Wakilii

Nakawa Market Vendors Association Ltd v Kampala Capital City Authority (High Court Civil Suit No. 135 of 2010)

High Court · [2015] UGCOMMC 154 · 2015 Judgment for Plaintiff — Refund Ordered AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for declaration and specific performance of a tender contract
Decision
Plaintiff entitled to refund of all payments made towards the tender but not entitled to enforce management rights due to absence of a signed contract.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The plaintiff was awarded a tender to manage Nakawa Market in 2008 by Kampala City Council, and paid advance fees and a performance bond. The defendant terminated the arrangement and took over market management in 2011. The court found that while the tender was awarded to the plaintiff and it complied with tender requirements, no written contract was ever executed between the parties as required by the tender conditions and the Public Procurement and Disposal of Public Assets Act. Without a signed contract, the plaintiff could not enforce management rights. The court ordered the defendant to refund all monies paid by the plaintiff.

Outcome

Plaintiff entitled to refund of all payments made towards the tender but not entitled to enforce management rights due to absence of a signed contract.

Facts

In 2007, Kampala City Council advertised a tender for the management of Nakawa Market. Nakawa Market Vendors Association Ltd, a registered company, applied and was awarded the tender on 26 March 2008. The plaintiff accepted the award and paid an advance of Shs. 42,000,000 and obtained a performance bond of Shs. 17,892,000. A dispute arose between the plaintiff company and an unregistered group called Nakawa Market Vendors Association regarding who had been awarded the tender. The dispute was resolved by consent judgment in HCCS No. 204 of 2008 recognizing the plaintiff as the rightful awardee. However, Kampala City Council never handed over management of the market to the plaintiff. In 2011, following security concerns and recommendations by the Deputy RDC, the defendant (now KCCA, having succeeded KCC) took over direct management of the market. The plaintiff brought this suit seeking a declaration that it was the rightful winner of the tender and orders for handover of the market.

Issues

  1. Whether the termination of the plaintiff's tender was lawful and justified.
  2. Whether the plaintiff should be allowed to manage Nakawa Market in accordance with the tender awarded to it by Kampala City Council on 26 March 2008.
  3. What remedies are available to the parties.

Orders

  • The defendant to refund to the plaintiff the performance bond of Shs. 17,892,000 and the advance payment of Shs. 42,000,000.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Contract Law — Formation of Contract — Essential Elements — Requirement of Written Contract
Where a tender award requires the execution of a written contract between the parties as one of its express conditions, and the Public Procurement and Disposal of Public Assets Act applies to the procurement, the absence of a signed written contract means no enforceable contractual relationship arises between the parties, regardless of whether a tender award letter was issued and consideration paid.
Contract Law — Implied Contracts — Requirements for Implication from Correspondence and Conduct
Under Order 6 rule 15 of the Civil Procedure Rules, a contract may be implied from a series of letters, conversations or circumstances without setting them out in detail, provided the essential elements of offer, acceptance and consideration are established. However, where the parties' own agreement expressly requires a signed written contract, the court will not imply a contract in the absence of that formality.
Administrative Law — Public Procurement — Tender Awards — Authority to Terminate
Under the Public Procurement and Disposal of Public Assets Act 2003 and the Local Governments (Public Procurement and Disposal of Public Assets) Regulations 2006, a procuring entity retains the power to cancel a tender award that has not matured into a binding contract, particularly where no written contract has been executed and there are security or operational concerns affecting the subject matter of the tender.
Administrative Law — Public Procurement — Cancellation of Tender — Duty to Refund Bid Security
Regulation 57(4) of the Local Governments (Public Procurement and Disposal of Public Assets) Regulations 2006 requires that in all cases of cancellation of the bid procedure, the procurement unit shall inform the bidders who are still bound by their bids and immediately release their bid security. Where a tender award is cancelled before a contract is executed, the procuring entity must refund all payments made by the bidder including advance payments and performance bonds.
Contract Law — Admissions — Effect of Admissions in Scheduling Conference
Under Order 15 rule 1 of the Civil Procedure Rules, parties are bound by facts agreed during a scheduling conference. Such agreed facts form part of the evidence on record and are to be evaluated along with other evidence. Where material facts are admitted during scheduling, they need not be proved at trial and neither party may depart from such admissions except upon formal amendment.
Administrative Law — Local Government — Transfer of Liabilities — Kampala Capital City Authority Act
Upon the establishment of Kampala Capital City Authority under the Kampala Capital City Authority Act No. 1 of 2011, KCCA succeeded to all the rights, obligations, liabilities and assets of the former Kampala City Council. This succession includes liability to refund monies received by KCC in respect of tender awards that were subsequently cancelled.

Legislation cited (11)

Cases cited (14)

  • Kigule and others v Attorney General [2005] 1 EA
  • Kayondo v Co-operative Bank (Civil Appeal No. 10 of 1991)
  • Orient Diary v D'souza (1948) 23 KLR 4
  • Jan Mohammed Umedin v Hussein Amasni (1953) 20 EACA 41
  • Ports Freight Service (U) Ltd v Julius Kamanyi (High Court Civil Suit No. 409 of 1995)
  • Administrator General v Bwanika James and others (Supreme Court Civil Appeal No. 7 of 2003)
  • Margret Kato v Nulu Naluwoga (Civil Appeal No. 3 of 2013)
  • Struggle (U) Ltd v Pan African Insurance Co. Ltd [1990] KALR 464
  • J.K. Patel v Spear Limited (Supreme Court Civil Appeal No. 4 of 1991)
  • Carlile v Carbolic Smoke Ball Co. [1891-94] All ER 127
  • Subramanian v Public Prosecutor [1956] WLR 965
  • Myers v DPP [1964] 2 All ER 881
  • Tenywa v Uganda [1967] EA 102
  • CHOGM Tour Agents 2007 Ltd v Masaka Municipal Council (Civil Appeal No. 7 of 2010)

Full judgment

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

Nakawa Market Vendors Association Ltd v Kampala Capital City Authority (High Court Civil Suit No. 135 of 2010) [2015] UGCommC 154 (6 May 2015)
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.