Wakilii

Steam Investiments Limited v Isolux Ingenieria (Civil Suit No. 91 of 2021)

High Court · [2022] UGCOMMC 86 · 2022 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of construction subcontracts heard ex parte after defendant failed to file defence
Decision
Defendant found liable for breach of three construction subcontracts; plaintiff awarded contractual sum, penalties, and substantial general damages with interest

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

The court held that three construction subcontracts executed between plaintiff and defendant were valid and legally enforceable. Defendant breached the contracts by failing to pay the contractual price of USD 528,600 after requesting plaintiff to stop work. Court awarded the outstanding contractual sum, penalty sum of USD 475,600, and general damages of USD 2,500,000 for the financial distress caused to plaintiff who had borrowed extensively to perform the contracts and suffered creditor lawsuits and property attachment.

Outcome

Defendant found liable for breach of three construction subcontracts; plaintiff awarded contractual sum, penalties, and substantial general damages with interest

Facts

Defendant Isolux Ingenieria was contracted by Uganda Electricity Transmission Company to construct substations under the NELSAP interconnection project at Tororo, Mirama Hills, and Mbarara. Defendant subcontracted plaintiff Steam Investments Ltd to carry out civil works on the three substations. The subcontracts were approved by defendant's technical consultant in September 2014. Three independent subcontracts were executed on 4 May 2015 for Tororo and another contract (date unspecified for Mirama) and 4 October 2016 for Mbarara. Plaintiff executed the works which were approved by both defendant and Uganda Electricity Transmission Company. On 19 May 2017, defendant requested a summary of outstanding payments and stopped plaintiff from working at Mbarara substation. Parties mutually agreed in a meeting that the outstanding contractual balance was USD 528,600, confirmed by defendant in a letter dated 24 May 2017. Defendant failed to pay. Plaintiff had borrowed money from Equity Bank, obtained construction materials on credit from multiple suppliers, and obtained fuel and other financing to perform the contracts. Due to non-payment, plaintiff's creditors instituted suits, plaintiff's properties were advertised for sale by Equity Bank, and plaintiff accumulated substantial penalties and interest on the loans.

Issues

  1. Whether there were Agreements entered into between the Plaintiff and the defendant?
  2. Whether the defendant company breached the said contracts?
  3. What are the available remedies to the parties?

Orders

  • The Defendant acted in breach of the three subcontracts dated 4th May 2015 and 4th October 2016.
  • The defendant is indebted to the Plaintiff in a contractual sum of USD 528,600.
  • The Plaintiff is entitled to recovery of the sum of USD 475,600 in accumulated penalties, to be adjusted in accordance with the relevant clauses of the subcontracts.
  • The Plaintiff is awarded USD 2,500,000 in general damages.
  • Interest is awarded on the contract price at a rate of 12% per annum from the date of judgment until payment in full.
  • Interest is awarded on the penalty sum at a rate of 12% per annum from the date of judgment until payment in full.
  • Interest is awarded on the general damages at a rate of 8% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the Plaintiff.

Rules and key headnotes

Contract Formation — Essential Elements of Valid Contract
For a contract to be valid and legally enforceable, there must be capacity to contract, intention to contract, consensus ad idem, valuable consideration, legality of purpose, and sufficient certainty of terms.
Binding Effect of Signed Contracts — Fraud and Misrepresentation Exception
When a document containing contractual terms is signed, in the absence of fraud or misrepresentation, the party signing it is bound by its terms.
Breach of Contract — Definition and Elements
Breach of contract occurs when one or both parties fail to fulfill the obligations imposed by the terms of the contract. Where one party makes performance impossible, the injured party is entitled to treat the contract as discharged and sue for damages.
Penalty Clauses — Definition and Enforcement
A penalty clause provides that upon breach of a primary obligation under the contract, a secondary obligation arises on the part of the party in breach to pay a sum which does not represent a genuine pre-estimate of any loss likely to be sustained. Where a valid penalty clause exists and breach is established, the penalty is enforceable according to the contract terms.
General Damages — Compensatory Purpose and Assessment Principles
The general intention of the law in giving damages for breach of contract is to place the plaintiff in the position they would have been in had the contract been performed. General damages are compensatory and should achieve restitutio in integrum. The court must award damages that are neither too high nor too low, and the plaintiff must not be unjustly enriched nor the defendant unjustly punished.
Interest on Judgment Sums — Relationship with General Damages
Where general damages are awarded for breach of contract, interest on those damages typically runs from the date of judgment rather than from the date of breach, as the general damages themselves compensate for loss flowing from the breach. Interest awarded as compensation for deprivation runs until judgment, while post-judgment interest compensates for continued deprivation until payment.

Legislation cited (5)

Cases cited (18)

  • Greenboat Entertainment Ltd v City Council of Kampala (Civil Suit No. 580 of 2003)
  • Sharif Osman v Hajji Haruna Mulangwa (Court of Appeal No. 38 of 1996)
  • William Kasozi v DFCU Bank Ltd (High Court Civil Suit No. 1326 of 2000)
  • United Building Services Ltd v Yafesi Muzira t/a Quick Set Builders & Co (High Court Civil Suit No. 154 of 2005)
  • Delights Company Limited v Hajji Muhammed Kitaka (High Court Civil Suit No. 754 of 2014)
  • Athembu v Commercial Microfinance Limited & Anor (Miscellaneous Application No. 1 of 2014)
  • Scandinavian Trading Tanker Co AB v. Flota Petrolera Ecuatoriana [1983] 2 AC 694
  • Bernard Kyomukama v ENHAS Cooperative Savings & Credit Society (Civil Suit No. 35 of 2012)
  • Hope Mukankusi v Uganda Revenue Authority (Court of Appeal Civil Appeal No. 6 of 2011)
  • Besimira Moses v Attorney General (Civil Suit No. 143 of 2015)
  • Ntabgoba v. Editor-in-chief of the New Vision & another [2004] 2 EA 234
  • Uganda Telecom v. Tanzanite Corporation [2005] EA 351
  • The Argentino, (1889) 14 AC 519 HL
  • Hall V. Ross (1813) 1 Dow 201 3 ER 672, HL
  • Chester v. Afshar [2005] 1 A.C. 134
  • Kakubhai Mohanlal v Wan'd Telecom Uganda (Civil Suit No. 224 of 2011)
  • Ahimbisibwe v Akright Projects Ltd (High Court Civil Suit No. 832 of 2007)
  • The Commodity House Limited v Sugar and Allied Industries Limited (Civil Suit No. 614 of 2015)

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

Steam Investiments Limited v Isolux Ingenieria (Civil Suit No. 91 of 2021) [2022] UGCommC 86 (24 May 2022)
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.