THE REPUBLIC OF UGANDA,
IN THE HIGH COURT OF UGANDA AT KAMPALA
CIVIL SUIT NO 144 OF 2010
FINISHING TOUCHES LTD)........................................................ PLAINTIFF
ATTORNEY GENERAL OF UGANDA).................................... DEFENDANT
BEFORE HON. JUSTICE CHRISTOPHER MADRAMA IZAMA
The plaintiff filed this action against the Attorney General for breach of contract, special damages, general damages, interest and costs of the suit. The plaintiff avers that sometime in 2007 and for a consideration of Uganda shillings 459,550,000/= through an agreement in writing contained in several correspondences from the Ministry of Foreign Affairs, it was agreed that the plaintiff decorates all the Commonwealth Heads of Government Meeting Venues.
The plaintiff alleges that the contract and contract price where admitted by the Ministry of Foreign Affairs in an internal memorandum addressed to the Permanent Secretary of the Ministry of Foreign Affairs by Ambassador Rhoda Kaisho – Sinani dated 28th of December, 2007. The plaintiff agreed to decorate the Commonwealth Heads of Government Meeting at Serena Conference Centre, Entebbe Airport, Imperial Botanical Beach Hotel, Golf Course Hotel, Hotel Africana and the venues for the Minister of foreign affairs luncheons. Upon the agreement the plaintiff promptly and professionally decorated within a time frame all the venues agreed upon and the work was acknowledged by the defendant’s servants.
The plaintiffs officials attended several meetings with officials of the Ministry of Foreign Affairs who agreed to pay the plaintiff a revised fee of Uganda shillings 459,550,000/=. Subsequently and despite several demands for payment the Ministry of Foreign Affairs has wrongly and in breach of agreement failed and refuse to pay the contract price. The plaintiff has lost the benefit of investing the money and suffered financial damage. Consequently the plaintiffs seeks special damages of Uganda shillings 459,550,000/=, general damages, interest on all monies due to the plaintiff at the rate of 22 per cent per annum from the date of default till payment in full, costs of the suit and any other relief that the honourable court may deem fit to grant him the circumstances.
The written statement of defence of defendant denies the claim and pleads that the defendant never executed any agreement with the plaintiff company. Furthermore that there were no meetings held with the plaintiffs officials and that the defendant did not refuse to pay the plaintiff the contract price, as there was no contract executed between the Ministry of Foreign Affairs and the plaintiff.
At the hearing the plaintiff was represented by Counsel Nasser Serunjogi while the Attorney General was represented by Principal State Attorney Patricia Mutesi.
At the scheduling conference the facts and documentary exhibits were agreed and the agreed issues are:
- Whether there was a legally binding contract for decorating services between the plaintiff and the defendant?
- Whether the plaintiff is entitled to the remedies claimed?
The plaintiff relied on one witness statement of Sanji v Patel, PW1. The defendants counsel did not cross examine the plaintiffs witness and the defendant did not call any witness. Nonetheless all documentary exhibits were agreed to by consent of Counsels and marked by the Counsels. The plaintiff’s documentary exhibits are exhibits P1 – P16 while the defendants exhibits were Exhibits D1 – D4. Exhibits D2 and P15 are the same document being a letter dated 20th November 2007 from the Executive Director of the PPDA Authority. Secondly exhibits P16 is also tendered as exhibit D1.
PW1's testimony is that he is the Managing Director of Tomil Fireworks which was part of the consortium represented by the Plaintiff. The consortium provided decoration services to the government of Uganda during the Commonwealth Heads of Government Meeting in 2007. On 23rd of October, 2007 about three weeks prior to the CHOGM meeting, the defendant called upon the plaintiff and other companies including Tomil Fireworks, Applegate, and Faith’s Petals & Creations Ltd which firms later formed a consortium to provide decoration services as contracted. The consortium was invited to another meeting on 26 October, 2007 to make concepts and presentations before they were awarded the contract. By the time all the presentations and concepts were concluded about one week was left to the opening ceremony. The Venues Coordinator requested the Chairman Contracts Committee to procure the consortium expeditiously. Because of the limited time left, the Chairperson Venues Subcommittee gave the consortium a verbal clearance to commence the decorating services and there was an oral contract. There was insufficient time to go through the formal procedures of awarding a government contract. The chairperson CHOGM Activities Inspection Team wrote to Ms Hilda Mubusira, the Deputy Head of Public Service/Executive Director of the Commonwealth Heads of State and Government Meeting 2007 Secretariat requesting her to ensure that decoration of venues is done immediately and retrospective procurement undertaking considered. The defendant promised the plaintiff that they will sign a formal contract retrospectively after the work was done because it was an emergency. Had the plaintiff followed the formal procurement procedures of awarding a government contract, it would have been impossible for everyone to provide the services. Even if the plaintiff had refused to provide the services, because of lack of a formal contract, the defendant would have engaged another company to provide the same services, because the provision of the services was a necessary requirement. The Permanent Secretary Ministry of Foreign Affairs again promised and emphasised to the defendants that the contract would be signed and that accreditation had already been given to the plaintiff to do the work. The Solicitor General informed the Permanent Secretary in his legal opinion that it was the responsibility of the accounting officer to ensure that the procurement process was followed. The plaintiff provided decoration services to the defendant and the defendant accepted the services and the value of the money to be paid for the services rendered. The plaintiff kept on following up the signing of the retrospective agreement to enable them to be paid but in vain. The venues subcommittee of the ministry acknowledged that the work was done satisfactorily as requested and therefore requested the permanent secretary to authorise payment. Consequently PW1 maintains that it was not the fault of the plaintiff that the procurement procedure was not followed and the plaintiff should be paid. Counsels addressed the court in written submissions.
Written submissions of the plaintiff
(1) Whether there was a legally binding contract for decorating services between the plaintiff and the defendant?
On whether there was a legally binding contract for decoration services between the plaintiff and the defendant, counsel relied on the case of JK Patel versus Spear Motors limited Supreme Court civil appeal number 4 of 1991 where it was held that if there was a specific offered to enter into legal relations on definite terms and that offer is accepted, the law considers that a contract has been made. Whether there has been an acceptance of an offer may be inferred from words or documents that have passed between the parties or from their conduct.
Counsels argument is that the plaintiff was invited to several meetings were it made presentations on how to decorate the relevant venues. The Contracts Committee approved the award and promised that a formal contract was to be signed at a later date between the parties. There was no time to enter into the formal contract and hence there was an oral contract. Counsel referred to regulation 110 of the Public Procurement and Disposal of Assets and Regulations which provides for emergency situations in paragraph 2 thereof. These include urgent matters and unforeseeable situations not caused by dilatory conduct. Counsel relied on an internal memo from the Venues Coordinator to the Chairman Contracts Committee dated 12 November 2007 requesting that the consortium be procured expeditiously due to constraints of time. Additionally the Chairperson Activities Inspection Team wrote to the Executive Director of the Secretary it in a letter dated 22 November 2007 recommending that the decoration be done immediately and retrospective procurement explored. Regulation 41 of the Public Procurement and Disposal of Public Assets Regulations 2003 makes an Accounting Officer responsible for the successful execution of the procurement, disposal and contract to management processes in the procuring and disposing entity. A supplier who innocently believes that the internal processes relating to procurement have been adhered to cannot suffer loss as a result of the laxity of the Accounting Officer in executing his or her duties.
