Arrow Centre (U) Ltd v Polat Yol Yapi Sanayi ve Ticaret Anonim Sirketi (Civil Suit 534 of 2024) [2024] UGCommC 375 (23 December 2024)

5 THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) CIVIL SUIT NO. 0534 OF 2024 ARROW CENTRE (U) LTD :::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF 10 VERSUS POLAT YOL YAPI SANAYI VE TICARET ANONIM SIRKETI :::::::::::::::::::::::::::::::::::::::::: DEFENDANT BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA

JUDGMENT

15 Introduction

On 3rd May, 2024, the Plaintiff instituted this suit against the Defendant seeking recovery of UGX 62,128,000/= (Uganda Shillings Sixty-Two Million One Hundred Twenty-Eight Thousand Only), being unpaid money for goods supplied, general damages, interest and costs of the suit.

20 Brief facts

The facts constituting the Plaintiff's claims are that; On 5th February, 2022, the Defendant, through a Local Purchase Order to the Plaintiff ordered for 52 pieces of 13R 22.5 Royal Black tyres. On 8th February, 2022, the Plaintiff supplied and delivered to the Defendant 44 pieces of 13R 22.5

25 Royal Black tyres and subsequently issued a delivery note and a tax invoice of UGX 64,664,000/= (Uganda Shillings Sixty-Four Millon Six Hundred Sixty-Four Thousand Only) for the 44 tyres supplied to the Defendant.

- 5 That the Defendant paid only UGX 2,536,000/= (Uganda Shillings Two Million Five Hundred Thirty-Six Thousand Only), out of the outstanding amount of UGX 64,664,000/= (Uganda Shillings Sixty-Four Million Six Hundred Sixty-Four Thousand Only), leaving a balance of UGX 62,128,000/= (Uganda Shillings Sixty-Two Million One Hundred Twenty- - 10 Eight Thousand Only) which the Defendant refused and/ or neglected to pay despite several reminders from the Plaintiff hence this suit.

On 21st May, 2024, this Court issued summons to file a defence upon the Defendant and the same were served on the Defendant on 24th May, 2024 as per the affidavit of service of Mr. Mutahi Elon dated 24th June, 2024 15 but the Defendant did not file a written statement of defence.

On 26th September, 2024, this Court issued an order for substituted service upon the Defendant by affixing the summons on the Court notice board and publishing the same in a newspaper of wide circulation. Mr. Mutahi Elon, an authorized Court process server, vide an affidavit of 20 service, deponed on 7th November, 2024, stated that the summons were published in the Daily Monitor Newspaper on 25th October, 2024 and also affixed on this Court's notice board. Mr. Mutahi Elon further deponed that on 31st October, 2024, he served the Defendant with a letter informing the Defendant that the summons were advertised in the daily Monitor 25 Newspaper on 25th October, 2024. Despite the aforementioned service, the Defendant did not file a written statement of defence.

On 11th November, 2024, the Plaintiff's Counsel prayed for an interlocutory judgment under Order 9 rule 8 of the Civil Procedure Rules against the Defendant for failure to file a written statement of defence, which was 30 granted and the matter proceeded for formal proof of assessment of damages.

5 Representation

The Plaintiff was represented by Learned Counsel Fred Byamukama and Learned Counsel Alinda Allan of MACB Advocates.

The Hearing

The Plaintiff called one witness, Mr. Amin Virani, the Plaintiff's Managing

10 Director (PW1) and his witness statement was admitted as his evidence in chief. The Plaintiff also adduced documentary evidence contained in its trial bundle.

Counsel for the Plaintiff were directed to file written submissions which they did and the same, have been considered by this Court.

15 Issues for Determination

Following Order 15 rule 5(1) of the Civil Procedure Rules, this Court has rephrased the issues so raised to read as follows:

- 1. Whether the Plaintiff is entitled to an award of general damages for 20 breach of contract by the Defendant? - 2. Whether the Plaintiff is entitled to interest and costs of the suit?

Issue No.1: Whether the Plaintiff is entitled to an award of damages for 25 breach of contract by the Defendant?

