Wakilii

Sari Consulting Limited v Francis Magambe Byaruhanga (Civil Suit No. 543 of 2020)

High Court · [2025] UGCOMMC 180 · 2025 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money and breach of contract
Decision
Judgment entered for the Plaintiff with recovery of USD 58,000 plus interest, general damages of USD 5,000, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a valid contract existed between the parties evidenced by a board resolution for the sale of shares. The defendant's defences of force majeure and frustration failed because the contract contained no force majeure clause and the termination of a related subcontract did not make payment of the purchase price impossible or radically different from what was contracted. The defendant breached the contract by failing to pay the outstanding balance. Plaintiff awarded USD 58,000 plus interest at 6% per annum from 31 December 2019, general damages of USD 5,000, and costs.

Outcome

Judgment entered for the Plaintiff with recovery of USD 58,000 plus interest, general damages of USD 5,000, and costs

Facts

The Plaintiff, an international consultancy company, was the majority shareholder (80 shares) in Sari Consulting Uganda Limited (SCUL), with the Defendant holding 20 shares. On 12 September 2019, the parties executed a board resolution whereby the Plaintiff agreed to sell its entire equity in SCUL to the Defendant for USD 73,000, payable by 30 December 2019. The Defendant made a part payment of USD 15,000 in October 2019 after the first deliverable under a subcontract (the NIMP contract) between SCUL and Tractebel Engineering was met. Before further payments could be made, the Ministry of Water and Environment suspended the NIMP contract in January 2020, and Tractebel issued a force majeure notice in March 2020 citing COVID-19. The Defendant failed to pay the outstanding USD 58,000, claiming the contract was frustrated by the suspension of the NIMP contract and COVID-19 restrictions. The Plaintiff's shares were never transferred to the Defendant, and SCUL's name was not changed as agreed.

Issues

  1. Whether the Court has jurisdiction to hear and determine the suit?
  2. Whether a valid contract subsists between the parties?
  3. Whether the Defendant has breached the contract?
  4. Whether the Plaintiff is entitled to the remedies sought?

Orders

  • There exists a valid contract between the Plaintiff Company and the Defendant.
  • The Defendant breached the Contract between the Plaintiff and the Defendant.
  • The Plaintiff is entitled to recover the outstanding balance of USD 58,000 from the Defendant with interest thereon at a rate of 6% per annum from 31 December 2019 until payment in full.
  • The Plaintiff is awarded general damages of USD 5,000.
  • The Plaintiff is awarded interest of 5% per annum on the general damages from the date of this judgment until payment in full.
  • The Plaintiff is awarded the Costs of the Suit.

Rules and key headnotes

Contract Law — Breach of Contract — Obligation to Perform
The parties to a contract must perform or offer to perform their respective promises unless performance is dispensed with or excused under the Contracts Act 2010 or any other law.
Contract Law — Frustration — Force Majeure Distinguished
Force majeure and frustration are separate and distinct legal doctrines. Force majeure must be expressly provided for in the contract and cannot be implied. A party intending to rely on force majeure must show that there was a provision in that regard in the contract between the parties.
Contract Law — Frustration — Elements and Burden of Proof
To establish frustration, three elements must be proved: (i) the event must arise without the fault or election of either party; (ii) there must be such a change in the significance of the obligation that performance would be a radically different thing from that contracted for; and (iii) the parties' reasonable and objectively ascertainable calculations as to the possibilities of future performance in the new circumstances must show impossibility. The burden of proving frustration lies on the party asserting it.
Contract Law — Frustration — Commercial Hardship Not Frustration
Lack of funds due to external business failure does not amount to frustration. Commercial hardship, including difficulty in performing a contract or reduced profitability, does not constitute frustration. The obligation must become impossible or radically different, not merely more onerous or less profitable.
Contract Law — Frustration — Assumption of Commercial Risk
Where a party takes control of a company and its contracts, including the risk of termination of those contracts, and the contract for sale of shares does not make payment conditional on the subsistence of a particular contract, the termination of that contract does not frustrate the obligation to pay the purchase price. Such termination is a commercial risk assumed by the purchaser.
Contract Law — Estoppel — Acknowledgment of Indebtedness
Where a party acknowledges indebtedness after the alleged frustrating event has occurred and makes no mention of frustration in that acknowledgment, that party will be estopped from later asserting frustration when it would be unjust or inequitable to do so.
Evidence — Parol Evidence Rule — Impeaching Documentary Evidence
Oral evidence is inadmissible to impeach or vary the terms of documentary evidence. The law does not allow courts to read into contracts clauses that were either the subject of negotiations or clauses that did not make their way into the final contract. A party is bound by the contract as signed.

