THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
HCT - 00 - CC – CS - 155 - 2014
- DEI MINERALS INTERNATIONAL LIMITED
- MAGOOLA MATTHIAS ::::::::::::: PLAINTIFFS
1.VIDEOCON INDUSTRIES LIMITED
2.VENUGOPAL N. DHOOT
3.VIDEOCON HYDROCARBON HOLDINGS LTD
4.MARDEN XAVIER FERNANDES
6.ANJAY PRAKASH MOHNOT
7.EMERALD ENERGY DMCC
8.STAR ENERGY TRADING :::::::::: DEFENDANTS
BEFORE: THE HON. JUSTICE DAVID WANGUTUSI
J U D G M E N T:
Dei Mineral International Limited, is a company dealing in minerals and mines, referred to as the 1st Plaintiff and Magoola Matthias a businessman and Managing Director of the 1st Plaintiff, as the 2nd Plaintiff jointly brought this suit against Videocon Industries Ltd 1st Defendant Venugopal N. Dhoot 2nd Defendant, Videocon Hydrocarbon Holdings Ltd – 3rd Defendant, Marden Xavier Fernandes – 4th Defendant, Suresh Hedge – 5th Defendant, Anjay Prakash Mohnot – 6th Defendant, Emerald Energy DMCC – 7th Defendant and Star Energy Trading – 8th Defendant.
The Plaintiffs seek damages for breach of contract as a consequence of being deprived of their mining licences, loss of mines and earnings.
The background to this suit as got from the evidence of PW1 and the pleadings is quite straight forward. The 2nd Plaintiff had set up the 1st Plaintiff a mineral company in which he was the Managing Director.
Using the 1st Plaintiff as a platform, the 2nd Plaintiff applied for and obtained two mining licences. These licences were in respect of Kirwa Wolfram mines located in Kisoro District and Mwerasandu Tin Mines located in Ntungamo District.
Evidence on record indicates that Kirwa Wolfram mines is the largest Tungsten/Wolfram Mines in East Africa. Mwerasandu Tin is also the largest Tin Mines in Uganda.
The 1st Plaintiff acquired a prospecting licence on 14th September 2006 Exh P.2 an Exploration Licence No. 0744 in respect of Mwerasaendu on 23rd November 2006 Exh. P.2,an Environmental Impact Assessment Certificate in respect of Kirwa Wolfram Mines Exh. P.3 and paid all the requisite government assessment fees. The Plaintiffs also acquired a location licence in respect of Mwerasandu Tin Mines No. LL 0181 which the Plaintiff later surrendered to Government to pave way for the transfer of licences to Videocon Natural Resources P.L.C.
Armed with the foregoing the 1st Plaintiff was very attractive to foreign investment. It did not take long, for in late 2006, agents of Videocon Industries Ltd an Indian Company approached the Plaintiffs and made proposals of joint ventures. The discussions resulted into a Memorandum of Understanding between Emerald Energy DMCC/Videocon Hydrocarbon Limited, Dei Minerals International Ltd and Star Energy Trading FZC – Exh. P.6.
The Memorandum of Understanding recognized that the 1st Plaintiff was carrying on business in Uganda. That it had two mines; Kirwa Wolfram Mine and Mwerasandu Tin Mine. The Memorandum of Understanding also recognized that both mines had been operationalised by the 1st Plaintiff who had acquired, mining licences for both mines, had carried out a pre-feasibility study, an impact assessment, paid fees for licences, royalties and Government taxes, acquired equipment, hired personnel and provided security.
Most of all the parties recognized the quantities of the minerals in these words;
“Kirwa Wolfram Mine having proven Ore reserves of six million metric tonnes of Tungsten (also referred to as “Wolfram”) and Mwerasandu Tin Mine estimated to have a resource of over three million tonnes of Tin Ore which will form the basis/with DMIL’s equity in the company (basis of valuation) 100%”.
