Wakilii

Uganda South Sudan Grain Traders & Suppliers Association Ltd v Government of the Republic of South Sudan (Miscellaneous Cause No. 17 of 2012)

High Court · [2013] UGCOMMC 53 · 2013 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application under Article 50 of the Constitution and Order 52 of the Civil Procedure Rules seeking enforcement of a Memorandum of Understanding between two sovereign states
Decision
Application dismissed; applicant directed to pursue claims through Government of Uganda using dispute resolution mechanism in the MOU

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that an association of grain traders lacks standing to directly enforce a Memorandum of Understanding signed between the Governments of Uganda and South Sudan, even though the MOU conferred a benefit on its members. The MOU was an agreement between two sovereign states with its own dispute resolution mechanism, and the applicant should pursue its claim through the Government of Uganda using that mechanism rather than bringing an independent application under Article 50 of the Constitution. Application dismissed.

Outcome

Application dismissed; applicant directed to pursue claims through Government of Uganda using dispute resolution mechanism in the MOU

Facts

The applicant is an association of Ugandan grain traders and suppliers formed to collectively pursue debts owed by the Government of South Sudan for grain supplied to various South Sudanese government departments. The total claim was approximately USD 56,431,987. The Government of Uganda engaged the Government of South Sudan on behalf of the traders, and on 21 November 2010 a Memorandum of Understanding was signed between the two governments wherein South Sudan agreed to settle all claims by 21 June 2011. The MOU listed the applicant's members as beneficiaries and stipulated payment into a special account at the Bank of Uganda. South Sudan allegedly failed to honour its commitments. The applicant brought this application under Article 50 of the Constitution seeking enforcement of the MOU. The respondent did not appear despite service on its Embassy in Uganda.

Issues

  1. Whether the applicant has locus standi to sue on the Memorandum of Understanding signed between two sovereign states.
  2. Whether the respondent enjoys sovereign immunity from judicial proceedings in relation to commercial transactions.
  3. Whether the High Court has jurisdiction to entertain and determine this matter.
  4. Whether the Attorney General of Uganda should have been joined in this matter.
  5. Whether the applicant is entitled to the remedies sought under Article 50 of the Constitution.

Orders

  • Application dismissed.
  • No order as to costs since the matter proceeded ex parte.

Rules and key headnotes

Third Party Rights — Locus Standi to Enforce Inter-Governmental Agreement
Where a Memorandum of Understanding is concluded between two sovereign states with its own dispute resolution mechanism, a third party beneficiary lacks standing to bring an independent judicial application to enforce the agreement, even though the MOU expressly confers a benefit on that party, because such agreements are intended to be enforced through government-to-government channels rather than by beneficiaries directly in domestic courts.
Sovereign Immunity — Restrictive Principle — Commercial Transactions
Under the restrictive principle of sovereign immunity, where a sovereign state descends into the marketplace and conducts commercial transactions, a suit can legally be brought against that state in domestic courts of another state in relation to such commercial transactions, and the state would not be immune from being sued upon commercial transactions as they are not part of its public functions.
Fundamental Rights Enforcement — Article 50 — Proper Invocation
An application under Article 50 of the Constitution to enforce property rights is misconceived where the applicant seeks to enforce rights arising from a Memorandum of Understanding rather than from a judgment; a MOU is an agreement whose breach entitles the aggrieved party to bring an action for damages, and it is only upon obtaining a judgment that the successful party would be entitled to enforce its rights under Article 50 as conferred by that judgment.
Contracts Act 2010 s.65 — Third Party Enforcement — Limits in Inter-State Context
Section 65 of the Contracts Act 2010, which permits third parties to enforce benefits conferred on them by contract, does not extend to permit direct enforcement by a third party beneficiary of an inter-governmental Memorandum of Understanding where the parties intended enforcement to occur through government-to-government dispute resolution mechanisms as stipulated in the agreement itself.
Jurisdiction — Breach of Contract — Place of Performance
In suits arising from breach of contract, the cause of action arises at the place where the contract was to be performed or its performance completed, or the place where money to which the suit relates was expressly or impliedly payable; where a contract stipulates payment into a special account in Uganda, Ugandan courts have jurisdiction over disputes arising from that contract.

Legislation cited (12)

Cases cited (6)

  • Drive Yourself Hire v Strutt [1952] 2 All ER 1475
  • Gandy v Gandy (1885) 30 Ch D 57
  • Rahimtoola v H.E.H The Nazim of Hyderabad & Others [1957] All ER 441
  • East African Development Bank v Blueline Enterprises Ltd (Civil Appeal No. 110 of 2009)
  • Goodman Agencies Ltd v Attorney General (Constitutional Petition No. 3 of 2008)
  • Edward Fredrick Ssempebwa v Attorney General (Constitutional Petition No. 1 of 1986)

Full judgment

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

Uganda South Sudan Grain Traders & Suppliers Association Ltd v Government of the Republic of South Sudan (Miscellaneous Cause No. 17 of 2012) [2013] UGCommC 53 (28 March 2013)
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.