Plaintiff's submissions

It was submitted for the Plaintiff that it was the evidence of PW1, Mr. Amin Virani, that the Defendant, through a Local Purchase Order, ordered a total of 52 pieces of 13R 22.5 tyres from the Plaintiff and that under the

- 5 said Local Purchase Order, the Plaintiff supplied to the Defendant a total of 44 pieces of 13R 22.5 Royal Black Tyres and that the current total outstanding amount for the tyres supplied is UGX 62,128,000/= which despite several reminders and or demands, the same remains unpaid. - Counsel for the Plaintiff further relied on the testimony of PW1 that the 10 refusal to pay the outstanding contractual sum has affected the operations of the Plaintiff, given that it has affected its cash flows thus making it difficult to order new goods from abroad and yet the Plaintiff is in the business of importing and selling motor vehicle tyres in Uganda among others and that for all the said inconvenience, the Plaintiff prayed for 15 general damages of UGX 15,000,000/=.

It was further submitted that it is undisputed that the Defendant breached the contract and since a written statement of defence was not filed despite service of summons, an interlocutory judgment was entered against the Defdendant by this Honorable Court.

20 In support of the contention to determine the quantum of damages that the Plaintiff is entitled to, Counsel relied on the Supreme Court decision in the case of *Haji Asumani Mutekanga Vs Equator Growers (U) Ltd Supreme Court Civil Appeal No. 7 of 1995*, that an interlocutory judgment having been entered, the only issue left is quantum or 25 assessment of damages if any.

Counsel for the Plaintiff also relied on the Paper of Hon. Mr. Justice Bart M. Katureebe, JSC (RTD) - Principles Governing the Award of Damages in Civil Cases, for the definition of general damages as; "damages such as the law will presume to be the direct natural or probable consequence of

5 the act complained of and which will include anticipated future loss as well as damages for pain, suffering and loss of amenity."

Counsel further relied on Section 60(1) of the Sale of Goods and Supply of Services Act Cap. 292, Sections 60(1) and 60(4) of the Contracts Act, Cap. 284 and the cases of *Kabandize John Baptist and 21 Others*

- 10 *Vs Kampala Capital City Authority Court of Appeal Civil Appeal No. 36 of 2016*, *Takiya Kashwahiri and Anor Versus Kajungu Denis Court of Appeal Civil Appeal No. 85 of 2011* and *Uganda Commercial Bank Vs Deo Kigozi [2002]1 EA 305*, for further principles on general damages. - 15 In conclusion, it was submitted for the Plaintiff that through its evidence PW1, the value of the subject matter is UGX 62,128,000/= and that the Plaintiff has been unjustifiably and without reasonable cause denied the said monies which are legally owed to it by the Defendant, having supplied several goods to the Defendant. - 20 Counsel prayed that this Court finds that the loss and inconvenience suffered by the Plaintiff as submitted above, arises naturally and is a direct consequence of the Defendant's breach and that the sum of UGX 15,000,000/= (Uganda Shillings Fifteen Million Only) is sufficient compensation to the Plaintiff and awards the same to it as general 25 damages.

Analysis and Determination

The Defendant herein failed to effect payment to the Plaintiff of UGX 62,128,000/=. The amount was unchallenged by the Defendant and consequently, an interlocutory judgment was entered under Order 9 rule

5 8 of the Civil Procedure Rules. The Court shall now proceed to evaluate whether the Plaintiff is entitled to the general damages sought.

It is trite that in civil cases, whoever desires any Court to give judgment as to any legal right or liability must prove the existence of the facts that he or she asserts. (See: Sections 101, 102 and 103 of the Evidence Act, 10 Cap. 8). The standard of proof is on the balance of probabilities.

The Plaintiff pleaded that it has been deprived of the economic benefit of its monies for two years, and seeks general damages of UGX 15,000,000/= (Uganda Shillings Fifteen Million Only).

Section 60(1) of the Contracts Act provides that where there is a breach 15 of contract, the party who suffers the breach is entitled to receive from the party who breached the contract, compensation for any loss or damage caused to him or her.

Furthermore, Section 60(4) of the Contracts Act provides that in estimating the loss, the Court has to consider the means of remedying the 20 inconvenience caused by the non-performance of the contract, which existed at the time.

In the case of *Kabandize John Baptist and 21 Others Vs Kampala Capital City Authority CACA No. 36 of 2016,* the Court held that:

"*The general rule regarding the measure of general damages is that,* 25 *the award is such a sum of money that will put the party who has been injured or who has suffered as adjudged by Court in the same position as he or she would have been had he or she not sustained the wrong for which he or she is getting the compensation*."

