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Nirma International Ltd v Jaribu Credit (U) Traders Ltd (Civil Suit No. 88 of 2009)

High Court · [2014] UGCOMMC 36 · 2014 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of debt arising from dishonoured cheques for motorcycles supplied on credit
Decision
Judgment for the Plaintiff with special damages, general damages, interest, and costs awarded

Observed later treatment

Cited — treatment unverified cited in 2 (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 2 times 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 dishonoured cheques constitute unconditional promises to pay and entitle the holder to judgment for the face value. The Plaintiff proved supply of motorcycles and issuance of post-dated cheques that were stopped by the Defendant. The court awarded special damages of UGX 189,086,000, general damages of UGX 55,000,000, and interest.

Outcome

Judgment for the Plaintiff with special damages, general damages, interest, and costs awarded

Facts

The Plaintiff, a TVS motorcycle wholesaler, appointed the Defendant as its dealer in August 2008. Between August 2008 and January 2009, the Plaintiff supplied motorcycles worth UGX 412,436,000 to the Defendant on credit terms, with payment by post-dated cheques. The Defendant made partial payment of UGX 223,350,000, but cheques totalling UGX 189,086,000 were dishonoured with payment stopped. The managing director of the Defendant withdrew funds in cash and left for Kenya. Despite a warrant of arrest issued by Buganda Road Court, the Defendant's directors disappeared and could not be located. The Plaintiff's business collapsed as a result of the non-payment. The matter proceeded ex parte after the Defendant's advocates withdrew and the Defendant failed to appear despite substituted service.

Issues

  1. Whether the Defendant was liable for payment on dishonoured cheques issued for motorcycles supplied by the Plaintiff.
  2. What remedies and quantum of damages are appropriate for breach of contract to pay for goods supplied.

Orders

  • The Plaintiff is awarded Uganda shillings 189,086,000/= as special damages.
  • The award of special damages shall carry interest at a reasonable commercial rate of 17% per annum from June 2009 up to the date of judgment.
  • The Plaintiff is awarded general damages of Uganda shillings 55,000,000/=.
  • The aggregate sum awarded in paragraphs 1, 2, and 3 shall carry interest at the rate of 14% per annum from the date of judgment till payment in full.
  • The Plaintiff is awarded costs of the suit.

Rules and key headnotes

Dishonoured Cheques — Liability on Bills of Exchange
A cheque by its nature is unconditional and constitutes a promise to pay. Where a cheque has been dishonoured, the holder is entitled to file suit for recovery. A cheque is to be treated as cash and unless exceptional grounds are shown when it is dishonoured, the holder thereof is entitled to judgment for the face value.
Enforcement of Contracts — Breach of Payment Obligations
A contract is enforceable as between parties making it and it is the party who fails to carry out its obligations who will have the contract enforced against it. Where goods are supplied on credit terms with payment by post-dated cheques and the cheques are dishonoured, the supplier is entitled to enforce the contract for the purchase price.
Special Damages — Proof and Assessment for Dishonoured Cheques
Special damages are those losses which can be calculated in financial terms and must be proved. Where cheques issued for goods supplied are dishonoured, the plaintiff is entitled to recover the face value of the cheques as special damages, proved by the cheques themselves and supporting documentation of supply.
General Damages — Loss of Use of Money in Breach of Contract
General damages are those losses which will be presumed to be the natural or probable consequence of the wrong complained of. Where a party is deprived of money due under contract, general damages may be awarded on the basis of probable loss from inability to utilise the money to generate business profits, even where precise loss of profits is not proved.
Interest on Damages — Commercial Rates and Post-Judgment Interest
Upon breach of contract to pay money due, special damages should carry interest at commercial bank rates from the date of loss until judgment. The aggregate award including general damages should carry interest from judgment until payment in full at a rate the court considers reasonable.
Restitutio in Integrum — Measure of Damages for Breach
The fundamental common law doctrine of restitutio in integrum requires that the plaintiff be restored as nearly as possible to the position he would have been in had the injury complained of not occurred, that is, as if he had received his money in time.
Ex Parte Proceedings — Consequences of Defendant's Non-Appearance
Under Order 9 rule 20(1)(a) of the Civil Procedure Rules, where a defendant fails to appear when the suit is called for hearing, the court may proceed ex parte. Where witness statements have been filed and the defendant is absent for cross-examination, the statements may be admitted as unchallenged testimony in chief.

Legislation cited (3)

Cases cited (6)

  • Dada Cycles v Sofitra S.P.R.L Ltd (High Court Civil Suit No. 656 of 2005)
  • Hadley v Baxendale [1854] 9 Ex 341
  • Robbialac Paints (U) Ltd v K.T Construction Ltd [1976] HCB 45
  • Sembule Investments Ltd v Uganda Baati Ltd (Miscellaneous Application No. 0664 of 2009)
  • Kotecha v Mohammad [2002] 1 EA 112
  • Dharamshi v Karsan [1974] 1 EA 41

Cases citing this judgment (2)

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.

Nirma International Ltd v Jaribu Credit (U) Traders Ltd (Civil Suit No. 88 of 2009) [2014] UGCommC 36 (11 April 2014)
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.