Counsel submitted that failure to follow the procedure should not prejudice the plaintiffs from being paid because the plaintiff acted on the promise and negotiations with the Venues Committee. The Chairman Contracts Committee in an internal memo dated 4th of April, 2008 wrote to the Permanent Secretary acknowledging that work was done satisfactorily as procured. The Chairman Contracts Committee further adopted the recommendations of the Solicitor General and requested the Permanent Secretary to authorise payment.
Counsel contended that because the defendant acknowledges that work was done the plaintiff must be paid in spite of the fact that there was no formal contract between the parties. Alternatively the plaintiff’s counsel submitted that if the court finds that the contract is not enforceable under the Public Procurement and Disposal of Public Assets Rules, the court should apply the quantum meruit principle. He relied on the case of Craven Ellis v. Canons Ltd (1936) 2 KB 403, 410 for the principle that even though the contract was a nullity and not binding, that would not prevent an inference of law that performance by the plaintiff of services to the company and the company's acceptance of such services, which if the plaintiff had not performed would have been obtained from some other agent would entitle the plaintiff to recover on quantum meruit. Secondly counsel submitted that the quantum to be paid would be for services rendered as held in the case of Way v. Latilla  3 All ER 759 where Lord Wright held that there was an implied promise by the respondent to pay on quantum meruit what the services were worth. Consequently the plaintiff was entitled to reasonable remuneration.
Additionally counsel submitted that there was an oral contract which was confirmed by the conduct of the plaintiff and the defendant. Counsel contended that non-fulfilment of the public procurement and disposal of public assets procedures laid out in the rules and regulations should not be visited on the plaintiff and the lack of a formal contract should not be a bar to the plaintiffs claim.
Submissions of the defendant in Reply
On whether there was a legally binding contract for decorating services between the plaintiff and the defendant. Counsel for the defendant submitted that there is no valid and enforceable contract between the parties as the plaintiff’s services where procured in violation of the mandatory provisions of the Public Procurement and Disposal of Public Assets Act 2003 (PPDA Act). Counsel contended that under section 3 of the PPDA Act a contract is defined as an agreement resulting from the application of appropriate unapproved procurement or disposal procedures. Additionally counsel submitted that under section 55 of the PPDA Act it was mandatory that all procurement shall be in accordance with the rules made under the Act. The plaintiff's procurement did not comply with the Act and Regulations and was therefore illegal. Counsel referred to the various steps for public procurement which provided that a contract is concluded pursuant to a bid award by a decision of the contract committee or other appropriate authority.
Review of exhibits P3, P4, P6 and P7 show that there is no evidence to prove that the Ministry of Foreign Affairs Contracts Committee approved the award. The documents only show that there was a request to the committee which was not approved before the plaintiff provided its services. Counsel submitted that exhibit P3 which is an internal memo from the Venues Coordinator and requesting the Contracts Committee to procure the plaintiffs services. Exhibit P4 is a letter from the Minister in charge of security recommending that decoration be done immediately and contract executed retrospectively. Exhibit P6 confirms that after meetings with the Venues Subcommittee the plaintiff firm started executing the tasks. Finally exhibit P7 confirms that there was no award or formal contract prior to performance because it recommends that the award and formal contract may be done retrospectively. The evidence shows that there was no contract as defined by section 3 of the PPDA Act. Counsel submitted that the documents show that before the request of the Contracts Committee for an award decision could be approved under regulation 223 (3), the procuring ministry was influenced to accept the plaintiff's services. However in the absence of the contract award decision by the Contracts Committee, there was no valid contract as defined by section 3 of the PPDA Act.
Counsel submitted that the plaintiff's services were procured in the absence of a written contract or agreement or document between the parties. Paragraph 4 (1) of the plaint avers that the parties entered into a contract through an agreement in writing contained in several correspondences from the Ministry of Foreign Affairs. Counsel submitted that a contract could not be inferred from the correspondences because they were not addressed to or copied to the plaintiff. The absence of a written contract document is a manifest violation of the PPDA Act and Regulations. There was no written acceptance in terms of section 76 (3), regulations 225 (1), 228. No authorisation was given or sought under regulations 339 and 340. The evidence is that the plaintiff was aware of the need to follow the procurement procedure including the need to execute a formal contract prior to providing services. Counsel relied on exhibit P1, P2 as evidence of the plaintiff's knowledge.
Counsel further submitted that there was no oral contract executed by the Chairperson Subcommittee and secondly that the law does not recognise the execution of oral contract with government institutions. It was mandatory that such contracts are in a written form. Counsel further submitted that even though the plaintiff was invited to several meetings, the minutes do not disclose that a definite offer and acceptance of all contract terms including the price had been given.
Counsel contended that under section 62 (1) (2) (a) it was mandatory that public procurements use solicitation documents which must have detailed terms and conditions. Counsel relied on the case of Clear Channel Independent (U) Ltd versus PPDA miscellaneous application number 380 of 2008 where honourable Justice Yorokamu Bamwine held that section 62 was mandatory. Regulation 128 (1, (2)) makes the use of solicitation documents for services mandatory. Under regulation 131 (1) (e) solicitation documents must indicate contractual terms, price and costs. It is only those documents which would constitute a legal valid offer for public procurement. Finally under regulations 229 (1) and (2) the contract shall be in accordance with the form in the solicitation documents and shall clearly identify the obligations of each party etc.
The defendant further submitted that the alleged contract was executed when Hon. Hope Mwesigye gave the plaintiff a verbal clearance to start providing services. She was then the Minister of State for Local Government. Counsel contended that the power to make a contract award decision lay with the Contracts Committee or a body within the Ministry of Foreign Affairs. Secondly signing of contracts for procurement or disposal activities on behalf of the procuring and disposing entity is the responsibility of the Accounting Officer. Counsel reiterated submissions that the provisions of section 26 of the Public Procurement and Disposal of Public Assets Act are mandatory. The accounting officer of the Ministry of Foreign Affairs is the Permanent Secretary under section 3 of the PPDA Act.
On the question of the promise to execute a formal contract retrospectively, the PPDA Act and Regulations not authorise the provision of any services to public bodies in the absence of a written contract or bid acceptance letter. Alternatively that there was no evidence that there was a definite promise made to execute a retrospective contract with the plaintiff.
Counsel submitted that the letter from honourable Amama Mbabazi Minister of security recommending that decoration be done immediately and proposing exploration of the possibility of retrospective procurement undertaking do not amount to a definite promise of retrospective contract. Several other arguments were advanced by the defendants Counsel against the plaintiffs claim and all of them reiterate the defendant submissions which may be summarised as follows:
- That there was no written contract that had ever been executed between the parties as required by the provisions of the PPDA Act and Regulations.
- That there was no definite offer and acceptance in terms of the PPDA Act and Regulations.
- The purported actions and commitments taken by or made on behalf of the defendant/government were not taken or made by unauthorised persons as defined by the PPDA Act and Regulations.
- There was no award of contract by the Contracts Committee under the PPDA Act and Regulations.
- Generally the procedure for procurement of services was not complied with.
- As to whether the procurement of the plaintiff’s services was made pursuant to an emergency, the Attorney General's counsel contended that the letter of the PPDA Authority dated 20th of November 2007 refused to consider procurement of the plaintiffs services as an urgent a matter. In any case emergency situations only determine the choice of procurement method and do not waive the procedure for procurement. The procedures for procurement were not complied with in any case.
