Court name
High Court of Uganda
Judgment date
12 June 1995

Oyester International Ltd v Air Guide Services Ltd (Civil Suit-1994/424) [1995] UGHC 35 (12 June 1995);

Cite this case
[1995] UGHC 35


CIVIL SUIT NO. 424 OF 1994 
OYESTER INTERNATIONAL LTD::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF
- versus -
AIR GUIDE SERVICES LTD::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: DEFENDANT


This is an application for directions brought under order 1 rule 18 of the Civil Procedure Rules by the defendant in HCCS. NO. 424 of 1994 following a third party notice issued under order 1 rule 21 on behalf of the defendant, Air Guide Services, Ltd upon one of its directors, named Taremwa Barnabas (hereinafter referred to as the respondent).
The facts disclosed in the affidavit of Ms. Edith Byanyina sworn on 4th May 1995 and the address to me of Mr. Bruce Kwarisiima, Counsel for the applicant, are that the respondent who was and still is a Director of the applicant Company Contracted work in the name of the Company but for is personal and private benefit. He committed or is alleged to have committed a breach of the Contract as a result of which HCCS. No. 424 of 1994 was instituted against the applicant Company by N/S. Oyster International Agencies, Ltd (hereinafter to be referred to as the plaintiff Company).
The applicant Company is seeking an order of indemnity against Barnabas Taremwa (to be referred to as the respondent) for whatever decretal award the Plaintiff Company may obtain against the defendant company. Under the suit the plaintiff company is seeking a sum of shs. 13,879,000/= plus interest at the bank rate from the date of the cause of action till payment in full, plus general damages and costs of the suit. The defendant/applicant company is seeking in this application to be indemnified by the respondent in respect of whatever relief the plaintiff may obtain against the defendant.
The argument of Mr. Tumusingize, Counsel for the respondent is that, for this application to succeed, the applicant must prove that there was a Contractual relationship between the applicant and the respondent, and that the cause of action in the application against the respondent must be the same as the cause of action by the plaintiff against the defendant. Counsel Tumusingize referred me to the case of LUTAAYA - vs - WAMBARALI [1972] ULR. 118. Indeed, in that case it was decided, interalia, that the applicant (defendant) had not clarified whether the claim for indemnity arose out of an express contract or implied contract; that neither had been proved and therefore, no order for indemnity would be made. From that decision, it cannot be conclusively said that a contract between an applicant/defendant and a respondent/third party is the only basis for indemnity.
I am fortified in this view by the words of the Privy Council in the case of EASTERN SHIPPING CO. - vs - QUASH BENG KEE [1924] A.C. 177 at page 182 that:-
“A right to indemnity generally arises from contract express or implied, but it is not
confined to cases of contract. A right to indemnity exists where the relation between the parties is such that either in law or in equity there is an obligation upon the one party to indemnify the other. There are, for instance cases in which the state of circumstances is such that the law attaches a legal or equitable duty to indemnify arising from an assumed promise by a person to do that which, under the circumstances, he ought to do. The right to indemnify need not arise from a contract; it may (to give other instances) arise by statute; it may arise upon the notion of a request made under circumstances from which the law implies that the common intention is that the party requested shall be indemnified by the party requesting him. It may arise (to use LORD