Wakilii

Muganyizi v 3 AT 1 Business Center Limited & Another (Civil Suit 776 of 2021)

High Court · [2023] UGCOMMC 283 · 2023 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, heard exparte after defendants failed to file defence
Decision
Judgment entered for plaintiff for UGX 78,529,000 to be paid jointly and severally by the defendants upon full payment of contract sum by Ministry of Water and Environment, with costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that where parties freely entered into a memorandum of understanding for equal sharing of proceeds from a government procurement contract, the defendants were bound by their undertaking to pay the plaintiff his agreed share of UGX 78,529,000 upon receipt of payment from the Ministry. General damages were declined as the full contract sum had not yet been paid by the Ministry, meaning the plaintiff's entitlement had not yet crystallised under the agreement's express terms.

Outcome

Judgment entered for plaintiff for UGX 78,529,000 to be paid jointly and severally by the defendants upon full payment of contract sum by Ministry of Water and Environment, with costs

Facts

In October 2020, the 2nd defendant informed the plaintiff that his company, the 1st defendant, was the successful bidder for supply of survey equipment to the Ministry of Water and Environment worth UGX 157,058,000. The 2nd defendant requested the plaintiff contribute half the procurement cost (USD 6,750 and UGX 5,000,000) on the understanding they would share the contract price equally upon payment. The parties executed a memorandum of understanding on 23 October 2020. A bank account was opened with two signatories: the 2nd defendant and the plaintiff's representative. The plaintiff advanced the agreed funds. The Ministry paid UGX 80,000,000 in April 2021 and UGX 69,072,000 in December 2021 to the 1st defendant, but to a different account than agreed. The defendants refused to pay the plaintiff his share despite receiving payment.

Issues

  1. Whether the defendants are indebted to the plaintiff to the sum of UGX 78,529,000.
  2. What remedies are available to the parties?

Orders

  • Declaration that the plaintiff is entitled to UGX 78,529,000 out of the contract sum for the procurement and supply of a Global Navigation Satellite System to the Ministry of Water and Environment under Reference No. MWE/WSDF-SWSPLS/20-21/00002 under the memorandum of understanding dated 23 October 2020.
  • Order directing the defendants jointly and severally to pay to the plaintiff UGX 78,529,000 as the sum due under the memorandum of understanding upon payment of the total contract sum by the Ministry.
  • General damages declined.
  • Interest at 20% per annum declined.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Contract Law — Enforcement of Agreements — Sanctity of Contractual Terms
Where parties have freely negotiated and concluded a contract, the court will hold them to their bargain and will not intervene by substituting terms contrary to those which the parties have agreed upon themselves, absent vitiating factors.
Contract Law — Breach of Contract — Entitlement to Payment Upon Condition Precedent
Where parties agree that payment shall be made upon receipt of a specified sum, the obligation to pay does not crystallise until the full specified sum has been received, and claims for non-payment are premature if the condition precedent has not been satisfied.
Damages — General Damages — Direct and Natural Consequences
General damages are recoverable only where they are the direct, natural or probable consequence of the breach complained of. Where the alleged damage does not arise directly from the defendant's conduct but from non-fulfilment of a condition precedent, general damages will not be awarded.
Civil Procedure — Exparte Proceedings — Effect of Failure to Defend
Where a defendant is duly served with summons to file a defence but defaults, and the suit is set down for hearing exparte under Order 9 rule 11(2) of the Civil Procedure Rules, the plaintiff's uncontested claims in the plaint and witness statement remain unchallenged and may be relied upon by the court.

Cases cited (1)

  • Stockloser v Johnson [1954] 1 All ER 630

Full judgment

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

Muganyizi v 3 AT 1 Business Center Limited & Another (Civil Suit 776 of 2021) [2023] UGCommC 283 (28 March 2023)
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.