- On the question of damages and quantum meruit, Attorney General's counsel's submitted that the common law principles do not override the statutory provisions which render the actions of the plaintiff and government officials null and void. Counsel relied on the cases of Kisugu Quarries Versus Administrator General  1 EA page 158; Clear Channel Independent versus PPDA Authority miscellaneous application number 382 of 2008 and the case of Macfay versus United Africa Limited  3 All ER 1169
- Whether the plaintiff is entitled to the remedies claimed?
On the second issue the plaintiff’s Counsel submitted that the defendant does not challenge the plaintiff’s provision of decoration services and the plaintiff is entitled to payment of consideration for the provision of those services. This amounted to Uganda shillings 459,550,000/= being the contract price for decorating all the assigned Commonwealth Heads of State and Government Meeting Venues.
The plaintiff further claimed general damages and cited the principle in new Alobo Ltd versus Moyo Hardwares Ltd HCCS number 364 of 2007, the decision of Honourable Justice Geoffrey Kiryabwire, that the intention of the law is to restore the wronged party to the position he or she would have been in had there been no breach of contract. Pursuant to the defendants breach of contract counsel prayed that the court awards damages at the maximum amount possible in the circumstances.
As far as interest is concerned counsel prayed for interest from the date of filing the action in the High Court. He relied on the case of C. Kiggundu and another versus Uganda Transport Company SCCA number 7 of 1993 where it was held that interest may be claimed from the date of filing the suit when the debt is due at the time of the filing of the suit. Counsel also relied on section 26 (2) of the Civil Procedure Act and submitted that it gives court discretion and in the circumstances of the case interest at the rate of 22% per month from the date of filing the suit till payment in full would be a fair rate. Finally counsel prayed for costs of the suit.
I have duly considered the pleadings of the parties, the witness statement of PW1, the documentary evidence agreed upon and the submissions of both counsels.
The Attorney General does not dispute the fact that the plaintiff provided decoration services to the defendant for the venues of the Commonwealth Heads of Government Meeting in 2007. The defence of the Attorney General is based on points of law whose effect is that procedures laid out in the Public Procurement and Disposal of Public Assets Act 2003 and Regulations made there under were not complied with and consequently there is no enforceable contract between the plaintiff and the government. The point of law raised by the Attorney General does require appreciation of questions of fact as well. As to questions of fact, it is in controversy as to whether the procurement procedure used was generated by an emergency situation and whether in those circumstances the procedure used was not a nullity.
The only witness PW1 Mr Sanjiv Patel testified that on 23 October 2007, three weeks prior to the Commonwealth Heads of Government Meeting the defendant called on the plaintiff and other companies which formed the consortium/plaintiff for a meeting to provide decoration services to all venues of the meeting of the Commonwealth Heads of Government. Exhibit P1 is the minutes of the meeting. The meeting was chaired by the honourable Minister of State for Local Government Mrs Hope Mwesigye. In attendance were several firms listed in the testimony of PW1 set out above. These included the plaintiff. The chairman informed the members namely the prospective decorators that the meeting had been convened to deal with procurement of a consortium of decorators for the venues of the Commonwealth Heads of Government Meeting. It was agreed that the decorators would in the next meeting submit proposals about the scope of decoration for each venue and to develop concepts for each venue for further consideration. They were required to give their company profiles and other relevant documentation to the venues subcommittee to start on the procurement process. The meeting proposed a joint proposal by all the firms to accommodate the interest of all the firms involved.
The consortium which was formed was invited to another meeting on 26 October 2007 to make proposals. The minutes of the meeting exhibit P2 show that it was again chaired by the honourable Minister of state for local government. In attendance included the Chairperson Venues subcommittee Ambassador Rhoda Kaisho – Sinani, Fred Tushabe Coordinator of venues and Sarah Nakamya of the Secretariat who acted as a minute’s secretary. Minute 16/2007 and the way forward is to the effect that for purposes of procurement and given time constraints, one of the companies be procured and contracted to decorate the Commonwealth Heads of Government Meeting 2007 venues. The chosen company would sign a memorandum of understanding with the rest of the companies/firms. They agreed to be collectively responsible for the decoration of all the venues. Subsequently they selected Finishing Touches Ltd as the company of behalf of the consortium to be procured by government. Furthermore admitted in evidence is exhibit P3 which is an internal memo to the Chairman Contracts Committee. It was proposed to the Chairman Contracts Committee by the Venues Coordinator that no single company would achieve the task of decorating effectively the venues for the meeting. This included Serena Conference Centre, Hotel Africana, Golf Course Hotel, Imperial Royale Hotel, Entebbe International airport, and Imperial Botanical Beach Hotel. PW1 testified that by the time all the presentations and concepts were concluded, one week was left to the opening ceremony and the Venues Coordinator requested the Chairman Contracts committee to procure the consortium expeditiously. The Chairperson honourable Hope Mwesigye gave the consortium verbal clearance to provide decorating services.
On 22 November 2007 the honourable Minister in Charge of Security and Chairperson CHOGM Activities Inspection Team honourable Amama Mbabazi wrote to the Deputy Head of Public Service/Executive Director CHOGM 2007 Secretariat on the subject of decoration of key venues. The letter reads as follows:
"Following the inspection of the International Conference Centre, Serena where the CHOGM opening ceremony is to take place, the CHOGM Activities Inspection Team has observed that the place is not yet appropriately decorated.
We have been informed that the problem is with the procurement process. Given the importance and urgency of the matter, we strongly recommend that you ensure that the decoration is done immediately and then explore the possibility of retrospective procurement undertaking."
Pursuant to the letter the Permanent Secretary Ministry of Foreign Affairs in an internal memo addressed to the Chairperson Venues Subcommittee on the subject of decoration for key CHOGM 2007 venues informed the Chairperson of the letter from the Minister in charge of security. He goes on to write in paragraphs 2 and 3 as follows:
"As indicated the chairman is strongly recommending that we ensure that decoration is done immediately and explore undertaking the retrospective procurement process.
The purpose of this memo is to request you to immediately put in place mechanisms to ensure that there is value for money in the decoration of CHOGM 2007 venues. As I indicated to DHS/ED CHOGM 2007 Secretariat in my memo, the Coordinator/Venues should produce the final evidence of decoration work done."
The internal memo is dated 22nd of November 2007. On 28 March 2008 the office of the Solicitor General give an opinion to the Permanent Secretary Ministry of Foreign Affairs in which they wrote that the Minister of foreign affairs had not followed the provisions of the PPDA Act and Regulations. Particularly the opinion relied on sections 55 of the PPDA Act which provides that all public procurement shall be carried out in accordance with the rules set out in the Act and any regulations and guidelines made under the Act. Additionally that under regulation 41 of the PPDA regulations 2003 an accounting officer shall have the overall responsibility for the successful execution of the procurement, disposal and contract management process in the procuring and disposing entity. That it was the responsibility of the accounting officer to ensure that the procurement process was followed. The opinion goes on to say as follows:
"This however, was not done owing to the constraint in time to ensure that work was executed in time for CHOGM 2007. The responsibility therefore lies with the accounting officer to ensure that the decorators are paid for the work executed in spite of the fact that the procurement process was not followed which is no fault of the decorators.
The fact that the procedure was not followed should not affect the payment of the money to the decorators because they acted on the premise ofnegotiations that were entered into with the Venues Subcommittee as evidenced by the minutes of the meeting dated 23rd of October 2007.
The fact that the Ministry of foreign affairs acknowledges the work done, then the decorators are to be paid in spite of the fact that the contracts committee did not award the contract.
