Wakilii

Shipping GL (U) Ltd v P.N Mashru Ltd (Miscellaneous Application No. 1099 of 2017)

High Court · [2018] UGCOMMC 53 · 2018 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for leave to appear and defend arising from summary suit for debt recovery
Decision
Application dismissed; interest awarded to plaintiff at 20% per annum from date of default; costs to plaintiff

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

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

Court held that once partial judgment is entered by consent on the principal sum and leave to defend is granted on interest, the suit ceases to be a summary suit and becomes an ordinary suit. Interest not backed by contract cannot be recovered under Order 36 summary procedure but can be awarded by the court in its discretion under Section 26(2) of the Civil Procedure Act. The respondent was awarded interest at 20% per annum from the date of default until full payment as compensation for being deprived of its money.

Outcome

Application dismissed; interest awarded to plaintiff at 20% per annum from date of default; costs to plaintiff

Facts

Between 24 November 2016 and 27 October 2017, the defendant engaged the plaintiff to load, offload and transport cargo (bags of coffee) from Kampala to Mombasa port for an agreed sum of USD 24,099. The defendant paid USD 5,000 on 16 November 2016, leaving an outstanding balance of USD 19,099. Despite demands, the defendant failed to pay. The plaintiff brought a summary suit for recovery of USD 19,099 plus interest at 26% per annum from 24 November 2016. The court entered partial judgment for the principal sum by consent and gave the defendant leave to defend on the issue of interest. The defendant objected to the interest claim, arguing it was not supported by contract and could not be recovered under summary procedure.

Issues

  1. Whether the applicant should be granted leave to appear and defend the suit on the issue of interest.
  2. Whether interest claimed by the respondent can be awarded under summary procedure when not backed by contractual agreement.
  3. Whether a suit commenced under summary procedure becomes an ordinary suit once partial judgment is entered and leave to defend is granted on remaining issues.
  4. At what rate interest should be awarded and from which date.

Orders

  • The plaintiff is awarded interest of 20% from the date of default (24 November 2016) till payment in full.
  • The plaintiff's suit succeeds with costs as against the defendant/applicant.

Rules and key headnotes

Civil Procedure — Summary Suits — Conversion to Ordinary Suits — Effect of Granting Leave to Defend
Where a suit commences under summary procedure and the court grants the defendant leave to appear and defend, or where partial judgment is entered by consent on the principal sum and leave is given to defend on remaining issues, the suit ceases to be a summary suit and becomes an ordinary suit.
Civil Procedure — Summary Suits — Interest Claims — Requirement of Contractual Agreement
A claim under Order 36 of the Civil Procedure Rules should not include interest except where the document sued upon includes an agreement on interest. Interest not backed by contract cannot be recovered under summary procedure.
Contract Law — Interest on Debts — Court's Discretion under Section 26(2) Civil Procedure Act
Interest that does not fall under summary procedure and cannot be recovered under Order 36 can nonetheless be awarded by the court in the ordinary way in its discretion under Section 26(2) of the Civil Procedure Act, which empowers the court to award interest at such rate as it deems reasonable on money adjudged from the date of suit to the date of decree.
Contract Law — Interest on Debts — Compensatory Purpose
The award of interest on money of which a plaintiff has been deprived is compensatory in nature and fulfils the same purpose as an award of general damages, which is to put the innocent party as far as possible in the position as if the contract had been performed. Where money is due and owing but withheld, an award of interest compensates the plaintiff for the deprivation and for being kept out of their money.

Legislation cited (4)

Cases cited (7)

  • Begumisa George v East African Development Bank (HCMA No. 451 of 2010)
  • Solomon Baganja and Mabel Nansubuga v Henley Property Developers Ltd (HCCS No. 47 of 2012)
  • Arjabu Kasule v F. T. Kawesa [1957] EA 611
  • E. M. Cornwell & Co. Ltd v Shantaguari Dahyabhai Desai (1941) 6 ULR 103
  • Uganda Transport Co. Ltd v Count de la Pasture (1954) 21 EACA 163
  • Hanani Moezali v Moez Ramani (HCCS No. 416 of 2001)
  • DFCU Bank (U) Ltd v Ms Ndibazza & Anor (Civil Suit No. 80 of 2012)

Full judgment

↓ Download PDF

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

Shipping GL (U) Ltd v P.N Mashru Ltd (Miscellaneous Application No. 1099 of 2017) [2018] UGCommC 53 (13 August 2018)
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.