Wakilii

Transtrac Ltd v Damco Logistics Uganda Limited (Miscellaneous Application No 394 of 2010)

High Court · [2012] UGCOMMC 208 · 2012 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application objecting to jurisdiction in third-party proceedings arising from main suit
Decision
The applicant's objection to jurisdiction was overruled. The third-party proceedings against the applicant may continue in the High Court Commercial Division.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that a jurisdiction clause in a contract providing for exclusive jurisdiction of English courts can only be invoked by and against parties to that contract, not against a third party who may benefit from the contract but is not party to it. The doctrine of privity of contract means only parties to an agreement may enforce its terms, including jurisdiction clauses. The application objecting to jurisdiction was dismissed because the respondent was not a party to the contract containing the English jurisdiction clause.

Outcome

The applicant's objection to jurisdiction was overruled. The third-party proceedings against the applicant may continue in the High Court Commercial Division.

Facts

The defendant in the main suit (respondent here) issued a third-party notice against the applicant seeking indemnity or contribution of USD 303,330 for goods lost in transit. The applicant objected to the High Court's jurisdiction, relying on clause 19 of an agreement dated October 23, 2004 between the applicant (Transtrac Ltd) and Maersk Uganda Limited, which provided that disputes would be governed by English law and subject to the exclusive jurisdiction of English courts. The respondent (Damco Logistics Uganda Limited, formerly Maersk Logistics) was named as a beneficiary customer under clause 6.1 of that agreement, which provided for indemnification in case of loss. The applicant contended that the jurisdiction clause ousted the High Court's jurisdiction over the third-party claim.

Issues

  1. Whether the High Court Commercial Division has jurisdiction over the applicant in respect of the third-party claim for indemnity and contribution.
  2. Whether a jurisdiction clause in a contract between two parties submitting to exclusive jurisdiction of a foreign court can be invoked against a third party who is not a party to that contract.

Orders

  • Application objecting to jurisdiction dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Jurisdiction — Objections to Jurisdiction — Contracts with Foreign Jurisdiction Clauses
A contractual clause submitting to the exclusive jurisdiction of a foreign court does not oust the constitutional and statutory jurisdiction of the High Court, but the court will ordinarily enforce the contract between the parties by staying proceedings or dismissing the suit where the parties have agreed to submit disputes to a foreign forum.
Privity of Contract — Enforcement of Contractual Terms by Third Parties
It is a fundamental principle that only a person who is a party to a contract can sue on it or invoke its provisions. A jurisdiction clause in a contract can only be invoked by the parties to that contract, not against a third party who is not party to the contract even if that third party may take a benefit under it.
Judicial Power — Unlimited Original Jurisdiction of High Court
Article 139(1) of the 1995 Constitution confers unlimited original jurisdiction on the High Court subject to the Constitution. This jurisdiction cannot be ousted by an Act of Parliament or by agreement between private parties. A contractual submission to foreign jurisdiction does not deprive the High Court of jurisdiction but engages the court's discretion whether to exercise that jurisdiction.

Legislation cited (1)

Cases cited (7)

  • Uganda Telecom v Rodrigo Chacon t/a Andes Alpes Trading (HCMA 337 of 2008)
  • Fehmarh (1958) 1 WLR page 159
  • David Kayondo v Cooperative Bank (Civil Appeal No. 19 of 1991)
  • Uganda Projects Implementation and Management Centre v Uganda Revenue Authority (Constitutional Appeal No. 2 of 2005)
  • Commissioner General Uganda Revenue Authority v Meera Investments Ltd (Supreme Court Civil Appeal No. 22 of 2007)
  • Scruttons Ltd vs Midland Ltd [1962] 1 ALL ER 1
  • UCDA Vs James Byaruhanga & Construction Vs Endesha Enterprises Ltd

Full judgment

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

Transtrac Ltd v Damco Logistics Uganda Limited (Miscellaneous Application No 394 of 2010) [2012] UGCommC 208 (24 August 2012)
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.