Court name
High Court of Uganda
Case number
Civil Suit 375 of 1993
Judgment date
25 February 1994

M/s Dembe Enterprises v M/s Transami (U) Ltd & Anor (Civil Suit 375 of 1993) [1994] UGHC 5 (25 February 1994);

Cite this case
[1994] UGHC 5


CIVIL SUIT NO. 375 OF 1993
2. M/S TRANSAMI (K) LTD :::::::::::::::::;:: DEFENDANTS
The Hon. Lady Justice M. Kireju

The plaintiff company brought this action against the two, defendant companies claiming general damages for breach of contract for transportation of goods which the plaintiff transported on behalf of the defendants. The cause of action is based on a verbal contract. The plaintiff claims the sum of United States dollars US 93,750 or its equivalent in Uganda or Kenya shillings on account of transporting 75 Containers of goods at the cost of US 1,250 each, it also claims general damages for breach of contract cost and interest or the principal sum from 1/3/1992 at 42% per.
The defendants filed a joint written statement of defence. The first defendant claims that it was wrongly sued, that it was the second defendant which was involved in these matters. Both defendants disputed the amount claimed by the plaintiff, and also pleaded that the amount should be in Kenya shillings if found due to the plaintiff and not US dollars. The first defendant stated that in annexture ‘C’ to the plaint the plaintiff each claimed only 12 containers at US $l250 each making a total of US $15,000 and not US $93,750 as claimed in the plaint. They prayed that the suit be struck out or be dismissed. At the haring of this case the plaintiff company was represented by learned counsel Mr. Byaruhanga of M/S Kasirye, Byaruhanga & Co. Advocates and the defendant companies were represented by learned counsel Mr. Kayondo S.C. of Kayondo and Co. Advocates.
The following issues were agreed upon at the hearing of the suit.
1. Whether there was a contract between the plaintiffs with either of the defendants.
2. If there was a contract what were the terms of the contract between the plaintiff and either defendant.
3 Whether there was a breach of the said contract.
4. Who is liable for the breach?
5. What is the quantum of damages and in what currency?
The plaintiff company’s evidence was led by PWl Karim Hirji, director of the said company. He testified that he knew the first defendant, Transami (U) Ltd, that when he was importing goods in the country, he was approached by the then general manager Walter Hoes who offered to import the plaintiff’s goods by using a shipping company of whom he was an agent. He would give the plaintiff company transportation from Mombasa to Kampala, for him he would enjoy shipping from overseas and clearing at Mombasa. WaIter Hoes told him to insist that his suppliers use Transami (U) Ltd. This arrangement was agreed upon and the suppliers were asked to use Transami (U). When the plaintiff company was opening letters of credit in Bank of Uganda it stated that goods should be cleared by Transami (U). After the above agreement Transami (U) Ltd subcontracted the plaintiff company to transport goods to Kampala as it did not have trucks. He said that the plaintiff transported 75 containers between 1990 and 1992 at an agreed price of US 1250 per container of 20 ft. The defendants had agreed to pay but the plaintiff could not accept the exchange rate of Shs. K26 to a dollar, because the Kenya shilling had fluctuated, the money could not even buy fuel. The defendants had promised to pay after the documents had been negotiated; the promise had been made by the General Manager in Kampala.
The letter offering to pay was exhibited as Exh. P.1, dated 21/8/92. He further testified that he got a call from Transami (K) asking for an account where the money should be deposited. The witness asked them to calculate payment using dollar rate and send the money to his account in Bank of Uganda. The amount was US 93,750. He said that the company has to account for all the money it makes for income tax purposes. It had to get border, fees which were in, foreign exchange and the only way this could be obtained was to show the bank that the company was doing gainful transport. He said that as a result of delayed payment the company had suffered. The Lorries are on hire purchase and installments have not been paid and it is also paying interest. If the company had been paid, it would have bought 2 Lorries two years ago but now it cannot even buy one lorry. He said that he would like the court to pay interest at the bank rate of 42% and general damages.
In cross examination he said that for him Transami (U) and Transami (K) are the same. He said that Transami never disputed that that the company transported their goods to Kampala that Exh.P.1 was written after this suit was filed. He said that he was ready to receive payment at Shs (K) 24 per dollar, he did not sue Transami (K) in Kenya because the agreement was made in Kampala, Ann ‘C’ to the plaint was made to Transami (U) Ltd. He said that 4 companies were used to transport namely Arrows Enterprises, Anisha Dembe Enterprises, and C. Kibirige Enterprises Dembe Enterprises was acting on behalf of these companies. The money was to be paid in the account of Dembe Enterprises, The defendants called one witness Fernando Marques, General Manager, Transami (u) Ltd. He said that they had another company Transami (K) based in Mombasa and Nairobi. He said transportation contracts are entered into between Transami(K) and subcontractors. The subcontract’ with’ Dembo Enterprises Was entered into with Transami (K)’ and not Transami (U) Ltd. Payments were always made in Kenya shillings by their Kenya office Referring to exh. P.1 he said that they wrote to Dembe Enterprises and offered to pay shs (K) 30,000 per container but this offer was turned down by the plaintiff. As far as Transami (K) is concerned it should have been sued in Kenya court. He added that Transami (K) was willing to pay the money. He said that the case against Transami (U) should be dismissed as he is a wrong
party to the suit. In cross—examination he said that he started working with Transami (U) Ltd. on 9/5/1992 and he was not part of this transaction. He did not know the terms of the contract between Transami (U) and the plaintiff. He got the information from the file in their office and evidence in court.