Therefore, the absence of the contracts committee award is no bar to the firms getting paid. The fact that this was known as required is no fault of theirs since they executed the work as requested using their own finances.”
At the material time and in the same letter it was the opinion of the office of the Solicitor General that regulation 110 and 110 (3) which provides for emergency situations applied to the plaintiffs circumstances. Finally the Solicitor General recommended retrospective approval of the award of contract to the plaintiffs consortium so that a formal contract is signed which will form the basis for payment to be made by the accounting officer.
Exhibit P8 is an internal memo to the Permanent Secretary Ministry of Foreign Affairs from the Chairman Contracts Committee indicating that the contracts committee sat on 4 April 2007 to consider issues arising from the decoration services offered by Messieurs Finishing Touches Ltd at the cost of Uganda shillings 459,550,000/= exclusive of taxes. They accepted the recommendation of the Solicitor General for authorisation of payment on the ground that the work had been done satisfactorily as requested and the ministry acknowledged that the work was done.
The Attorney General's counsel relied on 4 exhibits. The first exhibit is the memorandum of understanding agreement between the Finishing Touches Ltd, Tomil Fireworks Ltd, Applegate Ltd and Creations Ltd. The parties agreed to jointly provide decorating services for the Commonwealth Heads of Government Meeting in 10 venues. They further agreed that Finishing Touches Ltd will be the lead company to be contracted by the government of Uganda represented by the Ministry of Foreign Affairs and the Ministry of Local Government. The second document relied on by the defendant is a letter from the Public Procurement and Disposal of Public Assets Authority dated 20th of November 2007. The letter is addressed to the Permanent Secretary Ministry of foreign affairs. It refers to an application by letter of the Permanent Secretary and meetings held between the PS and the PPDA Authority. It was a request to consider approval for emergency procurement. The last two paragraphs of the letter are of special mention and are quoted hereunder:
"The Authority further notes that your entity has on several occasions been advised on the criteria for applying for waivers and the necessary documentation required particularly Contracts Committee meetings and an estimated cost of the procurement for which a waiver/deviation is being sought. The MOU signed by the various firms is not dated and appears that your entity and Ministry of local government have already contracted the four (4) firms as per the MOU attached to your letter. It is surprising your entity has continued to submit incomplete applications even for procurements which appear urgent. There is no evidence of the Contracts Committee decision on this matter.
In light of the above, the Authority is not in a position to grant your entity a waiver due to poor planning by your entity for procurements which are foreseeable and failure to submit all the relevant information/documentation relating to this procurement.”
This letter was written before the letter of the Minister in Charge of Security/Chairperson CHOGM Activities Inspection Team dated 22 November 2007 addressed to the Deputy Head of Public Service/Executive Director CHOGM 2007 Secretariat already referred to above. In that letter the Minister recommended that the procurement goes ahead and a retrospective procurement of the undertaking are done. The 3rd document presented by the Attorney General is an internal memo from the Chairperson Contracts Committee addressed to the PS Ministry of foreign affairs dated 04/01/2008. The Chairperson notes that he discussed with members of the committee the scope of the work jointly handled by the Ministry of foreign affairs and the Ministry of local government and the fact that the memorandum of understanding was signed between the parties in the consortium. He also took into account the time factor involved in the exercise that necessitated the course of action taken in the circumstances. Additionally he noted that as a result the Minister in charge of security and Chairperson of CHOGM 2007 Activities Inspection Team strongly recommended in his letter dated 22 November 2007 and to ensure that the decorations are done immediately and to explore the possibility of retrospective procurement. Consequently the actions of the Permanent Secretary Ministry of Foreign Affairs were allegedly founded on the said recommendation. With reference to the final report of the subcommittee and advice of the Solicitor General to secure retrospective authority according to the request of the Minister dated 22nd of November 2007, the chairperson concludes as follows:
"The Committee appreciates the circumstances under which this difficult decision had to be taken for the successful holding of CHOGM 2007 on 22nd – 26th of November in Kampala but has no authority to grant retrospective approval."
Finally in the Attorney General's documents is a loose Minute from the Permanent Secretary Ministry of Foreign Affairs to the Chairman/Contracts Committee making a reference to the advice of the Solicitor General dated 28th March 2008. It was a request for the Minister of foreign affairs Contracts Committee to retrospectively approve the award of the contract so that a formal contract can be signed between the Ministry of Foreign Affairs and Finishing Touches Ltd. The Permanent Secretary noted that this was in line with regulation 110 and 110 (3) of the PPDA Regulations.
The documentary evidence confirms the testimony of PW1 that several Companies had been invited to present their concept papers on how to decorate venues for the Commonwealth Heads of Government Meeting 2007. Subsequent to the meetings the Ministry officials in charge of decorations agreed that a consortium would be formed. The consortium signed a memorandum of understanding with Finishing Touches Ltd which became the front company for the procurement of services for decoration of the Commonwealth Heads of Government Meeting Venues. There is no dispute whatsoever about the fact that the work of decoration was done. The correspondence shows that there was a failure on the part of the government officials to follow the procedures in the PPDA Act and Regulations. It is also apparent that the parties knew that the usual procedures had not been followed. The evidence also shows that it was agreed that procurement procedures would be applied retrospectively but the work would go ahead. Some suggestion was made that the procurement should be treated as an emergency procurement due to limitations in time. The PPDA Authority did not grant a waiver of procedures to the Permanent Secretary Ministry of Foreign Affairs because of failure to submit all the relevant information/documentation relating to the procurement. The PPDA authority noted that the Ministry of foreign affairs and local government had already contracted 4 firms according to a memorandum of understanding availed to the Authority. Secondly there was no evidence of the Contracts Committee decision. Subsequently and upon the advice of the Solicitor General communicated in a letter dated 28th of March 2008 the Permanent Secretary Ministry of Foreign Affairs referred the matter to the Contracts Committee for retrospective procurement as an emergency matter. The Contracts Committee agreed with the advice and requested the PS to process payment. Statutory notice of intention to sue the Attorney General was filed with the Ministry of Justice and Constitutional Affairs, Directorate of Civil Litigation on 15 June 2009 and the plaint was filed on 26 April 2010.
Consequently the narrower controversy in this matter is whether the procurement was properly carried out and whether it was an emergency procurement. There is no controversy about the fact that the usual procurement procedures of advertisement and award by the contracts committee after a bidding process were not followed.
Questions of fact which have been established are firstly, that government officials acting in the course of their employment, invited several companies to make representations for decoration services during the Commonwealth Heads of Government Meeting. These companies were Finishing Touches Ltd, Tomil Fireworks, The Creations Ltd, Applegate Ltd and Malaysian Consultants. According to exhibit P5 the Malaysian consultants were fully funded by the Malaysia Government. It has also been established that the firms were identified by the Venues Subcommittee. There is no evidence on how these firms were identified. The committee agreed that the task was too big for one firm. It has further been established that the several companies listed above formed a consortium and signed a memorandum of understanding with Finishing Touches Ltd which was agreed to be the lead firm dealing with the government. The consortium was aware that the usual procedures for procurement of services had not been followed. They agreed to do the work without being formally engaged using the procurement procedures. Subsequently it was not possible to pay them without fulfilment of the formal requirements for procurement of services by a procurement and disposal entity such as the Ministry of Foreign Affairs. The firms were however irregularly procured to provide decoration services which they did as acknowledged by the government officials. The issue is whether the procurement of the services is a nullity for purposes of enforceability of the claims of the plaintiff.
