MTN Uganda Limited v GQ Saatchi & Saatchi Ltd (Civil Appeal No. 0098 of 2017)

Observed later treatment

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.

Holding

The Court of Appeal held that the appellant breached the contract by failing to give the required six months' written notice of termination, as the purported notice was given too late. However, since the agreement did not expressly provide for payment in lieu of notice, the Court set aside the award of six months' remuneration in lieu of notice and its interest, finding the trial Judge wrongly implied such a term by reference to post-breach conduct. The Court upheld the 3% agency commission award based on the parties' established course of dealing, the third-party claims award, the general damages award, and the 20% interest on commission. The appeal succeeded only in part.

Outcome

Appeal partly allowed; award in lieu of notice set aside, remaining awards upheld

Facts

The parties concluded an advertising services agreement on 1 June 2009, running from 1 March 2009 for two years to 28 February 2011, extended by addendum to 31 March 2011, after which it expired with no renewal. Clause 3.2 required the appellant to give six months' written notice in the event of termination by effluxion of time. The respondent claimed several payments allegedly owing on termination and, after attempted out-of-court settlement failed, sued for breach of contract. The High Court (Commercial Division) entered judgment for the respondent, awarding sums for six months' payment in lieu of notice, 3% agency commission, third-party claims of USD 19,559, and general damages of Ug. Shs. 30,000,000, with interest. The respondent's entitlement to 3% agency commission was not expressly stated in the contract but reflected the parties' practice over roughly ten years of prior dealings, by which the respondent received the 3% excess over the 15% commission the appellant retained. The appellant appealed against these awards.

Issues

1. Whether the appellant breached clause 3.2 of the advertising agreement by failing to give written notice of termination.
2. Whether the trial Judge erred in awarding six months' payment in lieu of notice where the contract did not expressly provide for it.
3. Whether the respondent was entitled to 3% agency commission based on the parties' previous course of dealing.
4. Whether the interest rate of 20% per annum was harsh and should be set aside.
5. Whether the award of general damages with interest was justified.

Orders

• The award of Ug. Shs. 559,498,887/= as remuneration in lieu of six months' notice, together with interest thereon, is set aside.
• The award of Ug. Shs. 448,864,384/= as 3% agency commission with interest at 20% per annum from 28th February 2011 till payment in full is upheld.
• The award of US Dollars 19,559.39 relating to third-party payments is upheld.
• The award of Ug. Shs. 30,000,000/= as general damages with interest at court rate from the date of the lower court judgment until payment in full is upheld.
• The respondent shall be paid 2/3 of the costs of the appeal and the entirety of the costs of the proceedings in the court below.

Rules and key headnotes

Legislation cited (2)

• Civil Procedure Act, Cap. 71 s.26(2)
• Judicature (Court of Appeal Rules) Directions S.113-10 r.30(1)(a)

Cases cited (31)

• Ronald Kasibante v Shell (U) Ltd (Civil Suit No. 542 of 2006)
• Bensten vs. Taylor Sons & Co. (1893) 2 QB
• Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
• Sitenda Sebalu v Sam K. Njuba & Another (Election Petition Appeal No. 26 of 2007)
• Hunt v Luck [1901] 1 Ch 45
• Stockloser v Johnson [1954] 1 All ER 630
• Jacobs v Batavia & General Plantations Trust Ltd [1924] 1 Ch 287
• Walsh v Trevanion (1850) 15 QB 733
• Nipun Norratam Bhatia v Crane Bank Ltd (Civil Appeal No. 75 of 2006)
• Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32
• The Medina [1900] AC 113
• Constantine v Imperial London Hotels Ltd [1944] All ER 171
• Holwell Securities v Hughes [1974] 1 All ER 161
• Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900
• McCutcheon v David MacBrayne Ltd [1964] 1 All ER 430
• X-Procure Software SA (Pty) Limited vs. Sutherland Terry Linda, Case No. 882 of 2013
• Hadley v Baxendale [1854] EWHC J70
• Uganda v George Wilson Simbwa (Criminal Appeal No. 37 of 2005)
• Wood v Capita Insurance Services Ltd [2017] UKSC 24
• Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC 72
• Geys v Societe Generale [2013] 1 AC 523
• The Moorcock (1889) 14 PD 64
• Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206
• BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 52 ALJR 20
• Phillips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472
• Equitable Life Assurance Society v Hyman [2002] 1 AC 408
• Attorney General of Belize v Belize
• Attorney General v Virchand Mithalalal & Sons Ltd (Civil Appeal No. 20 of 2007)
• Sietco v Noble Builders (U) Ltd (Civil Appeal No. 31 of 1995)
• Omunyokol Akol Johnson v Attorney General (Civil Appeal No. 06 of 2012)
• Crown Beverages Ltd v Sendu Edward (Civil Appeal No. 01 of 2005)

Cases citing this judgment (3)

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.

• Muyambi v Vivo Energy Uganda Limited (Civil Suit 112 of 2019)
• Naren Mehta v Gids Consult Limited and Another (Civil Suit No. 191 of 2016)
• Isingoma (administrator of the estate of late manyindo nkoba) v Registered Trustees of the church of Uganda and Another (HCT-01-CV-CS 35 of 2017)

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