He said that he knew what was written but whet was agreed verbally he did not. A letter dated11/3/1992 from the plaintiff’s advocates to General Manager Transami (U) Ltd demanding payment was admitted in evidence as Exh. D.l. At the close of the defence case, both. Counsel addressed court on the issues framed I shall consider their submission as I consider the issues. The first issue is whether there was a Contract between the plaintiff with either of the defendants and the second Issue was what were the terms of the contract with either defendant. These 2 issues were handled together by counsel for the plaintiff; I shall also handle them together as they are interrelated.
Mr. Byaruhanga submitted that P.W. I testified that he had agreed with the Managing Director of Transami (U) that the plaintiff company would transport the containers at the same cost that was quoted. in the letter of credit as is shown in Exh. P.2 (Transit Entry Form C.4), the cost was Us $1250 per 20 ft container. He submitted that his rate was not contravarted by the defendants and it was not disputed in para 6 of the written statement of defence. Counsel submitted that the discrepancy between the claim in the plaint and that one in Ex1. D.l was a typographical error which was corrected during the hearing of the case by actually counting the containers transported by the plaintiff. Counsel submitted that there was a contract between the plaintiff and the defendants and the terms were that the plaintiff be paid US S I25 per container. Mr. Kayondo submitted that the suit was wrongly brought against Transami (U) Ltd as according to Exh. D.l, it was Transami (K) which contracted with the plaintiff Counsel submitted that the plaintiff has no cause of action against Transami (U) Ltd and the case should be dismissed. Counsel further submitted that the action against Transami (K) should have been filed in Kenya as that where the contract was entered into, he contended that this court has no jurisdiction to hear this case. Counsel submitted that the terms of the contract were not clear, that Transami (K) Ltd wanted to pay the plaintiff in Kenya shillings but the plaintiff rejected this offer and asked for US dollars.
The evidence of PW 1 is that he was approached by Walter hoe who was General Manager of Transami (U), he was asked to use the defendants company to import goods. Transami (U)would enjoy the shipping from overseas and clearing at Mombasa and the plaintiff company would transport the goods from Mombasa to Kampala. He said that Transami (U) Ltd subcontracted the plaintiff company as they did not have trucks at the time. The terms were US $1250 per container from Mombasa to Kampala.
The current General Manager of Transami (U) Ltd testified that there was no contract between his company and the plaintiff company that the contract was between Transmi (K) and the plaintiff. This witness added that he joined the company after the transaction in issue had taken place. From the evidence of P.W.l which was not seriously challenged by the defendants it is clear that there was an agreement between Transami (U) and the plaintiff company where the plaintiff company was hired to transport some goods from Mombasa to Kampala. I am of the view that it is correct for the plaintiff company to insist that it actually entered into contract with Transami (U) ltd D.W.I show that the defendant companies work together, because and not Transami (K) Ltd. The evidence of D1W.1 gave evidence on behalf of Transami (K) Ltd., when be said that Transami (K) Ltd was willing to pay the plaintiff. He added that contracts with transporters outside their company were entered into with their Mombasa and Nairobi offices I.e. Transami (K). From his evidence the defendants appear to work together, but this fact was not known to the plaintiff, it assumed that it was contracting with Transami (U) Ltd arid not Transami (K) Ltd although it was Transami (K) which offered to pay. The plaintiff company was not expected to know the internal arrangement between the defendants and was right to insist on Transami (U) as the contracting party. I have therefore found that there was an oral contract between Transami (U) Ltd and the plaintiff. The defendants insist that there was an agreement between Transami (K) and the plaintiff, basing on Exh. P.1 where it offered to pay the plaintiff. However, they say the action should have been instituted in Kenya as the contract was concluded there. I have already found that the contract was concluded in Uganda between Transami (U) Ltd. Exh. P.1 cannot be taken seriously because it was written after this suit had long been filed.
However I have had the opportunity to look, at S. 15(3) of Civil Procedure
Act which is as follows

in suits arising out of the contract, the cause
of action arises within the meaning of this section at any of the following places —,
the place where the contract was made.
The place where the contract was to be
performed or the performance thereof
(iii) the place where in performance of the contract any money to which the suit related was expressly
impliedly payable.”
The evidence on record does not show that the contract was entered into in he absence of such evidence the contract could have been concluded in Uganda or Kenya. Even if 3 above did not apply, Iam of the opinion that 3 (ii) has the answer. In this case the plaintiff was to transport goods from Mombasa in Kenya to Kampala in Uganda. The performance was therefore in both countries or better still the contract was to be the completed n Uganda. The LCS were also opened in bank of Uganda.
For the above reasons, I find that the plaintiff was free to bring action against the 2nd defendant either in Kenya or Uganda, the suit against the 2nd defendant is properly before this court. I have found that there was a contract between the plaintiff company, entered into orally between PW.l and the General Manager of Transami (u) Ltd Walter Hoes. There was an arrangement between the 1st and the 2nd defendants known to the plaintiff whereby the 2nd defendant offered to pay the plaintiff. The terms of contract as can be gathered from the oral contract testified to by PW.l was that the defendants were to pay US $1,250 per container, this rate was not disputed by the defendants except that in Exh, P.1 they offered to pay at the rate of Kenya shs 30,000 per container no evidence was called to show how this rate Was arrived at. in the absence of any other evidence to controvert PW.l’s evidence I believe his evidence that the rate per container was US. 1250. I also believe PW..l when he says that the company should have been paid 3 months after the goods were supplied from India.
The next issue is whether there was a breach of the said contract.
I have found that there was a contract between the parties, whereby the p1antiff transported goods for the defendants, but the defendants failed to pay. The plaintiff company demanded payment as per