The parties agreed to form a new company floated in London so as to enable the new entrants to get shares. It is to this new company that all the shares of the Plaintiffs would be transferred and each party including the 2nd Plaintiff would acquire shares. The 1st Plaintiff was to provide all co-ordination, legal work and enable a smooth transfer of the assets to the new company. The parties endorsed the Memorandum of Understanding on 20th December 2007.
Following the Memorandum of Understanding Exh. P.6 a company Videocon Natural Resources PLC was incorporated. This company was fully owned by Videocon Industries Ltd, the 1st Defendant who were the majority shareholders, the Plaintiffs and one Francis Ife and Marden Fernandes D4 were also shareholders. Other shareholders were Shigdy and Daway.
As Exh. P.10 indicates a Certificate of Incorporation No. 6511265 was issued in the United Kingdom on the 21st February 2008. This was followed with a corresponding Registration in Uganda Exh. P.11. This registration dated 22nd April 2008 in pursuance of Section 370 Part x of the Companies Act served to certify that Videocon Natural Resources PLC had been incorporated in England.
It is then in this context and in implementation of the Memorandum of Understanding Exh. P.6 that the Plaintiffs effected the transfers of Exploration Licence No. 0144 as Exh. P.8 shows. The Transfer of Exploration Licence No. 0144 in part reads;
“In accordance with regulation 15, provision to regulation 62(g) of the Mining Regulations, 2004 and provision to Section 93(1) of the Mining Act, 2003, the Exploration Licence No. 0144 bearing Registered Mining Instrument No. 00147 granted on 23rd November 2007 herewith attached is transferred from Dei Minerals International Limited P. O. Box
35854, Kampala to Videocon Natural Resources PLC of P. O. Box 23507, Dubai, UAE with effect from 11th August 2008”.
PW1 told Court that after this transfer, an Exploration Licence was granted to the Defendants, Exh. P.9. This licence which was to last 3 years enabled the Defendants to prospect for Wolfram.
These processes which had resulted from the many positive provisions of the Memorandum of Understanding Exh. P.6 were never to be. The Defendants did not put in the US$100 million. Plant and Machinery and equipment were not bought. Transportation, logistics, sales and exports were never put in place as had been agreed.
When Government of Uganda did not receive the quarterly returns that were a must under the Mining Regulations and also realized that the money, that was supposed to have been injected into the mineral exploration was not forthcoming, it exerted pressure on the Plaintiffs, warning them of the breach and threatening revocation of the licences.
These licences were not renewed when they expired on the 22nd November 2009. The Plaintiffs brought this action against the Defendants.
Court record indicates that service of Plaint and summons to file a defence was effected on the 10th April 2014. No defence was filed by the Defendants 1,2,3,4,5, 7 and 8 within the prescribed time. On the 4/6/2012 Counsel for the Plaintiff applied for judgment in default against the Defendants. On the same day the Registrar entered judgment against all and the matter was set down for formal proof.
Just before the hearing, the Plaintiffs withdrew claims in respect of the 4th, 5th and 6th Defendants. They also withdrew claims against the 7th and 8th Defendants where the 6th Defendant had been the majority shareholder and they had since been wound up. The suit thus proceeded against the 1st Defendant Videocon Industries Ltd, 2nd Defendant Venugopa N. Dhout and Videocon Hydrocarbon Holdings Ltd.
The Plaintiff sought a declaration that the Defendants committed a breach of contract.
A declaration, that the mining licences that the Plaintiff had transferred to the Defendants were never returned. That failure to return the licences to the Plaintiff led to their loss of the mines, business and profit.
Furthermore, a declaration that the Defendants are therefore liable in damages and interest with costs.
The first issue therefore to be considered is whether the Plaintiff indeed owned licences and did transfer them to the Defendants. There is no doubt that the Defendants were owners of lincences in respect of Kirwa Wolfram Mine and Mwerasandu Tin Mine. Proof of this ownership is found in Exhibits P.2, P.3 and P.5, a prospective licence issued on 14th September 2006. As for the transfer of these licences to the Defendants, Exhibit P.6 which is the Memorandum of Understanding clearly spells out the obligations of the parties and one of the obligation was that on the incorporation of the new company, the Plaintiffs would transfer the licences to the Defendants. The proof of transfer of these licences is clearly spelt out in Exhibit P. 8 headed.
