Wakilii

Nassaf Uganda Ltd v Razco Ltd & Anor (Civil Suit No. 827 of 2014)

High Court · [2015] UGCOMMC 295 · 2015 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 ex parte after substituted service
Decision
Judgment entered for the plaintiff against the defendants jointly and severally for breach of contract with damages and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court found that the defendants materially breached a stone-crushing subcontract by providing defective machinery that repeatedly broke down, resulting in the plaintiff incurring substantial expenses and ultimately losing the main contract. Special damages of USD 175,256.91 and UGX 31,083,315 were awarded based on proven expenses for transportation, salaries, and spare parts. General damages of USD 76,000 were awarded representing lost profits. Interest on special damages was awarded at the commercial lending rate and 6% per annum on general damages.

Outcome

Judgment entered for the plaintiff against the defendants jointly and severally for breach of contract with damages and costs

Facts

Nassaf Uganda Ltd contracted with Traminco SPRL on 7 January 2013 to crush stone aggregate totalling 19,000 cubic meters for road construction in Goma, DRC. On 9 January 2013, Nassaf subcontracted Razco Ltd and Ziv Raz to provide a mobile stone crusher and crash the required stone quantity over five months. Nassaf paid USD 10,000 advance, USD 58,000 for machinery transportation from Tanzania to Goma, and approximately UGX 3,000,000 for staff transport and border fees. The defendants' machinery repeatedly broke down. Nassaf paid approximately USD 33,379 in salaries to the defendants' employees and approximately USD 90,000 for spare parts purchased from Kampala, Goma, UK, and South Africa to keep the equipment operational. Despite these expenditures exceeding the contract value, the defendants failed to deliver the contracted stone quantity. In August 2013, Nassaf ceased further payments. The defendants' unpaid staff reported to Goma police and Nassaf paid USD 14,640 to prevent seizure of machinery. Traminco ultimately terminated the main contract.

Issues

  1. Whether there was a contract between the parties.
  2. Whether there was breach of contract by the Defendants.
  3. Whether the Plaintiff is entitled to the remedies sought.

Orders

  • Special damages of USD 175,256.91 and UGX 31,083,315 awarded to the plaintiff.
  • Interest on special damages awarded at the rate of commercial lending rate per annum from the date of judgment until payment in full.
  • General damages of USD 76,000 awarded to the plaintiff.
  • Interest on general damages awarded at the rate of 6% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff.
  • Judgment entered against the defendants jointly and severally.

Rules and key headnotes

Contract Law — Material Breach — Defective Performance Affecting Contract Benefit
A material breach is a breach that has a serious effect on the benefit that the innocent party would otherwise have derived from the contract, including failure to provide equipment in proper working condition that prevents fulfilment of contract obligations.
Damages & Quantum — Special Damages — Proof Requirements — Strict Proof
Special damages must be strictly proved though they need not be supported by documentary evidence in all cases, and cannot be recovered unless specifically claimed and proved or unless the best available particulars have been communicated to the party against whom it is claimed before trial.
Damages & Quantum — General Damages — Assessment Principles — Restitutio in Integrum
General damages are awarded at the discretion of the court and the principle in assessing damages is that the plaintiff should be put back in the same position they were before the breach, with courts guided by the value of the subject matter, the economic inconvenience caused, and the nature and extent of the breach.
Contract Law — Damages for Breach — Lost Profits — Recovery as General Damages
Where breach of contract causes loss of a main contract and expected profits, the estimated loss of profits may be awarded as general damages for the loss of contract and inconvenience suffered, taking into account means of remedying the inconvenience that existed.
Damages & Quantum — Interest on Damages — Commercial Transactions — Rate Differentiation
A distinction must be made between an award arising out of a commercial transaction, which normally attracts a higher interest rate, and an award on general damages which are merely compensatory and attract a lower rate.
Civil Procedure — Ex Parte Proceedings — Burden of Proof — Plaintiff's Duty
Despite that a case proceeds ex parte after substituted service, the burden of proof remains on the plaintiff to prove its case on the balance of probabilities.

Legislation cited (4)

Cases cited (12)

  • Mutekanga v Equator Growers (U) Ltd [1995-1998] EA 205
  • Nakawa Trading Co v Coffee Marketing Board (HCC 137 of 1991)
  • Wild Cheetah Tours and Travel v Amos Nsubuga (HCCS 603 of 2003)
  • National Power PLC vs. Limited Gas Co. Ltd and Another [1998] AU ER (D) 231
  • Uganda Telecom Ltd v Tanzanite Corporation (SCCA 17 of 2004)
  • Kyambadde v Mpigi District Administration [1983] HCB 44
  • Storms v Hutchinson [1905] AC 515
  • Uganda Revenue Authority v Wanume David Kitamirke (CACA 43 of 2010)
  • Kamugisha v National Housing & Construction Corporation (HCCS 127 of 2008)
  • QB Kitara Malmot t/a Oneya Supplies Ltd v Catholic Relief Services (CRS) Uganda (HCCS 121 of 2001)
  • Star Supermarket (U) Ltd v Attorney General (CACA 34 of 2008)
  • Jennifer Behanga and two Others v School Outfitters (CACA 53 of 1999)

Full judgment

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

Nassaf Uganda Ltd v Razco Ltd & Anor (Civil Suit No. 827 of 2014) [2015] UGCommC 295 (9 November 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.