It has been strongly submitted that under section 55 of the Public Procurement and Disposal of Public Assets Act 2003 all public procurement has to be carried out in accordance with the rules set out in the Act and regulations and guidelines made under the Act. Since there was no contract award the issue of whether the procedures such as advertisements, bidding, evaluation and award of contracts inclusive of the signing of a written agreement/contract were indeed not complied with and it is not in controversy that they were not complied with. It was suggested by the Minister for security that the formal procurement could be done retrospectively. Notwithstanding the law on the formal processes, the venues subcommittee, and other government officials gave a go-ahead to the consortium to carry out the decorations and therefore procured their services albeit irregularly. There is no doubt in my mind that there was non-compliance with the PPDA regulations on procurement of services.
Section 79 of the PPDA Act provides that a procuring and disposing entity shall in respect of each procurement activity use the methods specified in section 80 to 86. In addition the procurement entity is supposed to use any of the disposal methods in section 87 and whenever circumstances demanded conditions for use specified in the Fourth Schedule to the PPDA Act. Specifically section 76 (3) of the PPDA Act provides that a procuring and disposing entity shall first obtain the consent of the authority before it uses any other method other than the ones provided in Part VI of the Act. The use of any other method was rejected by the PPDA Authority according to Exhibit D2 dated 20th of November 2007 from the Executive Director PPDA Authority and addressed to the Permanent Secretary Ministry of Foreign Affairs. It was after the rejection of waiver of procedure that a letter was written by the Minister in charge of security proposing that the firms be engaged and retrospective procurement processes considered. The letter was only a proposal and not a directive by a Minister. It must be noted that the Venues Committee and Subcommittee were not part of the establishment but set up to manage the CHOGM event. I.e. they involved two Ministries.
Subsequently the Contracts Committee of the Ministry of foreign affairs ruled that they had no authority to approve retrospective procurement in the internal memo dated 4th January 2008 exhibit D3. Subsequently Ambassador Rhoda Kaisho - Sinani in her letter written on behalf of the Permanent Secretary Ministry of Foreign Affairs dated 29th of February and marked as exhibit P5, sought the advice of the Solicitor General on the matter. The Solicitor General advised the PS Ministry of Foreign affairs that emergency procurement procedures provided for under regulation 110 could be applied in the letter exhibit P6 dated 28th of March 2008. On the same day the PS Ministry of Foreign Affairs wrote to the Chairman Contracts Committee forwarding the opinion of the SG in the loose minute exhibit D4. The response of the Contracts Committee is exhibit P8 dated 4th April 2008 agreeing with the proposal of the Solicitor General for treatment of the procurement as emergency procurement. Emergency procurement procedures may be described as a restricted domestic bidding.
Section 82 (1) of the PPDA Act provides that restricted domestic bidding is the procurement or disposal method where bids are obtained by direct invitation without open advertisement. Additionally quotation and proposals are simplified procurement and disposal methods which compare price quotations obtained from a number of providers according to section 84 (1) of the PPDA Act. Under section 84 (2) the quotation and proposal method shall be used to obtain competition and value for money to the extent possible, where the value or circumstances do not justify or permit open or restricted bidding procedures. Section 85 (1) defines the procurement or disposal as a sole source procurement or disposal method for procurement or disposal requirements were exceptional circumstances prevent the use of competition. Under section 85 (2) direct disposal or procurement shall be used to achieve efficient and timely procurement or disposal where the circumstances do not permit a competitive method. Section 86 (1) provides for micro procurement or disposal which is a direct simple procurement or disposal method which are be used for very low value procurement requirements. Micro procurement is a method to be used to achieve efficient and timely procurement where the value does not justify a competitive procedure.
Regulation 3 of the Fourth Schedule provides that restricted domestic bidding may be used where supplies, works or services are available only from a limited number of providers; or there is insufficient time for an open bidding procedure in an emergency situation; or the limited value of the procurement or disposal does not exceed the threshold stated in the procurement guidelines issued under the PPDA Act. The advice of the Solicitor General falls under regulation 3 (1) (b) of the Fourth Schedule which provides that restricted domestic bidding may be used where there is insufficient time for an open bidding procedure in an emergency situations. Regulation 3 (2) of the Fourth Schedule provides that procurement or disposal process and restricted domestic bidding shall follow the procurement or disposal procedures prescribed by regulations and include what is stated in the rule as follows: invitation to bid shall be addressed to a limited number of potential bidders without advertising the opportunity in a bid notice. The selection of bidders shall be in accordance with the procedure prescribed by regulation and finally a public bid opening shall be held in accordance with the procedure prescribed by regulations.
Furthermore regulation 6 (1) of the Fourth Schedule provides inter alia that direct procurement or disposal may be used where there is insufficient time for any other procedure such as in an emergency situation or the works services or supplies are available from only one provider. Section 79 (2) provides that the choice of the procurement or disposal method shall first be approved by the Contracts Committee. This is complemented by regulation 106 of the Public Procurement and Disposal of Public Assets Regulations, 2003. It provides in 106 (2) that the choice of a procurement method shall be in accordance with the Fourth Schedule to the Act, the Regulations and Guidelines.
It is apparent from the above provisions that it was the Contracts Committee to approve the choice of procurement method. Regulation 110 provides for emergency situations. It provides that emergency situations shall constitute circumstances that may determine the choice of a procurement method regardless of the estimated value of the requirement. Under regulation 110 (3) a recommendation to use an emergency situation as the criterion for determining the choice of the procurement method shall include a comprehensive justification for its use and shall state the reasons giving rise to the emergency situation. Consequently it supports the other provisions in the Fourth Schedule under the Act that the choice of a procurement method shall be determined by the Contracts Committee.
The evidence of the input of the Contracts Committee is exhibit P8 which is an internal memorandum to the Permanent Secretary dated 4th April 2008 which informed the Permanent Secretary that the Contracts Committee sat on 4 April 2008 to consider the issues arising from the decoration services offered by the plaintiff. They informed the permanent secretary that the contracts committee accepted the Solicitor General’s recommendation that he authorises payment accordingly in order to save the government incurring other costs in case the matter is taken to court. The internal memo does not approve or disapprove the method chosen for the procurement. It agrees with the recommendations of the Solicitor General contained in the letter dated 28th of March 2008 exhibit P6. The last paragraph of the recommendations reads as follows:
"Ministry of Foreign Affairs Contracts Committee should accordingly retrospectively approve award of the contract to the said firms so that a formal contract is signed between the parties. This is the basis on which payment will be made by the accounting officer."
One would have thought that the agreement of the Contracts Committee communicated to the Permanent Secretary Ministry of Foreign Affairs exhibit P8 would have resolved the dispute. This is more so considering that the Contracts Committee in the memorandum to the Permanent Secretary Ministry of Foreign Affairs dated 4 January 2008 exhibit P 14 had rejected the request for granting retrospective authority. They had requested for a comprehensive and final report to be compiled by the users to establish the level of satisfaction and visual evidence. They further held that they had no authority to grant retrospective approval. The last memorandum of 4th April 2008 finally agreed with the advice of the Solicitor General. This agreement to follow the advice of the Solicitor General is retrospective as the services had already been provided and the plaintiffs had requested for payment. This did not lead to payment of the plaintiffs and the plaintiff's had not been paid by the time they filed the action in 2010.
