Wakilii

Muhamed v Musiwa (Civil Suit 71 of 2023)

High Court · [2025] UGHC 19 · 2025 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Summary suit for recovery of debt following default judgment
Decision
Judgment entered in favour of the Plaintiff with orders for refund of principal, interest, general damages, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the defendant breached a loan agreement by failing to repay UGX 500,000,000 advanced by the plaintiff in November 2021, despite extensions granted. The breach entitled the plaintiff to compensation under the Contracts Act s.61(1). The defendant was ordered to refund the principal sum with 10% interest per annum from the date of default, plus general damages of UGX 10,000,000 for inconvenience caused, and costs.

Outcome

Judgment entered in favour of the Plaintiff with orders for refund of principal, interest, general damages, and costs

Facts

On 15 November 2021, the plaintiff advanced a loan of UGX 500,000,000 to the defendant, repayable by 15 May 2023, secured by a certificate of title for leasehold land in Mbale. The defendant failed to repay by the due date. On 6 May 2023, the parties entered into a memorandum of understanding extending the repayment period to 16 June 2023 in two instalments, but the defendant again defaulted. Summons in a summary suit were served on the defendant on 19 December 2023. The defendant did not seek leave to file a defence, and default judgment was entered on 15 March 2024. The matter proceeded to formal proof.

Issues

  1. Whether there is a breach of contract?
  2. Whether the Defendant is indebted to the Plaintiff?
  3. What remedies are available to the parties?

Orders

  • The Defendant is ordered to refund the Plaintiff UGX 500,000,000 (Five hundred million shillings) within 30 days from the date of this judgment.
  • The Plaintiff is awarded 10% interest per annum on the principal sum from the month of default to payment in full.
  • The Plaintiff is awarded general damages of UGX 10,000,000 (Ten million shillings).
  • Costs are awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Breach of Contract — Definition and Elements
Breach of contract denotes a violation of a contractual obligation, either by failing to perform one's own promise or by interfering with another party's performance, and is occasioned by non-performance or repudiation or both.
Contract Law — Breach of Contract — Failure to Repay Loan
Where a defendant commits to repaying a loan by a specified date and fails to honor that obligation despite extensions and memoranda of understanding, such failure constitutes a breach of contract.
Contract Law — Remedies for Breach — Right to Compensation
Under the Contracts Act s.61(1), where there is a breach of contract, the party who suffers the breach is entitled to receive compensation from the breaching party for any loss or damage caused.
Damages & Quantum — Contractual Damages — Measure of Damages
Damages for breach of contract should be such as may fairly and reasonably be considered as arising naturally from the breach according to the usual course of things, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach.
Damages & Quantum — Interest on Debt — Contractual Entitlement
Where a memorandum of understanding stipulates that the defaulting party shall be liable for interest on the outstanding amount at the prevailing market rate in the event of default, the court may award interest on the principal sum from the date of default to payment in full.
Damages & Quantum — General Damages — Inconvenience and Costs
A defendant who breaches a loan agreement may be ordered to compensate the plaintiff in general damages for inconveniences caused by the breach, in addition to refunding the principal sum and paying interest.
Civil Procedure — Summary Suit — Default Judgment
Where a defendant is served with summons in a summary suit and does not seek leave of court to file a written statement of defence, a default judgment may be entered and the matter set down for formal proof.

Legislation cited (2)

Cases cited (4)

  • Amadi v National Insurance Corporation of Nigeria Ltd (2020) 15 NWLR (Pt. 1748) 465
  • Ronald Kasibante v Shell Uganda Ltd (HCCS No. 542 of 2006)
  • Kabona Brothers Agencies v Uganda Metal Products & Enameling Co Ltd [1981-82] HCB 74
  • Hadley v Baxendale [1843-1860] ALLER 461

Full judgment

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

Muhamed v Musiwa (Civil Suit 71 of 2023) [2025] UGHC 19 (22 January 2025)
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.