Wakilii

R.L Jain Limited v Seremba Hamiduh and Others (Civil Suit No. 7 of 2020)

High Court · [2025] UGHCCD 167 · 2025 Judgment for Counter Claimant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Counter claim following dismissal of original suit for non-appearance, heard exparte against 1st and 3rd counter defendants, default judgment against 2nd counter defendant
Decision
Counter claim succeeded. Judgment entered against 1st and 3rd counter defendants jointly and severally for principal sum, general damages, interest on general damages, and costs. Default judgment entered against 2nd counter defendant for principal sum, interest at 24% per annum, and costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the 1st counter defendant breached the loan agreement by failing to repay UGX 107,000,000 advanced under a loan agreement dated 6 July 2019, having paid only UGX 9,000,000 and failing to comply with a subsequent memorandum of loan settlement requiring payment of 80% of daily and weekly sales. The 3rd counter defendant breached a collaboration agreement by releasing stock valued at UGX 208,400,000 held as security without authorization from the counter claimant. Judgment was entered jointly and severally against the 1st and 3rd counter defendants for UGX 146,060,000 plus general damages of UGX 10,000,000.

Outcome

Counter claim succeeded. Judgment entered against 1st and 3rd counter defendants jointly and severally for principal sum, general damages, interest on general damages, and costs. Default judgment entered against 2nd counter defendant for principal sum, interest at 24% per annum, and costs.

Facts

On 6 July 2019, R.L Jain Limited advanced a short-term loan of UGX 107,000,000 to Seremba Hamiduh at 6% monthly interest for six months to finance purchase of disposable goods. Ntale Remigio guaranteed repayment. Seremba Hamiduh paid only UGX 9,000,000. Prior to the loan, Coronet Consult Ltd had entered a collaboration agreement with R.L Jain Limited to control goods held as security for credit facilities. Coronet took control of Seremba's stock valued at UGX 208,400,000. On 15 October 2019, a memorandum of loan settlement was executed wherein Seremba agreed to provide replacement security (land title) and pay 80% of daily and weekly sales. Coronet released the goods to Seremba without authorization. Seremba sold the goods without remitting proceeds and made no further payments. As of 24 January 2020, the outstanding balance was UGX 146,060,000. The original suit by Seremba was dismissed for non-appearance. R.L Jain Limited proceeded with its counter claim exparte against the 1st and 3rd counter defendants.

Issues

  1. Whether the 1st counter defendant breached the loan agreement?
  2. Whether the 3rd counter defendant breached the collaboration agreement?
  3. What are the available remedies?

Orders

  • Judgment entered against the 1st and 3rd counter defendants jointly and severally.
  • Payment of UGX 146,060,000 to the counter claimant.
  • Payment of UGX 10,000,000 as general damages to the counter claimant.
  • Payment of interest on general damages at 8% per annum from the date of judgment until payment in full.
  • Payment of the taxed costs of the counter claim.
  • Default judgment entered against the 2nd counter defendant for payment of UGX 146,060,000, interest at 24% per annum from the date of judgment until full payment, and costs of the counter claim.

Rules and key headnotes

Contract Law — Breach of Contract — Loan Agreement — Failure to Repay
Failure by a borrower to repay a loan according to the agreed terms, including failure to comply with a restructured payment arrangement under a memorandum of loan settlement, constitutes breach of contract entitling the lender to recover the outstanding principal and accrued interest.
Contract Law — Breach of Contract — Collaboration Agreement — Unauthorized Release of Security
Where a party to a collaboration agreement undertakes to control goods held as security for credit facilities and releases those goods without authorization from the creditor, such conduct constitutes breach of the collaboration agreement.
Banking & Finance — Interest — Compound Interest — Prohibition
The law generally prohibits award of compound interest in money lending contracts, making such agreements illegal and unenforceable, except where the contract explicitly provides for compound interest and the amount is not harsh or unconscionable. Compound interest is not founded simply on indebtedness but depends on criteria such as the law applicable to the transaction, the nature of the business, construction of the agreement, trade custom, intentions of the parties, or consequences of the commercial transaction.
Damages & Quantum — General Damages — Assessment — Breach of Contract
General damages are a direct natural or probable consequence of the act complained of and are awarded at the discretion of the court to restore the aggrieved person to the position they would have been in had the breach not occurred. In assessing general damages, the court should be guided by the value of the subject matter, the economic inconvenience suffered, and the nature and extent of the injury. General damages are implied in every breach of contract.
Civil Procedure — Exparte Hearing — Non-Appearance of Defendant
Where a defendant fails to appear at the hearing despite sufficient notice, the court may proceed to hear the matter exparte pursuant to Order 9 rule 20(1)(a) of the Civil Procedure Rules.

Legislation cited (7)

Cases cited (9)

  • Cargo World Logistics Limited v Royale Group Africa Limited (High Court Civil Suit No. 157 of 2013)
  • Hadley v Baxendale (1894) 9 Exch 341
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Robert Cuossens v Attorney General (Supreme Court Civil Appeal No. 8 of 1999)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Premchandra Shenoi and Another v Maximov Oleg Petrovich (Supreme Court Civil Appeal No. 9 of 2003)
  • Harbutt's Plasticine Ltd v Wayne Tank & Pump Co. Ltd [1970] QB 447
  • Kinyera v Management Committee of Laroo Building Primary School (High Court Civil Suit No. 99 of 2013)
  • Attorney General v Virchand Mithalal Sons Ltd (Supreme Court Civil Appeal, 2009)

Full judgment

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

R.L Jain Limited v Seremba Hamiduh and Others (Civil Suit No. 7 of 2020) [2025] UGHCCD 167 (7 October 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.