“TRANSFER OF EXPLORATION LICENCE NO. 0144”.
Here the Plaintiffs, being the holders of exploration licences No. 0144 registered under Mining Instrument No. 000147 granted on 23rd Nove,er 2007, transferred it to Videocon Natural Resources PLC on 11th August 2008.
Another piece of evidence that shows the Plaintiffs transferred the licences to the Defendant’s company in fulfillment of its obligations in the Memorandum of Understanding – Exhibit P.6, is the exploration licence granted to Videocon Natural Resources PLC – Exhibit P.9. As already seen above, this transfer of licences to Videocon Natural Resources PLC was a condition requirement between the Plaintiff and the Defendant to enable the Defendants obtain some of the shares that were originally solely owned by the Plaintiff.
The registration of Videocon Natural Resources PLC is shown to have been registered in England on 21st February 2008; Exhibit P. 10 and registered in Uganda on 22nd April 2008; Exhibit P. 11. From the foregoing, there is therefore no doubt that a transfer of licences was effected as agreed upon by the parties in the Memorandum of Understanding.
Turning to whether the Defendants breached the Memorandum of Understanding, it is necessary to consider the terms of the agreement. Exhibit P.6 was based on a promising context, before the execution, Maden Fernandes, the Managing Director of Videocon Natural Resources MDCC, a company owned by Videocon Natural Resources MDCC, a company owned by Videocon Industries Ltd wrote to the 2nd Plaintiff who was the Managing Director of the first Plaintiff. In this letter, Exhibit P.7 headed Kirwa Wolfram Mine and Mwerasandu Tin Mines in Uganda, he confirmed the investment into the development of both mines. He said this would be done upon completion of incorporation in England of Videocon Natural Resources PLC (London) (VNR PLC); that this would be followed by registration of the company in Uganda. The other requirement spelt out in Exhibit P.7 was that after VNR PLC in Uganda was registered, the 1st Plaintiff would transfer 99% of its shares to the new company, all the mining licences and rights which would then be followed by an official launch. He gave assurances that Videocon was a listed company on Mumbai Stock Exchange; that they would then appoint a general manager, recruit personnel/employees and create new job opportunities for the people in Uganda.
The 2nd Plaintiff would among others, be a member of the board of directors. They were prepared to inject 100 million dollars immediately into the venture. This was then the understanding that resulted into the basis upon which the Memorandum of Understanding was signed. The transfers of licences and shares that were provided for in the Memorandum of Understanding were all executed by the Plaintiff.
After the Plaintiff had fulfilled their obligations they waited for the Defendants to do their part. The Defendants failed to do their part and the Government of Uganda exertered pressure on the Defendants to fulfill their obligations. This resulted into a notice of revocation by Government of Uganda. The desperate position in which the Plaintiffs, were led to the writing of Exhibit P.12 to the 2nd Defendant on 7th August 2009 a letter expressing their disappointment. It reads in part:
“As you are aware we have formed VNR PLC at London to manage two mining projects in Uganda within last year. However, inspite of numerous commitments given by Mr. Fenandes to conduct the study of both mines until todate, no action has been taken. This has resulted into an embarrassing position for us before the Ministry of Energy and Meneral Development in Uganda. And now they have issued a notice to revoke the licence granted to us for both mining projects. The communications made between Mr. Fernandez and us were just mere promises that have been made.”
Furthermore, the 100 million dollars that the Defendants promised to inject in the project was never done. The mine development and operations strategy that had been promised by the Defendants was also not done because of the Defendant’s failure to fulfill its obligations. The provisions of the Memorandum of Understanding of Exhibit P.6 were fundamental in the execution of the Memorandum of Understanding and any one who failed to do his part would be breaching the contract the parties had entered into. Since the Plaintiffs transferred the lincences of both mines and the 99% shares as provided for in Exhibit P.6, they fulfilled their part of the contract. The Defendants, having failed to inject the 100 million dollars thus rendering the operations of the mine impotent, were in breach of their obligations in the contract.
