Wakilii

Saladin Media Advertising v Pioneer Easy Bus Ltd (Civil Suit No. 435 of 2012)

High Court · [2017] UGCOMMC 100 · 2017 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 and damages
Decision
Judgment entered in favour of the Plaintiff with special damages, general damages, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a party terminating a contract without following the contractually mandated notice procedure breaches the agreement. The defendant's failure to give the plaintiff 15 business days' notice to remedy alleged defects before terminating the advertising services agreement constituted breach of contract. An indemnity clause in the contract entitled the plaintiff to be indemnified against all losses arising from the defendant's breach. Special damages of UGX 94,959,745 awarded for documented expenditure in performance of the contract. General damages of UGX 30,000,000 awarded for loss of income and reputation. Exemplary damages refused where breach resulted from commercial difficulties rather than oppressive conduct.

Outcome

Judgment entered in favour of the Plaintiff with special damages, general damages, interest, and costs

Facts

The plaintiff, Saladin Media Advertising (trading as OMD), and the defendant, Pioneer Easy Bus Limited, entered into a Memorandum of Understanding in 2010 granting the plaintiff exclusive rights to sell advertising solutions on behalf of the defendant in Uganda and East Africa. The plaintiff would receive 18% commission on generated revenue. The plaintiff engaged contractors to design and construct bus shelters meeting KCCA-approved plans and commenced construction. In October 2011, the defendant advertised for bids for the same services exclusively contracted to the plaintiff. In November 2011, the defendant wrote to the plaintiff stating the contract was overtaken by events and terminated it, inviting the plaintiff to reapply. The plaintiff had paid commitment fees, fabrication costs, and other expenses totaling UGX 94,959,745 in performing its contractual obligations. The defendant justified termination by claiming the plaintiff could not complete the required shelters in time and that shelters did not meet KCCA standards, though no evidence supported these assertions.

Issues

  1. Whether the Defendant's actions were in breach of the terms of the contract?
  2. Whether the Defendant is liable to indemnify the Plaintiff and if so to what extent?
  3. Whether the parties are entitled to any remedies?

Orders

  • Special damages of UGX 94,959,745 awarded to the Plaintiff.
  • General damages of UGX 30,000,000 awarded to the Plaintiff.
  • Interest on special damages at 18% per annum from 1st October 2012 until payment in full.
  • Interest on general damages at 6% per annum (court rate) from date of judgment until payment in full.
  • Costs of the suit awarded to the Plaintiff.
  • Exemplary damages refused.

Rules and key headnotes

Contract Law — Termination — Procedural Requirements for Termination
Where a contract provides for termination upon notice specifying a minimum period for rectification of defects, failure to comply with that notice procedure constitutes breach of contract even if grounds for termination exist.
Contract Law — Remedies — Indemnity Clauses
An indemnity clause requiring each party to indemnify the other against loss, damages, costs, and expenses resulting from breach of the agreement is enforceable and entitles the non-breaching party to full indemnification for losses flowing from the breach.
Damages — Special Damages — Proof and Award
Special damages must be specifically proved but may be established through documentary evidence supported by unchallenged oral testimony where the defendant adduces no contradictory evidence and fails to cross-examine witnesses on the expenditure claimed.
Damages — General Damages — Assessment in Contract Breach
General damages for breach of contract are awarded to compensate the plaintiff for time spent, financial and human resource investment, loss of income suffered, and likely loss of reputation resulting from the defendant's wrongful termination of the contract.
Damages — Exemplary Damages — Conditions for Award
Exemplary damages are not awarded in breach of contract cases where the defendant's conduct resulted from commercial difficulties and business mistakes rather than oppressive, arbitrary, or calculated conduct aimed at profiting at the plaintiff's expense.
Damages — Interest — Commercial Rate on Special Damages
Where a defendant has kept a commercial plaintiff out of its money in a commercial transaction, interest on special damages may be awarded at a commercial rate of 18% per annum from the date the cause of action arose until payment in full.

Cases cited (6)

  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (High Court Civil Suit No. 177 of 2003)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Rookes vs Barnard [1964] ALL ER 367
  • Uganda Revenue Authority v Stephen Mabosi (Supreme Court Civil Appeal No. 1 of 1996)
  • Harbutt'sPlasticine Ltd vs Wyne Tank & Pump Co. Ltd [1970] 1 Ch 447

Full judgment

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

Saladin Media Advertising v Pioneer Easy Bus Ltd (Civil Suit No. 435 of 2012) [2017] UGCommC 100 (7 September 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.