Legislation cited (12)

Cases cited (49)

  • Meridiana Africa Airlines (U) Limited v Avmax Spares (EA) Ltd (High Court Civil Suit No. 111 of 2017)
  • Networth Consult Co. Ltd v The Attorney General of Uganda (High Court Civil Suit No. 541 of 2022)
  • Umar Nazir Kakooza v Bank of Baroda (High Court Civil Suit No. 217 of 2018)
  • Mua Insurance Uganda Limited v Charles Byamugisha t/a Baby Coach (High Court Civil Suit No. 316 of 2015)
  • Revoluntary Ads and Designs Ltd v Board of Trustees of Nakivubo Stadium (Civil Appeal No. 131 of 2012)
  • Monday Eliab v Attorney General (Supreme Court Civil Appeal No. 16 of 2010)
  • Chen Chao and 2 Others v Zhang Jun and 3 Others (Civil Suit No. 220 of 2020)
  • Major David Tinyefuza v The Attorney General (Appeal No. 1 of 1997)
  • Drummod Jackson V British Medical Association [1970] ALLER
  • Auto Garage V Motokov {1971} EA 51
  • Ham Enterprises (U) Limited and 2 Others v Katende Stephen and 2 Others and Mukwaya Jimmy and 245 Others (Miscellaneous Application No. 717 of 2021)
  • Kapeka Coffee Works v NPART (Court of Appeal Civil Appeal No. 3 of 2000)
  • Krell V Henry [1902) KB
  • Ronald Kasibante v Shell Uganda Ltd (Civil Suit No. 542 of 2006)
  • Davis Contractors Ltd v. Fareham Urban District Council [1956] AC 696
  • Satyabrata Ghose v. Mugneeram Bangur & Co. 1954 SCR 310
  • Bank of Uganda v Banco Arabe Espanyol (Court of Appeal Civil Appeal No. 23 of 2000)
  • Naihati Jute Mills Ltd. v. Khyaliram Jagannath (1968) 1 SCR 821
  • The Sea Angel [2007] EWCA Civ 547
  • Mogas (U) Ltd v Benzina (U) Ltd (High Court Civil Suit No. 88 of 2018)
  • Chandler v Webster (1904) 1 KB 493
  • Fibrosa Spolka v Fairbairn Lawson (1942) 2 ALL ER 122
  • Lexington Properties Limited v Alliance Media Uganda Limited (High Court Civil Suit No. 682 of 2021)
  • Tsakiroglou & Co. v Noblee & Thorl Gmbh (1962) AC 93
  • Globe Spinning Mills Nigeria PLC v Reliance Textile Industries (2017) LPELR-41433
  • RTI Ltd v MUR Shipping BV [2024] UKSC 18
  • Ryde v Bushell & Anor (1967) EA 817
  • Zzimwe Enterprises v Attorney General (Court of Appeal Civil Appeal No. 116 of 2019)
  • King Investment Management Ltd v Rivatex East Africa Limited [2023] KEHC 17701 (KLR)
  • Classic Maritime Inc V Limbungan Makmur SDN BHD [2019] EWCA Civ 1102
  • Jackson Mubangizi v Housing Finance Bank (High Court Miscellaneous Application No. 820 of 2020)
  • Ismail v Polish Ocean Liners (1976) 1 ALL ER 902
  • LK Enterprises Limited & Ors v ABSA Bank Uganda Limited (High Court Miscellaneous Application No. 404 of 2024)
  • Roko Construction Limited v Rocktec Technical Services Limited (High Court Miscellaneous Application No. 1812 of 2022)
  • Stroms V. Hutchinson [1905] AC 515
  • Hall Brothers SS Co. Ltd V. Young [1939] 1 KB748
  • Obongo & Another v. Municipal Council of Kisumu [1971] EA 91
  • Ongom & Another v. Attorney-General [1979] HCB 267
  • Kyambadde v. Mpigi District Administration [1983] HCB 44
  • Nsaba Buturo v. Munansi Newspaper [1982] HCB 134
  • Peter Musoke v Merger Technical Services Uganda Limited (High Court Civil Suit No. 426 of 2022)
  • MTK (U) Limited v Attorney General & Ors (High Court Civil Suit No. 578 of 2022)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Sietco v Noble Builders U Ltd (Supreme Court Civil Appeal No. 31 of 1995)
  • Premchandra Shenoi & Anor v Maximov Oleg Petrovich (Supreme Court Civil Appeal No. 9 of 2003)
  • Ahmed Ibrahim Bholm v Car & General Ltd (Supreme Court Civil Appeal No. 12 of 2003)
  • Harry Ssempa v Kamabagambire David (High Court Civil Suit No. 408 of 2014)
  • Lyamuleme David v AG (Supreme Court Civil Appeal No. 4 of 2013)
  • Anglo-Cyprian Trade Agencies Ltd V. Paphos Wine Industries Ltd [1951] 1 ALL ER 873

Full judgment

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Sari Consulting Limited v Francis Magambe Byaruhanga (Civil Suit No. 543 of 2020) [2025] UGCommC 180 (15 April 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.