With regard to whether the Defendants should have returned the licences of the two mines, I have already found above that the Defendants were in breach of the contract and since they were in breach, it was their duty to return the Plaintiff to the position they had been in before they entered into this business relationship with the Defendants. This meant that the Plaintiff had to recover their mining licences.
Turning to whether the licences were returned or not; the Plaintiffs through PW1 testified that when they realized that the Defendants had no intentions of pushing their venture to the next level, they requested that to minimize losses, the licences of the two mines be returned.
It is the evidence of PW1 that they beseeched the Defendants to return the licences in vain. Exhibit P.12 written to the 2nd Defendant on 7th August 2009, the Plaintiffs exhibited fear that the licences would be revoked due to inactivity. The Director of the Plaintiffs in part wrote:
“Sir, as of today, we are under tremendous pressure from the Ministry and we have lost heavily and spent huge amounts of funds to obtain both mining licences. If these licences are revoked by the Ministry, the image of Videocon Group in front of the Ugandan Government will not be well but truly tarnished.
Mr. Fernandes on numerous occasions had confirmed that Videocon Natural Resources is willing to transfer the shares back to us, but up to now nothing has been done. However, we request you to sign a board resolution to this effect and send it to us so that we can commence the process to transfer without further delays.”
The Defendants, knowing that they had the Plaintiffs up against a wall, asked them to waive any form of claim against them before they could release the licences.
In Exhibit P. 15, Anjay. P. Mohnot writing on behalf of the Defendants wrote to the 2nd Plaintiff on 20th October 2009 as follows:
“Dear Brother Magoola,
I can only feel sorry for the current situation, for which it is difficult to fix blame on anybody. All I can do is truly sympathise with the current state of the situation.
Mr. Fernandes will be happy to sign the form (please give him the original letter of no claim before he signs, without the original letter of no claim, he will strictly not sign) and then you are welcome to Dubai, and I am happy to sign as well and offer you lunch (if you have time).”
The foregoing is proof that the Plaintiffs encountered difficulty when they attempted to recover their mining licences. Anjay Mohnot’s letter indicates that the issue of waiver of any claim against the Defendants had been suggested earlier.
In their desperate position and in response to the Defendant’s conditions, the Plaintiffs had written a conditional waiver on 2nd October 2009 – Exhibit P. 16 that they would not lodge any claim against the Defendants if the mining licences were returned.
PW1 in his testimony stated that the waiver was a precondition but the licences were still not transferred by the Defendants. That they were not transferred by the Defendants is easily seen in several pieces of evidence. Exhibit P.17 was written by the Commissioner of Geological Survey Mr. Joshua T. Tuhumwire on 18th December 2009 to the Managing Director of Videocon Natural Resources PLC, Mr. Martin X Fernandes stating that he had turned down the application of the Plaintiff to transfer the licences from the 3rd Defendant back to the 1st Plaintiff because there was no resolution of Videocon Directors. He further stated that he had refused to renew the licence which was to expire on 22nd November 2009 because only the licence holder could apply for such renewal. He sought a confirmation from Videocon on whether a resolution had been reached to transfer.
To further prove that Videocon had refused to transfer the licences to the Plaintiff, Anjay Mohnot wrote on 29th December 2009 Exhibit P.15 making it clear that the transfer documents had not been signed, he claimed that a forgery had been detected and therefore there would be no transfer.
He wrote in part:
“…VIDEOCON group is currently investigating ‘some purportedly fraudulent documents with forged signatures’ submitted to the Commissioner’s office in Uganda. Until that investigation is complete and Videocon gets to the bottom, they will not release any transfer document to you.”