5 Further, as was held in the case of *Takiya Kashwahiri and Another Vs Kajungu Denis, CACA No. 85 of 2011,* general damages should be compensatory in that they should restore some satisfaction, as far as money can do, to the injured Plaintiff. The Plaintiff should, however, lead evidence as to what damage he or she suffered at the instance, of the

10 Defendant.

Turning to the case at hand, it was the testimony of PW1 that the Plaintiff by Local Purchase Order delivered to the Defendant 44 pieces of 13R 22.5 Royal Black Tyres at a total cost of UGX 64,664,000/=. However, that the Defendant only paid UGX 2,536,000/=. That despite several demands, the

15 Defendant has failed or neglected to pay the said money. In evidence exhibits PEX 1 to PEX 6 were presented.

Furthermore, PW1 under paragraphs 10 and 11 of his witness statement testified that the Defendant's refusal to pay the outstanding balance for two years has deprived the Plaintiff of the economic benefit of its money

20 which would have been reinvested in the business and earned significant profits. That the refusal to pay has affected its cash flows making it difficult to order new goods from abroad. That the Plaintiff is in the business of importing and selling motor vehicle tyres in Uganda among others.

Considering that general damages ought to as far as money can do, place 25 the Plaintiff who has sustained loss by reason of a breach of contract, in the same situation as if the contract had been performed, the fact that the Defendant did not present any reason for non-payment and that the Plaintiff has been deprived its money meant for business for over two years, I accordingly award UGX 8,000,000/= (Uganda Shillings Eight 30 Million Only) as general damages for the inconvenience and loss suffered by the Plaintiff.

5 Issue No. 2: Whether the Plaintiff is entitled to interest and costs of the suit?

Section 26(2) of the Civil Procedure Act, is to the effect that the Court has the discretion to award interest. As was held in the case of *Milly Masembe Vs Sugar Corporation (U) Ltd and Another SCCA No. 1 of*

10 *2000,* the guiding principle is that interest is awarded at the discretion of the Court, which has to be exercised judiciously taking into account all the circumstances of the case.

In their submission, Counsel for the Plaintiff never submitted on interest but prayed for the same. However, given the fact that the Plaintiff is a 15 business entity and was deprived of its money, it is my considered view that it is entitled to interest. I accordingly award interest at the rate of 20% per annum on the decretal sum from the date of filing the suit until payment in full.

The Plaintiff is also awarded interest on the general damages at the rate of 20 6% per annum from the date of judgment until payment in full.

Costs of the suit

Section 27(2) of the Civil Procedure Act, provides that costs of any action shall follow the event unless otherwise provided. In the case of *Uganda Development Bank Vs Muganga Construction Co. Ltd [1981]* 25 *HCB 35,* Hon. Justice Manyindo (as he then was) held that:

> *"A successful party can only be denied costs if it is proved, that but for his or her conduct, the action would not have been brought. The costs will follow the event where the party succeeds in the main purpose of the suit."*

5 Since there is no reason to deprive the Plaintiff of the costs, it is therefore entitled to the costs of the suit.

In the result, the following orders are issued:

- 1. It is hereby declared that the Defendant breached the terms of the Contract for the supply of Royal Black tyres. - 10

- 2. The Defendant shall pay the Plaintiff UGX 62,128,000/= (Uganda Shillings Sixty-Two Million One Hundred Twenty-Eight Thousand Only) being outstanding monies for the 44 Royal Black tyres supplied to the Defendant on 8th February, 2022. - 3. The Defendant shall pay the Plaintiff general damages amounting to UGX 8,000,000/= (Uganda Shillings Eight Million Only). - 20 4. Interest is awarded on the sum in (2) above at the rate of 20% per annum from the date of filing the suit until payment in full. - 5. Interest is awarded on the sum in (3) above at the rate of 6% per annum from the date of judgment until payment in full. - 25 - 6. Costs of the suit are awarded to the Plaintiff.

I so order.

Dated, signed and delivered electronically via ECCMIS this 23rd day of 30 December, 2024.

Patience T. E. Rubagumya JUDGE 23/12/2024

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