Wakilii

Portland International (PTY) Ltd v Sembule Steel Mills Ltd & 2 Ors (Civil Suit No. 141 of 2014)

High Court · [2017] UGCOMMC 118 · 2017 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 credit agreement for supply of steel products
Decision
Judgment entered for the Plaintiff against all three Defendants jointly and severally for recovery of debt, 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

Held that the High Court of Uganda has jurisdiction to hear the matter notwithstanding a non-exclusive jurisdiction clause favouring the South African courts, as the Constitution and Judicature Act vest unlimited original jurisdiction in the High Court and the balance of convenience favours Uganda where the defendants reside and carry on business. The court found that a valid contract existed, that the defendants breached it by failing to pay for steel products valued at US$832,338.51, and that the Second and Third Defendants are personally liable under a deed of suretyship. Judgment entered for the plaintiff with interest and costs.

Outcome

Judgment entered for the Plaintiff against all three Defendants jointly and severally for recovery of debt, damages, interest and costs

Facts

In 2010, following negotiations, the First Defendant (a Ugandan steel company) applied for credit facilities to obtain steel products from the Plaintiff (a South African supplier). The parties entered into a credit agreement. The Second and Third Defendants, directors and shareholders of the First Defendant, signed terms and conditions of sale incorporating a deed of suretyship binding themselves jointly and severally to be personally liable for the First Defendant's debts. The Plaintiff supplied steel products including hot dipped galvanized wires, cold rolled galvanized steel wire, prime newly produced hot rolled wire rods and galvanized steel coil on credit. The products were shipped via bills of lading to Standard Chartered Bank South Africa as consignee, with the First Defendant as the party to be notified at its Kampala address. The First Defendant made partial payments but failed to pay the outstanding balance. By email dated 10 January 2012, the Second Defendant sought a revised payment schedule but no further payments were made.

Issues

  1. Whether the High Court of Uganda has jurisdiction to entertain the suit despite a contractual jurisdiction clause in favour of the High Court of South Africa.
  2. Whether a valid contract existed between the parties for the supply of steel products on credit.
  3. Whether the Defendants breached the contract by failing to pay for goods supplied.
  4. Whether the Second and Third Defendants are personally liable as guarantors under a deed of suretyship.
  5. What remedies are available to the Plaintiff.

Orders

  • The Plaintiff is awarded US$832,338.51 as special damages.
  • The Plaintiff is awarded general damages of UGX 50,000,000.
  • Interest is awarded on the special damages at the rate of 8% per annum from the date of filing the suit until payment in full.
  • Interest is awarded on the general damages at the rate of 12% per annum from the date of judgment until payment in full.
  • Costs of the suit are awarded to the Plaintiff.

Rules and key headnotes

Jurisdiction — Non-exclusive jurisdiction clauses — Constitutional and statutory powers of the High Court
Where parties have agreed to the non-exclusive jurisdiction of a foreign court, the High Court of Uganda retains jurisdiction under Article 139 of the Constitution and section 14 of the Judicature Act, which vest unlimited original jurisdiction in the High Court over all matters, and the High Court has discretion to hear the matter where the balance of convenience favours Uganda.
Formation of contract — Proof of execution — Comparison of signatures under the Evidence Act
Where a party denies executing a written agreement, the court may resort to section 72 of the Evidence Act to compare the disputed signature with other signatures admitted or proved to have been written by that person, and a finding that the signatures correspond perfectly establishes execution of the document.
Guarantee and suretyship — Personal liability of directors and shareholders
Where directors and shareholders of a company sign a deed of suretyship agreeing to bind themselves personally, jointly and severally for debts of the company, they are personally liable to pay amounts due to a creditor upon default by the company, and the terms surety and guarantor are synonymous.
Bills of lading — Delivery and transfer of property — Application of INCOTERMS
Under INCOTERMS 2010, where parties agree to CRF (Cost and Freight) terms and a bill of lading shows the consignee as a bank with the buyer as the party to be notified, the bill of lading acts as acknowledgement of receipt of goods and the buyer's exercise of rights to take delivery from the carrier constitutes delivery, and a signed delivery under the contract terms constitutes proof of receipt whether signed by the purchaser, employee, agent or representative.
Breach of contract — Request for discount as evidence of contract
A request by a party for a discount on an alleged debt and the making of partial payments are evidence that a contract existed and that goods were received, and denial of receipt without supporting evidence cannot override such positive evidence.
Special damages — Proof and calculation in international sale of goods
Special damages must be specifically pleaded and proved exactly, and where invoices supported by bills of lading prove delivery of goods on credit and the defendant makes partial payment, the outstanding balance on the invoices as proved constitutes special damages recoverable under section 48 of the Sale of Goods Act and Article 74 of the UN Convention on Contracts for the International Sale of Goods.
Interest on foreign currency debts — Commercial realism in interest rates
The interest rate applied to a debt denominated in US dollars should reflect the rate for borrowing US dollars and not Uganda shillings, and while courts have discretion to fix interest rates in commercial transactions, the rate should reflect the current commercial value of money and not be excessive.

Legislation cited (18)

Cases cited (22)

  • David Kayondo v The Cooperative Bank Ltd (Supreme Court Civil Appeal No. 19 of 1991)
  • Sebaggala & Sons Electric Centre Ltd v Kenya National Shipping Lines (High Court Civil Suit No. 431 of 1999)
  • LARCO Concrete Products Ltd vs. Transair Ltd [1987] HCB 40 [1988-90] HCB 80
  • Spiliada Maritime Corp vs. Cansulex Ltd [1987] AC 460
  • Aratra Potato Co. Ltd & Another vs. Egyptian Navigation Co. (The "ELAMRIA") [1981] 2 LLOyds Rep.119
  • William Glyns vs. Astro Dinamico [1984] ILLoyds Rep. 453
  • Wilkinson vs. Barking Corporation [1948] I KB 721
  • K & V Ltd v The Registered Trustees of Arya Practinidini Sabha Eastern Africa (High Court Civil Suit No. 299 of 2011)
  • Habre International Co Ltd v Ebrahim Maraki Kassam & Others (Supreme Court Civil Appeal No. 4 of 1999)
  • JK Patel v Spear Motors Ltd (Supreme Court Civil Appeal No. 4 of 1991)
  • James Sebaggala v China Palace (U) Ltd (High Court Civil Suit No. 1521 of 2015)
  • United Building Services Ltd v Yafesi Muzira t/a Quickest Builders & Co (High Court Civil Suit No. 154 of 2005)
  • Sewell vs. Burdick (1884) 10 App. Cas. 74
  • Hadley vs. Baxendale [1854] EWTTC J70
  • Roko Construction Co v Attorney General (High Court Civil Suit No. 517 of 2008)
  • Robert Coussens v Attorney General (Supreme Court Civil Appeal No. 8 of 1999)
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Uganda Commercial Bank vs. Kisozi [2002] IEA 305
  • Francis Butagira vs. Deborah Namukasa [1992- 1993] HCB 98
  • Crescent Transportation Co Ltd v BM Technical Services Ltd (Court of Appeal Civil Appeal No. 25 of 2000)
  • Nipunnorathan Bhatian v Crane Bank Ltd (Court of Appeal Civil Appeal No. 75 of 2006)
  • Smith vs. Wood 01929) ICH. 14

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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Portland International (PTY) Ltd v Sembule Steel Mills Ltd & 2 Ors (Civil Suit No. 141 of 2014) [2017] UGCommC 118 (3 October 2017)
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.