Exhibit P.19 dated 21st December 2009 and Exhibit P. 18 of the same date were email (P.18) and a letter (P.19) both confirming that there were no intentions of returning the mining licences. In P.18, Fernandes exhibiting shock wrote:
“We confirm that no resolution whatsoever has been signed by the Board of Directors of Videocon Natural Resources PLC towards transfer of mentioned exploration licences.”
In Exhibit P. 19, almost in similar terms, he wrote
“This is to confirm that there has been no resolution passed by the Board of Directors of Videocon Natural Resources PLC to transfer or repossess the above mentioned two exploration licences.”
From the foregoing, there is no doubt that the licences that had been transferred to Videocon for purposes of mining business were never transferred back to the Plaintiffs.
In the process, since only the licence holder could apply for their renewal, the Plaintiffs who had been denied access lost them and essentially the mines and whatever income they would have derived from them.
On whether the Defendants are liable, it is this Court’s finding that the Defendants approached the Plaintiffs for a joint venture in mineral extraction. A Memorandum of Understanding was entered into specifying each party’s obligations majorly that the Plaintiffs would transfer their two mineral mining licences to a company that was formed as a result of the Memorandum of Understanding and also transfer 99% of their shares to the new company. The Defendants’ obligation was to inject 100 million dollars into the project. While the Plaintiff fulfilled all its obligations, the Defendants failed in all their obligations resulting into the Plaintiffs losing their mining licences and expected income. The Defendants breached the terms of the Memorandum of Understanding causing loss to the Plaintiff and is therefore found liable for breach.
One of the prayers of the Plaintiffs was for damages. General damages are such as the law will presume to be the direct natural or probable consequence of the act complained of Stroms V Hutchinson  AC 515.
Damages have also been considered in Hadley V Baxendale [1843 – 60] ALL ER 46 which spelt two types of damages that are recoverable in a contract situation such as one in the instant case. The two types of damages recoverable, their Lordships found were; first, damages which would fairly and reasonably be considered to arise naturally from the breach and; secondly, damages which would reasonably be supposed to have been in the contemplation of the parties as likely to result from the breach at the time of the contract.
In a situation where the Plaintiff, out of no fault of his, is denied the use of his property, he cannot be without the remedy of an award of damages for he will surely have suffered inconvenience as a consequence of dispossession and the trouble of trying to recover it. Sirere Musoke Mbidde V Lubowa Trad & 4 Ors HCCS 446/2007.
In the instant case, the Defendants did not make any attempt to perform their part of the contract after the registration of the Videocon Natural Resources PLC in Uganda.
Nowhere in this contract is it shown that it was froth with immorality or tainted with fraud. From the correspondences between the parties, it is clear that the parties entered it not through mistake or accident. It was not contrary to public policy; on the contrary it was for the promotion of the economy. The Memorandum of Understanding Exhibit P.6 was clear and unambiguous whose terms were easily understood by all the parties. The costs for fulfilling their obligations was placed at 100 million dollars by the Defendants themselves. They were therefore ascertainable from the start.
Having depicted themselves as financially competent, the Defendants could have performed the contract if they so desired. This they did not do. The Defendants were infact the ones who benefited from the contract. This is so because the Defendants being registered on the stock exchanged, the acquisition of the licences from the Plaintiffs was a benefit to them as it depicted them as owners of mining licences of very precious, minerals to the international business world. It would therefore occasion injustice to the Plaintiff if denied the relief they seek because as their Lordships held in Perryhouse V Garland Coal & Mining Co. (1962) DK 267;
“To do so would be holding for naught the express provisions of the contract, would be taking from the Plaintiffs the benefit of the contract and placing those benefits in the Defendants which have failed to perform its obligations, would be granting benefits to the Defendants without a resulting obligation.”
