Hared Petroleum Limited v Uganda National Roads Authority (Civil Suit 1080 of 2020) [2023] UGCommC 238 (18 October 2023)

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [COMMERCIAL DIVISION] CIVIL SUIT NO. 1080 OF 2020 HARED PETROLEUM LTD::::::::::::::::::::::::::::::::::::

VERSUS

UGANDA NATIONAL ROADS AUTHORITY::::::::::::::::::::::::::::::::::::

BEFORE: HON. LADY JUSTICE ANNA B. MUGENYI RULING

This is a ruling on a preliminary objection raised by Counsel for the Defendant that the suit is barred by law when it was brought after the expiry of time within which it ought to have been brought contrary to Section 3 (a) of the Limitation Act.

Briefly, the facts leading to these objections are that the Plaintiff had filed this suit for an order for special damages of UGX 2,710,517,032/ for breach of contracts of supply of fuel and other petroleum products, general damages, interest and costs of the suit. That whereas the Defendant had raised the issue of limitation in their written statement of defence filed on 5^th January 2021, the Plaintiff maintains that the suit is not time barred as the Defendant had acknowledged its indebtedness by Memorandum of Understanding executed on 7^th January 2015.

The Plaintiff avers that when the matter came up for scheduling, the parties agreed to go for scheduling wherein they entered a partial consent in the sum of UGX 833,510,944/ leaving a balance of UGX 1,841,642,643 which is now being claimed according to the amended joint scheduling memorandum. The Defendant

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then raised this objection that the Plaintiffs claim date as far back between 2010 and2014 which fall out of the required six- year period from the time the alleged cause of action arose.

REPRESENTATION

The Plaintiff was represented by IWs Habakurama & Co. Advocates whereas the Defendant was represented by the Directorate of Legal Services of the Defendant.

RULING

Counsel for the Defendant submitted that a suit is barred by law when it is brought after the expiry of time within which it ought to be brought. He relied on Section 3 (a) of the Limitation Act which provides that no action founded on a contract shall be brought after six years and added that this suit was filed on 17ft December 2020 which is wholly caught up by the law on limitation as it ought to have been brought within six years fiom the date of the alleged breach. He added that looking at PEX 4 to PEX 30, the Plaintiff has brought claims of supplies dating as far back as 2010, 2011,2012,2013 and early 2014 which fall out ofthe required six- year period.

He added that a legal right to enforce an action is not a perpetual right but a right generally limited by statute. That the least of the invoices is dated August 2014 which is six years and four months and that the rest are dated pre-August 2014. He also submitted that the period of limitation begins to run from the time the cause of action accrues until when the suit is actually filed. He added that the pleadings do not show that the Plaintiff was under any disability which prevented them from seeking timely legal redress against the Defendant. That a plaint is rejected if the suit appears to be time barred under Order 7 rule I I (d) of the Civil Procedure

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Rules. He concluded that the suit is fatally defective and that the Plaintiff s claim should not be entertained but dismissed with costs.

In reply, Counsel for the Plaintiff submitted that the Plaintiff s claim in the sum of UGX 1,841,642,6431 being the contested balance of its original claim of UGX 2,710,517,032l is not time barred pursuant to Section 22 (4) of the Limitation Act which provides that where a right of action accrues to recover any debt and the person liable acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date acknowledgement or the last payment. Counsel added that in PEX2 the Memorandum of Understanding, the Defendant acknowledged being indebted to the Plaintiff and paid a good sum of money towards discharging the debt and that most of the payments were made in 201 5 and 2016.

It was therefore his submission that six years had not effluxed from 7th January 2015 when the Defendant acknowledged its indebtedness and paid to 17s December 2020 when the suit was filed. Counsel further submitted that when the Defendant submitted to the Jurisdiction of the Court, they opted out of arbitration as they even accepted mediation and went on to enter a Consent Judgement executed on 6th May 2022 wherein they agreed that the rest of the claim would be determined by the Court after a full trial.

In conclusion, Counsel added that the Plaintifls claim of UGX 2,710,517,0321 was one claim and not several, wherein the Defendant made part payment in satisfaction of the Consent Decree, therefore, it is strange for the Defendant to claim that it is only the contested balance that is caught by the law of limitation. He added that the authorities cited by the Defendant are good law but not applicable to the circumstances of this case. He prayed that the objection be ovemrled.

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I have carefully considered the submissions of both counsel and addressed my mind to the law on limitation and find as follows. I have noted the submissions by counsel for the Defendant and I totally agree with all of them and specifically for emphasis is that a legal right to enforce an action is not a perpetual right but a right generally limited by statute. It is not disputed that under section 3 (a) of the Limitotion Act actions founded on contract or tort shall not be brought after the expiration of six years from the date on which the cause of action arose. The question for determination therefore, is whether this suit is time barred as Counsel claims that the cause of action arose from 2010 to 2014 as evidenced in the Plaintiff s exhibits PEX4 ro PEX30.

whereas it is true that the unpaid invoices are for 2013 and 2ol4,it is also clear from paragraphs 6 and 7 of the Plaint that the claim is based on the Memorandum of Understanding (PEX2) executed by the parties on 7th January 2015 wherein the Defendant agreed to pay a total not exceeding ucx 17,334,999,112 under Article 4 thereof. Since the suit was filed on lTth December 2020, a strict application of Section 3 (a) of the Limitation Act would mean that the suit is time barred, however, the parties executed PEX2 in 2015 which is considered a fresh accrual of action on acknowledgement or part payment under section 22 (4) of rhe ^Li mitatio n Act, which provides :

" lthere any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate ofa deceased person or to any share or interest in it, and the person liable or accountable therefor aclorcwledges the claim or makes any payment in respect of the claim or makes any payment in respect of the claim, the right shall be seemed to have accrued on and not before the date of acl\*towledgement or the last payment...... "

Going by the above provision, if we are to go by the date of acknowledgement which is 7s January 2015 when PEX2 was executed, the six years of limitation in Section 3 (a) would expire in January 2021 and the suit was filed on lTth December 2020, a month before the six years offresh accrual in Section 22 (4) above elapsed. It is needless to mention that after the suit was filed, the matter went on mediation wherein the parties entered partial consent and that the contested amount is what is now pending trial before this Court.

In the premises, I find that pursuant to Section 22 (4) of the Limitation Act, the objection lacks merit and is hereby dismissed. The present suit should be fixed for hearing on its merits

Costs shall be in the cause.

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HON. LADY JUSTICE ANNA B. MUGENYI DATED lL..l.t.p...l.\*,2