The main thrust of the arguments of the Attorney General in the written submissions is that non-compliance with the mandatory provisions of the PPDA Act and Regulations made there under rendered anything done in disregard thereof null and void. I also found it inappropriate to make arguments under the broad premises of whether there was a contract between the parties and therefore no payment could be made. The premise may be based on the wording of the PPDA Act that an award shall be followed by signing a contract. As has been established above there was no award of contract or the signing of a formal contract. It has been acknowledged by the Ministry of Foreign Affairs and in the various correspondences including the internal memorandums of the Contracts Committee that the plaintiff who represents a consortium of decorators actually did the work. In other words the venues of the Commonwealth Heads of Government Meeting 2007 were decorated and to the satisfaction of the Ministry of foreign affairs. The provision of services was based on the invitation of government officials to the various firms involved. The evidence shows that the firms were selected and subsequently signed a memorandum of understanding with the lead firm namely the plaintiff. The provision of services by the companies represented by the plaintiff showed that the firms concerned accepted to provide the services. The various meetings indicated that the services were provided for money consideration and in fact evaluation was carried out by the relevant government body to establish whether there was value for money. The issues as I noted above is really whether the procurement of the services of the plaintiff representing a consortium of firms was a nullity and unenforceable. There was obviously no formal contract because there was no award of the contracts committee. An award is meant to form the basis for execution of a formal contract. It is also evident from the advice of the Solicitor General referred to above that it was envisaged that a formal contract would be executed between the parties after clearance by the contracts committee. Execution of a formal contract is a requirement under section 76 of the PPDA Act. Section 76 of the PPDA Act provides that for purposes of the Act an award decision is not a contract. Secondly under section 76 (3) it is provided that: "An award shall be confirmed by a written contract signed by both the provider and the procuring and disposing entity only after the conditions set out in subsection (2) have been fully satisfied." Consequently there is no need to rely on common law precedents to establish whether there was a contract between the parties. What is material and as submitted by the Attorney General's counsel is whether the provisions of the statute have been complied with in the procurement. Because the provisions were not been complied with in procuring services the issue would be whether the claim of the plaintiff should be disallowed due to non-compliance with the provisions of the PPDA Act and Regulations made there under. The plaintiff relied on the principle of quantum meruit for the proposition that irrespective of the failure to execute a formal contract or the nullity of the contract, the plaintiff would be entitled to payment for the actual value of the services provided.
The Attorney General's position is that because of non-compliance with the mandatory provisions of the PPDA Act and Regulations made there under, the acts of the procuring authority are a nullity and the plaintiff cannot as a consequence claim under a null and void procurement. Counsel for the Attorney General relied on the case of Clear Channel Independent (U) Ltd versus Public Procurement and Disposal of Public Assets Authority Miscellaneous Cause Number 156 of 2008. In that case the applicant applied for judicial review pursuant to a decision of the Respondent permitting the decision of the Civil Aviation Authority (CAA) to go ahead with the tender process. The Authority had established pursuant to the application of the applicant that there were very many irregularities in the tender process and consequently the grievance of the applicant in the judicial review application was that the respondent erred in law when it allowed the tender process to proceed despite procedural flaws which it had identified and which flaws were a contravention of statutory provisions. The review of the authorities by Honourable Justice Bamwine that a court of law cannot sanction what is illegal and illegality once brought to the attention of the court overrides all questions of pleadings was in the context that the PPDA Authority had overlooked irregularities which were fragrant breach of statutory provisions. He concluded that the award had been made contrary to established procedure and the respondent erred in law to allow the tender process to proceed despite the procedural flaws. In that case the matter was still in the process and an award and contract had not yet been signed but particularly no services had been provided pursuant to a purported award of contract. In this particular case there are procedural flaws and there is an unequivocal acknowledgement of fact by the Ministry of Foreign Affairs and the Contracts Committee that services have been rendered by the plaintiff to the satisfaction of the Ministry of Foreign Affairs/Procuring and Disposal Entity. It is a question of procurement under the PPDA Act and whether it can stand. Was the procurement null and void? It is the Attorney General’s contention that the basis of the claim of the plaintiff is a nullity and unenforceable.
I have further considered the case of Kisugu Quarries vs. Administrator General  1 EA 158 where the Supreme Court of Uganda held that the repossession of property under the Expropriated Properties Act of 1982 was a nullity because the leasehold interest thereof, the subject of repossession had been executed contrary to section 2 of the Land Transfer Act which prohibited transfer of land to non-Africans without consent of the Minister. They held that a lease executed in contravention of section 2 of the Land Transfer Act is without exception an illegal contract and the court cannot be used to enforce an illegal contract even if both parties executed it willingly. Again in that case the court dealt with the legality of a lease which is a formal document. This formed the basis of an application for repossession under the Expropriated Properties Act 1982. Because the interest in the lease was a nullity pursuant to section 2 of the Land Transfer Act the court found that they could not enforce the provisions of the Expropriated Properties Act 1982 which reverted property back to Ugandan Asians who had been dispossessed by the Amin regime in 1972.
The case confronting the court concerns invitation to private firms to provide services to the State which hosted the Commonwealth Heads of Government Meeting 2007. The request to the companies to carry out the decorations was done not in accordance with or was done in contravention of the Public Procurement and Disposal of Public Assets Act, 2003 and the Public Procurement and Disposal of Public Assets Regulations, 2003. The relevant provisions which have been breached through non-compliance have been set out above. Nonetheless the companies provided the services. There is no dispute that the services were provided to the satisfaction of the Ministry of Foreign Affairs and the Venues Subcommittee. In such cases the consideration would be whether the use of the words "shall" in the relevant provisions of the PPDA Act and Regulations should be construed as mandatory or directory.
According to H.W.R. Wade in his textbook, Administrative Law, and Fifth Edition at page 218:
"Non-observance of a mandatory condition is fatal to the validity of the action. But if the condition is held to be merely directory, its non-observance will not matter for this purpose." According to Wade (supra) the distinction between mandatory and directory enactments or rules is not quite clear cut: "... since the same condition may be both mandatory and directory; mandatory as to substantial compliance, but directory as to precise compliance."
In Cullimore v Lyme Regis Corporation  3 All ER 1008 Edmund Davies J at pages 1011 – 1012 reproduced the principles for determining whether an enactment is mandatory or directory enactment from Maxwell on Interpretation of Statues as follows:
“Every case where questions of the kind raised here come before the court has to be determined primarily by looking at the statute which is under consideration and examining the whole scope and purpose thereof. Other cases may provide some assistance in determining what the general principles to be applied are, and those general principles are conveniently stated in summary form in Maxwell on Interpretation of Statutes (10th Edition), at p 376:
“It has been said that no rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequence in its disregard, or as imperative, with an implied nullification for disobedience, beyond the fundamental one that it depends on the scope and object of the enactment … A strong line of distinction may be drawn between cases where the prescriptions of the Act affect the performance of a duty and where they relate to a privilege or power. Where powers, rights or immunities are granted with a direction that certain regulations, formalities or conditions shall be complied with, it seems neither unjust nor inconvenient to exact a rigorous observance of them as essential to the acquisition of the right or authority conferred, and it is therefore probable that such was the intention of the legislature. But when a public duty is imposed and the statute requires that it shall be performed in a certain manner, or within a certain time, or under other specified conditions, such prescriptions may well be regarded as intended to be directory only in cases when injustice or inconvenience to others who have no control over those exercising the duty would result if such requirements were essential and imperative.”