In the instant case, tin was already being mined by the Plaintiffs at the time they entered into the contract. If the breach had not occurred, the Plaintiffs would have continued selling the tin and even retained the licences. The Plaintiffs could not renew them because the Defendants refused to release them. Such acts led to loss of income and damage to the Plaintiffs. The issue for consideration now is whether the Defendants foresaw the consequences of their action. If they did, then they are fully liable. Shell (UK) Ltd & Ors V Total (UK) Ltd  EWCA Civ 180
In the instant case, right from the beginning when the Defendants approached the Plaintiff for the joint venture, they knew that the Plaintiffs were mining tin. They also knew that the Plaintiffs’ intention was to extract Wolfram for sale. They knew the capacity of the two mines and even included them in the Memorandum of Understanding Exhibit P. 6. The purpose of extraction of these minerals was for sale and making profit, a fact well within the knowledge of the Defendants who were experienced in matters of business. The only conclusion therefore is that right from the start, the Defendants knew, it was clearly foreseeable that a breach of their obligations would lead to loss, and as held in Victoria Laundry Windsor Ltd V Newman Industries Ltd (1949) 1 ALL ER 997 damages for loss of profit were recoverable if it was apparent to the Defendants as reasonable persons that the delay in delivery was liable to lead to such loss by the Plaintiff.
In the instant case the Defendants knew that the licences had a time span and required renewal by the holders of the licences. They neither applied for renewal nor transferred the mining licences back to the Plaintiffs to enable them apply for renewal. The resultant loss was foreseeable by the Defendants and are found liable for losses incurred by the Plaintiffs.
In a situation such as this, the measure of damages for a Plaintiff is the market price which forms the basis of the calculation which the injured party would normally earn. Market price is measured as at the time of the breach. In this case when the Plaintiff realized that the Defendants had no intention of proceeding with the terms of the Memorandum of Understanding, the Defendants having known that the Plaintiffs were going to sell the minerals, they should reasonably be expected to have known the Plaintiffs exposure to loss if they (Defendants) did not do their part. In the absence of a contractual provision against consequential damages, the Defendants were liable for the Plaintiffs’ loss. In this case, loss meant monetary loss and the mining licences. Calculating loss is normally difficult, especially where the subject matter is not quantified and the market price is not known. The beauty in the instant case, is that the value of the minerals in quantity and price was known.
By the time the Plaintiffs and the Defendants entered into the Memorandum of Understanding, tin was being mined and sold by the Plaintiff at US$ 20,695 per tonne Exhibit P.25. The Memorandum of Understanding that the Plaintiff and the Defendant signed indicated that there were over three million tonnes of tin ore from the Mwerasandu Tin Mine. But not all of it was pure because each tonne had a purity of only 1%. 3 million tonnes would therefore only give 30,000 metric tonnes of pure tin ore. It is these that would be multiplied by the price of US$ 20,695 which would give the possible earnings. In this case therefore, US$ 20,695 x 30,000 metric tonnes would give US$ 620,850,000. This would then be subjected to 30% as expenses incurred resulting into US$ 186,255,000 as expenses of extraction, marketing, royalties and tax.
Thus expenses of US$ 186,255,000 deducted from US$ 620,850,000 would leave US$ 434,595,000 as possible earnings by the Plaintiffs from the Mwerasandu tin mine.
As for Wolfram, also referred to as tungsten, it is a metal capable of “withstanding the thermal chemical and mechanical environments in many of the more advanced solid – propellant rocket systems. Tungsten may be used in rocket components in a number of forms, but the leading form is pressed full-scale nozzles at 5500oF or higher where accomplished with inserts of this type.” Exhibit P.23.
It is therefore a metal of high value whose price as at 23rd February 2013 was US$ 50 per kilogram – see World Tungsten Report Exhibit P. 24. PW1 told court that in 2008, the price of Tungsten was about US$ 35,000 per tone which was US$ 35 per kilogram. He however added that prices go up and down depending on the usage. He gave the increased use of Tungsten as a reason for increase in price.
His evidence is believable because in 2013, as Exhibit P. 24 shows, the price had risen to US$ 50 per kilogram. Taking a middle position therefore, I would find that the price must have increased to US$ 40 per tone.
According to the Memorandum of Understanding, the Kirwa Wolfram Mine had a reserve of 6 million tonnes of Tungsten, which if subjected to a purity of 1% would give 60,000 metric tonnes of pure Tungsten. This converted to kilograms would amount to 60 million kilograms.
