to deliver within that time constitutes a breach of contract.
Contract Law — Frustration — Applicability to CIF Contracts
A CIF contract cannot be frustrated by the supplier's inability to obtain goods from a particular source where the contract does not specify that source, and the supplier's obligations are to ship the goods CIF to the agreed port regardless of the source of supply.
Contract Law — Frustration — Supervening Events Not Contemplated
Where a seller's bank warns of supply risk from a particular country due to sanctions, and the seller proceeds to source goods from that country and encounters difficulties, frustration cannot be pleaded because the risk was within the reasonable contemplation of the seller at the time of contracting.
Contract Law — Frustration — Statutory Provisions
Under section 66 of the Contracts Act 2010, where a contract becomes impossible to perform or is frustrated, the parties are discharged from further performance and any sum paid before discharge is recoverable as money received for the payer's use, while any sum payable ceases to be payable.
Contract Law — Payment Terms — Bank Guarantees
Where a contract provides for payment by bank guarantee acceptable to the seller's bank, the buyer fulfils this obligation when its bank issues a guarantee that is accepted by the seller's bank, and the seller's subsequent inability to obtain financing against that guarantee does not constitute breach by the buyer.
Damages & Quantum — Assessment of Damages — Breach of Supply Contract
Where a seller breaches a contract to supply goods and the buyer incurs costs in procuring a payment guarantee and seeking alternative supplies, the buyer is entitled to recover those costs as special damages. General damages for loss of profit may be awarded where the buyer establishes a reasonable profit margin on the transaction.

Legislation cited (6)

Cases cited (15)

  • Dada Cycles Ltd v Sofitra SPRL Ltd (Civil Suit No. 656 of 2005)
  • Ronald Kasibante v Shell Uganda Ltd (Civil Suit No. 542 of 2006)
  • Nakawa Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Stanbic Bank Uganda Ltd v Haji Yahaya Sekalega t/a Sekalega Enterprises (Civil Suit No. 185 of 2009)
  • Dr. Vincent Karuhanga t/a Friends Polyclinic v NIC & URA (Civil Suit No. 2002 of [year])
  • Bank of Uganda v Fred William Masaba & 5 others (Supreme Court Civil Appeal No. 3 of 1998)
  • Esso Petroleum Co. Ltd versus Mardon (1976) 2 ALLER
  • Krell vs. Henry [1903] 2 K.B. Page 740
  • Taylor versus Caldwell (1863) 3 B. & S 826
  • Fibrosa Spolka Akeyjna vs. Fairbairn Lawson Combe Barbour Ltd [1942] 2 All ER 122
  • Chandler versus Webster [1904] 1 KB 493
  • Tsakiroglou & Co. vs. Noblee & Thorl GmbH [1962] AC 93
  • Tsakiroglou & Co Ltd vs. Noblee & Thorl GmbH [1961] 2 All ER 179 HL
  • Scarf versus Jardine (1882) 7 App Cas 361
  • Kamins Ballroms Co Ltd vs. Zenith Investments (Torquay) Ltd [1970] 2 All ER 871

Cases citing this judgment (7)

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.

Mogas (U) Ltd v Benzina (U) Ltd (Civil Suit No. 88 of 2013) [2017] UGCommC 92 (5 September 2017)
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.