A little later, referring to a judgment of Sir Arthur Channel, in Montreal Street Ry Co v Normandin ( AC at pp 174, 175), Maxwell continues, at p 381:
“On the other hand, where the prescriptions of a statute relate to the performance of a public duty and where the invalidation of acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and government of those on whom the duty is imposed, or, in other words, as directory only.” (Emphasis added)
According to H.W.R. Wade (supra) sometimes legislature makes it plain what the effect of non-observance of a statute is to be but very often it does not and when that is so the court must determine the question. The court does this by weighing the inconvenience of holding the condition ineffective against the inconvenience of insisting upon it rigidly. He goes on to say at page 219:
"It is a question of construction, to be settled by looking at the whole scheme and purpose of the Act and by weighing the importance of the condition, the prejudice to private rights and the claims of the public interest.”
The same principle was discussed in the case of Coney versus Choyce and others; Ludden v Choyce and others  1 All ER 979 where the court relied on the explanation on the matter by a textbook on Judicial Review. Per Templeman J at pages 988 – 989:
De Smith’s Judicial Review of Administrative Action. After hinting that the law might have been in a bit of a mess, he continues:
‘When Parliament prescribes the manner or form in which a duty is to be performed or a power exercised, it seldom lays down what will be the legal consequences of failure to observe its prescriptions.’
‘The courts must therefore formulate their own criteria for determining whether the procedural rules are to be regarded as mandatory, in which case disobedience will render void or voidable what has been done, or as directory, in which case disobedience will be treated as an irregularity not affecting the validity of what has been done (though in some cases it has been said that there must be “substantial compliance” with the statutory provisions if the deviation is to be excused as a mere irregularity). Judges have often stressed the impracticability of specifying exact rules for the assignment of a procedural provision to the appropriate category. The whole scope and purpose of the enactment must be considered, and one must assess “the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act”. Furthermore, much may depend upon the particular circumstances of the case in hand. Although “nullification is the natural and usual consequence of disobedience”, breach of procedural or formal rules is likely to be treated as a mere irregularity if the departure from the terms of the Act is of a trivial nature, or if no substantial prejudice has been suffered by those for whose benefit the requirements were introduced, or if serious public inconvenience would be caused by holding them to be mandatory, or if the court is for any reason disinclined to interfere with the act or decision that is impugned.’
The summary of the authorities is that where legislature has used the mandatory words such as "shall" for doing something and does not prescribe the consequences of failure to do as prescribed, it is the duty of the courts to examine the purpose of the enactment and the importance of the condition imposed in the section or rule. Secondly the court considers whether there is any prejudice to private rights or injustice to those who have no control over those entrusted with compliance with the conditions imposed in the rule or section. The court also considers the claims of public interest in the enactment. It is upon considering all the factors that the court would decide whether any particular condition imposed in the rule or section is mandatory or directory. Where it is mandatory, the actions done in disregard of the condition or directive is void or a nullity. On the other hand if the court holds that the provision is directory, non-compliance would not to render the acts done in disregard of the statutory provision void though the persons entrusted with enforcement of the provision may be punished for non-compliance. Because no general rule may be laid, courts should treat the determination of whether a rule or section is mandatory or directory on the circumstances of the case and on a case by case basis. According to Halsbury's laws of England Fourth Edition Reissue volume 44 (1) paragraph 1238:
"Requirements are construed as directory if they relate to the performance of a public duty, and the case is such that to hold void acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, without at the same time promoting the main object of legislature."
I have carefully considered the statutory provisions imposing the duties or conditions for procurement of services. First of all the objectives of the PPDA Act can be deduced from section 6 (a) of the PPDA Act which gives the objectives of the Authority. The PPDA Authority was established to ensure the application of fair, competitive, transparent, non-discriminatory and value for money procurement and disposal standards and practices. Fairness relates to the procedure for those who apply to provide the supply of goods or services procured by government or public bodies. Competition and transparency address corruption, best practices, and ensures that there is value for money. Non-discrimination ensures that the public are able to bid for the supply of goods and services and are evaluated on merits set up by and on the basis of the standards applied by the Authority. There should be no favouritism in procurement. However the defendant has not alleged or proved corruption in the selection of the few firms concerned with decoration services. The few firms selected by the defendants servants cooperated and formed a consortium with the plaintiff as a front.
The argument may therefore be advanced that failure to advertise or apply an open bidding procedure was in breach of the core values of the PPDA Act to open procurement to competitive bidding. However, it is apparent that the public officials who were duty bound to comply with the PPDA Act, applied a restricted bidding process which is also permitted by the Act. There is therefore a narrower question as to whether there was substantial compliance with the requirements of the procedure or method that they purportedly relied upon.
Counsel for the defendant relied on section 55 of the PPDA Act to advance the argument that anything done in contravention thereof was a nullity. Section 55 of the PPDA Act provides that all public procurement and disposal shall be carried out in accordance with the rules set out in Part V of the Act and Regulations and Guidelines made under the Act. It is a general provision which sets out the manner of carrying out public procurement and disposal. The Attorney General's assertion is that the procurement had not been carried out in accordance with the PPDA Act and Regulations and Guidelines and was therefore null and void because of use of mandatory language under section 55 above. This general conclusion however relates to the actual procedures used on the issue of whether there was non-compliance with the statutory provisions relevant to the procurement.
The additional provisions relied upon by the Attorney General include section 29 (c) which provides that the Contracts Committee shall award contracts in accordance with applicable procurement or disposal procedures as the case may be. Section 29 (a) (i) provides that the Contracts Committee shall authorise the choice of the procurement and disposal procedure. This appears to be consistent with the submission based on section 94 of the PPDA Regulations 2003 which provides that the Contracts Committee or holder of a delegated authority shall approve the choice of a procurement method prior to commencement of the procurement process. As far as the evidence in this matter is concerned, various minutes and correspondence reviewed above demonstrate clearly that the authority of the Contracts Committee had been sought after the procurement of the services of the plaintiffs. Consequently there is an apparent breach of the condition that approval of the Contracts Committee has to be sought prior to the procurement method chosen. The duty to seek the consent of the Contracts Committee is placed on the procurement and disposal entity.
The Attorney General relied on regulation 223 which deals with adjudication and award of contract decision by the contracts committee, regulation 225 which deals with the procedure for award of contract. As far as these regulations are concerned the evidence is that there was no formal award of contract prior to provision of services.
The Attorney General further relied on the failure to use solicitation documents in terms of section 62 (1) (2) (a) of the PPDA Act. This section provides that the procuring and disposing entity shall use the standard documents provided by the authority as models for drafting all solicitation documents for each individual procurement or disposal requirement. Prior written authority of the PPDA Authority to use other conditions other than those of the General Conditions of Contract is required. I have further examined regulation 128 (1) (2) of the PPDA regulations. Regulation 128 (1) provides that the use of standard solicitation documents issued by the authority as a basis for each individual solicitation documents shall be mandatory except where otherwise provided for in the regulations. Secondly a Procuring and Disposal Entity shall use the appropriate standard solicitation documents issued by the Authority for each procurement requirement. The evidence is that solicitation documents were not used or not adduced in evidence. The duty so to do is on the Procuring and Disposal Entity and Contracts Committee.
The Attorney General's counsel also relied on regulation 339 which deals with conditions for deviations. It provides that the use of procurement or disposal method or documents under regulations may be deviated from as may be permitted by the Authority. The grounds for deviations are included in the provision and I do not need to set them out. The duty to seek authority is placed on the Contracts Committee.