It is this 60 million kilogram that would be multiplied by the price of US$ 40 per kilogram which would give a possible earning of US$ 2,400,000,000-.
Subjecting this figure to 30% incurred expenses on extraction, marketing, royalties and tax would create US$ 720,000,000- as expenses. Thus expenses of US$ 720,000,000- deducted from US$ 2,400,000,000- would leave US$ 1,680,000,000 as possible earnings by the Plaintiffs from the Wolfram mine.
The expected income therefore of both mines would be to add the expected income from both tin and Tungsten which would be US$ 434,595,000- from tin and US$ 1,600,000,000- from Tungsten; the sum of which is US$ 2,114,595,000-.
This is however a sum of money that would be obtained through hard work and toiling possibly for several years with all the risks of failure, economic depression, cancellation of licences, fall of mineral prices and other obstacles that arise in the vicissitudes of this world.
Furthermore, the Plaintiffs had exhibited that they were incapable of doing it alone. PW1 himself told Court that to successfully mine, they would require external support. This external support would have meant surrendering a big portion of the shares of the Plaintiff to whatever investor who joined them.
Taking into account that Ore could not in the circumstances accurately read into the future, I find that 10% of this sum, that is, US$ 2,114,595,000- which was the aggregate income would be sufficient compensation. 10% of the US$ 2,114,595,000- amounts to US$ 211,459,500-.
The Plaintiffs also sought exemplary damages. Exemplary damages carry a punitive aim at both retribution and deterrence for the wrong doer and others who might be considering the same or similar conduct.
They are awarded either where there is oppressive, arbitrary or unconstitutional action by the servants of the Government or where the Defendant’s conduct was calculated to procure him some benefit, not necessarily financial, at the expense of the Plaintiff. Rookes V Bernard  AC 1129.
In the instant case, the Defendants stood to gain because their reputation on the stock exchange shot up as a company that owned mining licences of highly valuable minerals. Furthermore, the Defendants acted high handedly when the Plaintiffs travelled to India in search of their licences that had been retained. PW1 told Court that when they went to India to pursue their claim, his advocate Mr. Musumba and Hon. Mawanda who seemed to be with them just for company were all bundled up, arrested and confined. The Defendants instigated charges of extortion against the Plaintiffs. The Supreme Court of India however found the arrest unlawful and ordered their release.
Their Lordships in their ruling dated 19th June 2013 had this to say;
“… Notwithstanding the said guaranty under Article 21 of the Constitution, in this case, the Mumbai Police acted on the FIR of the complainants which we have found to be baseless.
For the aforementioned reasons, we quash the impugned FIR and we further direct that if the passport of any of the petitioners has been impounded on account of the impugned FIR which we have quashed, the same shall be released forthwith.
We accordingly allow the writ petition. “ Exhibit P. 21.
In my view, the behavior of the Defendants was high handed in as much as they knew that the Plaintiffs had not gone there to extort but to demand what rightly belonged to them. I therefore find this a fit and proper case where exemplary damages should be awarded.
Taking into account the status of the persons who were humiliated for no reason, and confined, an advocate, a businessman of international repute and an honourable Member of Parliament, I find exemplary damages of US$ 300,000- appropriate in the circumstances and it is so awarded as exemplary damages.
The Plaintiff prayed for interest. Court finding no reason to award interest beyond Court rate, it awards at 6% per annum on both general and exemplary damages from date of judgment till payment in full. The Plaintiff are also awarded costs of the suit.
In conclusion, judgment is entered in favour of the Plaintiff in the following terms;
- That the Defendants committed a breach of contract.
- That the Mining licences were not returned to the Plaintiff.
- The Defendants pay the Plaintiff general damages of US$ 211,459,500-.
- That the Defendant pay the Plaintiff exemplary damages of US$ 300,000-.
- Interest on (c) and (d) at 6% per annum from date of judgment till payment in full.
- Costs of the suit.
David K. Wangutusi