Wakilii

Orsan International S.R.L v Kankan Builders Point Limited (Civil Suit No. 69 of 2021)

High Court · [2025] UGCOMMC 324 · 2025 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Main suit dismissed for failure to pay security for costs; judgment on counterclaim for breach of contract, negligence, and breach of fiduciary duty
Decision
Main suit dismissed for non-compliance with security for costs order; counterclaim dismissed with costs awarded to 2nd Counter Defendant

Observed later treatment

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Holding

The court dismissed the plaintiff's main suit for failure to pay security for costs as ordered. On the counterclaim, the court held that no breach of contract occurred where delays in production and shipping during the COVID-19 pandemic were reasonable and the counterclaimant acquiesced to the delays by continuing performance without complaint. The court found no fiduciary duty owed by the second counter-defendant, a separate corporate entity whose director acted as an interpreter. The counterclaimant's claims of breach and negligence were dismissed as afterthoughts arising only after being sued for non-payment.

Outcome

Main suit dismissed for non-compliance with security for costs order; counterclaim dismissed with costs awarded to 2nd Counter Defendant

Facts

The plaintiff, an Italian company, supplied building materials worth EUR 86,098.22 to the defendant under a contract arranged through an intermediary. The defendant paid EUR 35,000 as deposit in November 2019. Goods were to be manufactured and shipped by January 2020 but were delayed until March/April 2020, allegedly due to COVID-19. The goods arrived in Mombasa in April 2020 and Kampala in May 2020. The defendant encountered customs clearance issues with URA, incurring additional tax liabilities and storage costs. The plaintiff sued for the outstanding balance of EUR 51,098. The defendant counterclaimed for breach of contract, alleging delays in production, shipping, and provision of documentation, as well as misrepresentation about import duties. The court ordered the plaintiff to pay security for costs of EUR 20,000 within 60 days. The plaintiff failed to comply, and the main suit was dismissed in October 2022.

Issues

  1. Whether the 1st and 2nd Counter Defendants breached their contract with the Counterclaimant?
  2. Whether the 1st Counter Defendant is liable in negligence?
  3. Whether the 1st and 2nd Counter Defendant is liable for professional negligence and/or breach of fiduciary duty to the Counter Claimant?
  4. Whether the parties are entitled to the remedies sought?

Orders

  • Main suit dismissed for failure to pay security for costs.
  • Counterclaim dismissed — no breach of contract by the 1st and 2nd counter defendants.
  • The 2nd Counter defendant has no legal obligation to the counterclaimant.
  • The 1st Counter defendant is not liable in negligence.
  • The 1st and 2nd counter defendants are not liable for professional negligence and/or breach of fiduciary duty to the counter claimant.
  • The 2nd Counter Claimant did not owe the counterclaimant any fiduciary duty.
  • The Defendant is awarded costs of the main suit that was dismissed upon failure to pay security for costs.
  • The Counter Claimant and the 1st Counter Defendant shall bear their own costs.
  • The 2nd Counter defendant is awarded costs of the counterclaim against the Counter Claimant.

Rules and key headnotes

Civil Procedure — Security for Costs — Foreign Plaintiff — Consequences of Non-Compliance
Where a foreign plaintiff ordered to furnish security for costs fails to comply with the court order within the stipulated time, the court is entitled under Order 26 Rule 2(1) of the Civil Procedure Rules to dismiss the suit with costs, and all claims under that suit collapse with the dismissal.
Contract Law — Formation — Oral Contracts — Proof by Conduct and Documents
In the absence of a written contract specifically tailored for a transaction, a contract may be established under section 10 of the Contracts Act through a series of documents detailing the transaction coupled with exchange of consideration, provided the essentials of a valid contract are present: capacity, intention, consensus ad idem, valuable consideration, legality of purpose, and sufficient certainty of terms.
Company Law — Separate Legal Personality — Liability of Company for Acts of Directors
Following the principle in Salomon v Salomon & Co Ltd, a company is at law a different person from its directors and shareholders. Where a director acts in dealings with third parties, the company is not automatically liable unless it is established that the director was acting as the company's agent with authority, or that the company itself entered into contractual relations with the third party.
Contract Law — Breach — Classification of Terms — Innominate Terms — Time of Performance
Whether a stipulation as to time is of the essence of a contract depends on the terms of the contract under section 11(2) of the Sale of Goods and Services Act. Where parties by their conduct acquiesce to delays in performance without complaint or repudiation, and where delays are caused by extraordinary circumstances such as a pandemic, a breach of time stipulations may be classified as breach of an innominate term rather than a condition, remedied by damages rather than discharge of the contract.
Contract Law — Breach — Waiver and Acquiescence — Continuing Performance Without Complaint
Where a party continues to perform a contract and accepts performance from the other party without expressing dissatisfaction or complaint about alleged breaches, and only raises breach after being sued for non-payment, such conduct amounts to acquiescence or waiver of the alleged breach, and the subsequent claim of breach may be found to be an afterthought lacking merit.
Tort Law — Negligence — Duty of Care — Fiduciary Duty — Burden of Proof
A party alleging breach of fiduciary duty bears the burden of proving the existence of the relationship giving rise to the fiduciary duty, the nature of the duty owed, and that the alleged fiduciary was duty-bound by reason of a prior position in the relationship to provide such duty. Mere involvement as an intermediary or interpreter does not automatically create a fiduciary relationship.

Legislation cited (9)

Cases cited (12)

  • De Bry v Fitzgerald and Another (1990) 1 All ER 560
  • Housing Finance Bank Limited & Anor v Edward Musisi (Misc. Application No. 158 of 2010)
  • Miller v Minister of Pensions [1947] 2 All ER 372
  • Greenboat Entertainment Ltd v City Council of Kampala (HCCS No. 0580 of 2003)
  • Salomon v Salomon & Co Ltd [1897] AC 22 (HL)
  • Mogas (U) Limited v Bensima (U) Limited (HCCS No. 88 of 2013)
  • BS & N Ltd v Micado Shipping Ltd (The Seaflower) [2001] 1 Lloyd's Rep 341
  • Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
  • Mohan Musisi v Asha Chand (SCCA No. 14 of 2022)
  • Blyth v Birmingham Waterworks Co (1856) 11 Ex 78
  • Donoghue v Stevenson [1932] AC 562
  • Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Full judgment

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Orsan International S.R.L v Kankan Builders Point Limited (Civil Suit No. 69 of 2021) [2025] UGCommC 324 (2 September 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.