Wakilii

Muyambi v Vivo Energy Uganda Limited (Civil Suit 112 of 2019)

High Court · [2023] UGCOMMC 90 · 2023 Judgment for Plaintiff — Breach Declared AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract following termination of a retail business agreement
Decision
Judgment entered for the Plaintiff with a declaration of breach, general damages, interest, and costs

Observed later treatment

Cited — treatment unverified cited in 1 (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 1 time with no adverse treatment recorded; not yet tested on the merits. 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's termination of the retail business agreement under clause 16.15 was valid and did not breach the contract, as the termination clause permitted either party to terminate without reason upon 30 days' written notice. However, the defendant breached clauses 16.6.1 and 16.6.2 by failing to conduct a proper reconciliation and handle goods at the select shop appropriately upon termination. The court rejected the plaintiff's claim that good faith and fair dealing were implied terms requiring the defendant to provide reasons for termination. General damages of UGX 50,000,000 were awarded for economic inconvenience and emotional distress caused by the defendant's breach.

Outcome

Judgment entered for the Plaintiff with a declaration of breach, general damages, interest, and costs

Facts

On 5 September 2016, the plaintiff entered into a three-year Retail Business Agreement with the defendant to operate a Shell petrol station at Entebbe. The plaintiff injected UGX 300,000,000 as working capital before signing the agreement on 26 September 2016. The plaintiff operated the station and received performance awards from the defendant. On 6 February 2019, the defendant served notice of termination under clause 16.15 of the agreement, effective 7 March 2019, without providing reasons. The plaintiff pleaded for more time but was evicted on 14 June 2019. The plaintiff alleged that no proper reconciliation of assets and liabilities was conducted, and he lost perishable goods and failed to recover costs of unperishable goods. The defendant contended that the plaintiff's working capital had run down and he never reinvested, and that the termination clause permitted termination without reason upon 30 days' written notice.

Issues

  1. Whether the suit is proper before this Court?
  2. Whether the rejoinder is proper before Court?
  3. Whether the Retail Business Agreement, and or clause 16.15 of the Retail Agreement was unconscionable against the Plaintiff?
  4. Whether the Defendant's action of terminating the Retail Business Agreement amounted to breach of contract?
  5. Whether the termination of the Retail Business Agreement was against fair dealings and was not done in good faith?
  6. What remedies are available to the parties?

Orders

  • A declaration that the Defendant breached the contract.
  • General damages of UGX 50,000,000 (Uganda Shillings Fifty Million only).
  • Interest on general damages at the rate of 8% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Termination Clauses — Validity of Termination for Convenience Without Reason
A contractual termination clause permitting either party to terminate without reason upon written notice is valid and enforceable, and the court will not interfere with a party's exercise of its contractual right to terminate provided the notice requirements are satisfied.
Contract Law — Implied Terms — Good Faith and Fair Dealing in Termination Clauses
In the absence of statutory provisions, courts will not imply terms of good faith and fair dealing into termination for convenience clauses where express termination provisions exist, and the party seeking to imply such terms must prove that the implied term is reasonable, necessary for business efficacy, obvious, capable of clear expression, and does not contradict express terms.
Civil Procedure — Pleadings — Departure from Pleadings and Introduction of New Claims
A party cannot introduce a new ground of claim or allegation of fact inconsistent with previous pleadings except by way of amendment, and failure to plead a claim such as unconscionability in the plaint constitutes a departure from pleadings that contravenes procedural rules and deprives the opposing party of the right to respond.
Contract Law — Breach of Contract — Failure to Perform Express Obligations Upon Termination
While termination of a contract in accordance with an express termination clause does not itself constitute breach, failure by a party to perform express obligations governing reconciliation and handling of goods upon termination amounts to breach of the contract.
Contract Law — Damages — Assessment of General Damages for Breach
In assessing general damages for breach of contract, the court considers the value of the subject matter, the economic inconvenience suffered by the plaintiff, and the nature and extent of the injury, including mental anguish and emotional distress caused by the defendant's breach.

Legislation cited (9)

Cases cited (20)

  • Charles Athembu v Commercial Microfinance Limited and Another (HCMA No. 0001 of 2014)
  • Interfreight Forwarders (U) Ltd v East African Development Bank (SCCA No. 33 of 1992)
  • John Sekaziga and Another v Church Commissioners Holding Co. Ltd (HCMC No. 15 of 2013)
  • Questar Builders Inc Vs CB Flooring LLC
  • MSC Mediterranean Shipping Company S.A v Cottonex Anstalt [2016] EWCA Civ 789
  • Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and Another [2015] UKSC 72
  • MTN Uganda Ltd v GQ Saatchi and Another (Civil Appeal No. 0098 of 2017)
  • Geys v Societe Generale [2013] 1 AC 523
  • BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 52 ALJR 20
  • Jovelyn Barugahare v Attorney General (SC Civil Appeal No. 28 of 1993) [1994] KALR 190
  • Behange v School Outfitters (U) Ltd (2000) 1 EA 20
  • Barclays Bank of Uganda Limited v Howard Bakojja (HCCS No. 53 of 2011)
  • Nakawa Trading Co. Ltd v Coffee Marketing Board (HCCS No. 137 of 1991) [1994] 11 KALR 15
  • Kyambadde v Mpigi District Administration [1983] HCB 44
  • Bonham-Carter v Hyde Park Hotel [1948] 64 TLR 177
  • Ronald Kasibante v Shell (U) Limited (HCCS No. 542 of 2006)
  • Storms v Hutchinson [1905] AC 515
  • Crown Beverages Ltd v Sendu Edward (SC Civil Appeal No. 1 of 2005)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Uganda Development Bank v Muganga Construction Co. Ltd (1981) HCB 35

Cases citing this judgment (1)

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.

Muyambi v Vivo Energy Uganda Limited (Civil Suit 112 of 2019) [2023] UGCommC 90 (9 August 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.