Apart from the general provisions of section 55 of the PPDA Act, so far, the provisions revised above place duties on the Contracts Committee and the Procurement and Disposal Entity who are servants of the defendant. Lastly there was submission that regulation 110 which deals with emergency situations was not complied with. It is true there was no prior approval of the method used in procuring the services of the plaintiff. Instead there have been attempts to obtain a retrospective approval for services already had from the plaintiff. There is no allegation that the services were inadequate, or corruptly obtained or that there was no value for money. One of the tenets of the PPDA Act is that procurement must obtain value for money. The Contracts Committee has expressed itself on the matter and found that there was satisfaction and value for money according to the evaluation carried out retrospectively. It can be concluded that one of the objectives of the PPDA Act had been met.
My conclusion is that there has been a breach of duty on the part of the Venues Subcommittee, and all the officials who sought procurement of the services of the plaintiff without going through the Contracts Committee prior to sourcing those services. There has been a submission that the plaintiffs were not innocent because they knew that the relevant procedures in the various provisions discussed above have not been complied with. I must say that the plaintiffs and the consortium they represent had various discussion meetings. They were required to make representations on the decoration they intended to provide. They were not forbidden by the PPDA Act and Regulations from doing so.
A review of regulation 6 (1) of the Fourth Schedule shows that the procurement and disposal entity may use the method of direct procurement where there was insufficient time. In their meetings, it was generally argued that there was insufficient time because of the pending commencement of the Commonwealth Heads of State and Government Meeting 2007. Secondly we noted that the choice of procurement method had not been approved by the Contracts Committee. Thirdly no justification for use of other methods due to emergency situations under regulation 110 (3) had been presented to the Contracts Committee. Fourthly the choice of method was the preserve of the Contracts Committee. Finally there was no award of contract or a written contract.
The written contract was supposed to be a retrospective consummation of the method chosen by the procuring and disposal entity. Whereas it is true that there was non-compliance with established procedures as set out above, the contracts committee subsequently agreed with the methodology chosen albeit after the event. They ratified the process. The method of resolution of the failure to comply with the regulations was recommended in the letter of the Solicitor General dated 28th of March 2008 exhibit P6. The Solicitor General writes on behalf of the office of the Attorney General as the principal legal adviser of the government. In the last paragraph of the letter quoted above the recommendation was that the
"Ministry of Foreign Affairs Contracts Committee should accordingly retrospectively approval award of the contract would be said firm so that a formal contract is signed between the parties. This is the basis on which payment will be made by the accounting officer."
This letter was forwarded to the contracts committee by the Permanent Secretary Ministry of Foreign Affairs exhibit D4. Subsequently the contracts committee in the loose minute addressed to the Permanent Secretary admitted as exhibit P8 by the consent of both Counsels proves that the Contracts Committee accepted the recommendations of the Solicitor General and asked the Permanent Secretary to authorise payment accordingly. The issue would have been whether the Contracts Committee had the discretion and power to approve the procurement and disposal method used without seeking their prior approval. That is not a matter before the court.
Consequently it is my finding that the provisions of law which were not complied with were formal requirements because in substance the objectives of the PPDA Act were met. Secondly, the provisions which had been breached by the authority placed duties on the authority namely the Contracts Committee and the Procuring and Disposal Authority/Permanent Secretary Ministry of foreign affairs and not the plaintiffs. The public duty placed on the government officers was directory. To hold otherwise would work serious injustice on the plaintiff who represents the consortium of companies which provided decoration services for the Commonwealth Heads of Government Meeting 2007 venues. The plaintiffs were engaged by the servants of the defendants and incurred costs to provide the services. The services were appreciated by the concerned Ministry of the defendant. The plaintiff and the consortium had no power over the actions of the government officials so as to obtain the requisite permissions and authority of the Contracts Committee. I must add that the government officials are culpable in so far as the alleged breaches of statutory provisions are concerned. The defendant never alleged or proved corruption or impropriety on the part of the procuring and disposal entity or officials assigned to deal with the decorations of the CHOGM venues such as the Venues Committee. Moreover it is hard to suggest that any business should refuse to supply services on the offer of a department of government where assurances were given that contracts would be signed later. As submitted by the plaintiff the business would go to someone else if the plaintiffs refused. Moreover the issue of legality of procurement is being raised after the procuring and disposal entity enjoyed the services of the plaintiff and there was satisfaction. It would be unjust for the plaintiff not to be remunerated when the alleged acts of non compliance were the acts of the defendants servants.
On the first issue thereof of whether there was a legally binding contract for decorating services between the plaintiff and the defendant, it is the finding of this court that the permanent secretary upon clearance by the Contracts Committee was under obligation to retrospectively regularise the procurement of the services of the plaintiff representing a consortium of companies which carried out decorations during the Commonwealth Heads of Government Meeting 2007 venues. This was a formality for payment and does not detract from the finding that the plaintiff’s services were procured and the acts of the defendant’s servants were not void in that regard. Failure to regularise the procurement of the services of the plaintiff worked injustice because the plaintiffs remained unpaid for services procured and which had been cleared by the Contracts Committee.
I have carefully considered the submissions of the parties and there is no dispute that the document exhibit PE 8 proves that the plaintiff is entitled to a negotiated and outstanding sum of Uganda shillings 459,550,000/= excluding taxes. VAT is chargeable in accordance with the law.
As far as the claim for general damages is concerned, the Attorney General submitted that the claim for breach of contract cannot stand under the quantum meruit doctrine. The plaintiffs claim is based on clearance by the Contracts Committee for a negotiated amount which remained outstanding since 2008. The evidence of PW1 which is contained in the witness statement of Sanjiv Patel and which is uncontested does not give the relevant factual basis of how the consortium of firms suffered general damages. Counsel for the plaintiff left it to the court to weigh the circumstances and come up with the “highest award possible.” All I can say is that the plaintiffs have been put to great inconvenience by the failure of the Permanent Secretary to carry out the recommendations of the contracts committee to execute a formal contract and process payment on the negotiated amount. The Court awards the plaintiffs 20% of the outstanding amount as general damages.
As far as the claim for interest is concerned, the plaintiff relied on section 26 (2) of the Civil Procedure Act which gives this court discretion to award interest. The plaintiff prayed for interest at 22% per from the date of filing the suit till payment in full. The Attorney General on the other hand submitted that if the court is inclined to award interest, it should be at court rate. I agree that the court has discretion to award a reasonable interest under section 26 of the Civil Procedure Act. Taking into account the fact that the commercial court deals with commercial disputes, interest at the rate of 20% per annum from the date of filing the action up to the date of judgment and interest at 18% per annum from the date of judgement till payment in full is awarded to the plaintiff.
The basis of the Attorney General's submission that costs should not be awarded is that there was illegality which rendered the procurement a nullity. In the judgment above I have indicated that the duty to comply with the statutory provisions was on the part of the defendant's servants. In the circumstances the plaintiff is entitled to costs and costs are accordingly awarded to the plaintiff to be taxed by the taxing master.
Judgment delivered in open court the 1st day of February 2013.
Christopher Madrama Izama
Judgment delivered in the presence of:
Richard Adrole for the defendant
Counsel for plaintiff absent
Charles Maweno director of Finishing Touches in court
Sanjiv Patel Director of Tomil Fireworks in court
Charles Okuni: Court Clerk
Christopher Madrama Izama
1st February 2013