Court name
High Court of Uganda
Judgment date
17 October 1996

Equatorial Agencies Ltd & Anor v Attorney General (Civil Suit-1994/743) [1996] UGHC 2 (17 October 1996);

Cite this case
[1996] UGHC 2
Short summary:

Civil Procedure, Contract Law, Privity of Contract



THAMES MERCANTILE SERVICES:::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFFS

ATTORNEY GENERAL :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: DEFENDANT


This is an application by notice of motion brought under Orders 3(1), and 48(1) and (3) of the Civil Procedure Rules, and Sections 6 and 101 of the Civil Procedure Act. It was filed by Katureebe, Twinomukunzi & Co. Advocates on behalf of M/S. Equatorial Agencies Ltd. (herein to be referred to as the applicant), against the Attorney General of Uganda and M/S. Thames Mercantile Services, Ltd (herein to be referred to, respectively, as the first and second respondents).

The application seeks orders that:-

1.       High Court Civil suit No. 743/94 is time-barred by virtue of the Limitation Act, Cap.70 of the Laws of Uganda.

2.       The consent judgment entered into in that suit between the two respondents is a nullity and should be set aside.
3.       The Decree signed consequent upon the consent judgment is also a nullity and should be set aside.

4.       Therefore HCCS.No.743/94 should be struck out with costs.

5.       In the alternative, but without prejudice to the foregoing, HCCS. No.743/94 should be stayed pending the disposal of HCCS. No. 47/89 which is the earlier suit in terms of S.6 of the Civil Procedure Act.

6.       A consent judgment be entered in HCCS. No. 47 of 1989 instead in the same terms and a decree extracted and signed accordingly.

7.       Costs of this application be provided for.

In prayer 6, the application, I understand, to be saying that the consent judgment be entered in HCCS. No.47 of 1989 which is between the applicant and the first respondent.

To understand these prayers, it is necessary to set forth the facts of the case. On 12.3.86 the applicant entered into a shipping agreement with the first respondent (per the Government of Uganda) whereby the applicants were to ship to Kampala from Bombay 20 drilling rigs for payment of the sum of US $ 1,826,200.00 payable to the applicant or to its principals upon presentation of the relevant documents stipulated in Clause 3 of the Agreement. The second respondent duly shipped the rigs in accordance with the terms of the agreement and the Government of Uganda, through its Ministry of Minerals & Water Development, acknowledged satisfaction with the contract’s performance. It signed for the receipt but only paid one invoice of US $ 219,300.00 instead of the total contract sum of US $ 1,826,200.00 as aforementioned. On 20.1.89, the applicant filed an action in this Court to recover the balance of the debt in the sum of US $ 1,260,598.00 (which should be a sum of US $ 1,127,993 according to the ‘three unpaid invoices). HCCS. No. 47/89 was being conducted by M/S. Ariko & Co. Advocates. Because Mr. Stephen Omoding Ariko, the sole partner of the firm died, the conduct of the suit stalled and has never been concluded to date.

According to one Charania Noordin Muhamed who deponed on an affidavit that he is a Director and shareholder, as well as Mr. Atul Sumant Patel who also deponed that he is a Director of the second Respondent Company, when HCCS. No.47 of 1989 stalled, they decided to institute HCCS. No. 743 of 1994 through M/S. Mwesigwa, Rukutana & Co. Advocates who joined as a Co-plaintiff the second respondent suing the first respondent. In consequence therewith the second respondent and first respondent came to an out of court settlement and on 11.5.95. A consent judgment was signed by this Court and a Decree was accordingly extracted.

Now the present application is attacking HCCS. No. 743 of 1994 and the consent judgment and Decree arrived at, on the grounds that:-
(a)      HCCS. No. 743/94 was not supposed to be heard during the pendency of HCCS. No. 47/89 and that the disposal of the former was null and void by virtue of S.6 of the C.P.A. which provides that no Court shall try a subsequent suit during the pendency of an earlier suit if the two suits are similar in the sense that the subject matter is the same and that the parties to either suit are the same or are suing in the names of the same persons. Hence all the above prayers that are being sought.

On 29.9.95 while ruling on an interlocutory application I framed the following issues to be argued by counsel on both sides, at the resumption of the hearing of this application:
(a).     that proof should be made of principal/agent relationship between the second respondent and the applicant.

(b).     evidence to be adduced why after contracting with the applicant, the first respondent employed the second respondent which it has now agreed to pay the contract money ignoring the applicant.

(c).     to decide, in light of the provisions of S. 6 of the C.P.A. whether the consent judgment and decree of 11.5.95 were a nullity.

(d).     to decide whether or not HCCS. No. 743 of 1994 was barred by the provisions of the Limitation Act, Cap.70 of the Laws of Uganda.

(e).     the parties to be free to frame any and/or further issues for determination.

I gave an order that until the hearing and final determination of this application the first respondent should withhold disbursement of the decretal amount under the consent judgment.

I will start with issue number (d) whether or not HCCS. No. 743/94 is barred by the Limitation Act. The sum of US $ 1,127,993 being a debt the two suits were for the recovery of a debt and a suit for the recovery of a debt is not subject to the provisions of the Limitation Act. Straight away therefore I would answer issue number (d) in the negative. I will then treat issues numbers (a) and (b) together. After much probing of the documents filed on both sides, in particular on the sides of the applicant and the 2nd respondent, I have come to the conclusion that the applicant contracted with the first respondent as an agent of the second respondent and that therefore, in fact, the second respondent was a disclosed principal of the applicant, and the first respondent understood the shipment agreement as involving the applicant as the agent of the second respondent.

There is a lot of evidence to show that a principal/agent, relationship between the second respondent and the applicant existed. In the first place the 12.3.89 shipping agreement stipulates that the first respondent would pay to the applicant or its principals. Later on, in the affidavit of Mr. H.L. Chohan who deponed that he is a Deputy Government Cost Agent at Mombasa, Kenya, it is deponed that he was verbally instructed by S.M. Charania “who is personally known to me on behalf of M/S. Transroad to clear various containers of, among others, drilling rigs.” “That our office carried out the clearing after which we handed the goods to M/S. Transroad in Mornbasa.”

“That M/S. Transroad passed on the original Bills of lading for the containers and vehicles to our office upon which we prepared the Mombasa Port Release orders (MPRO) documents.” “That after carrying out their instructions we invoiced M/S. Transroad who fully paid for the services.”

Mr. Charania, in his affidavit of 25.9.95, depones, in paragraph 6 that;
“That pursuant to the agreement (of 12.3.86) the first respondent Company (i.e. the second respondent in this application) exclusively and without any
participation by the applicant Company took over the contractual obligations, financed and handled the transportation, insurance clearance, forwarding and delivery of the goods to the Government of Uganda. The clearing was done by M/S. Coastal clearing Agency, Ltd. on the instructions of my own Company MIS. Transroad, while the forwarding and delivery done by my said Company itself”. Whereas Chohan and Charania prove that it was the second respondent which handled the shipment under the agreement with the Government concluded with the applicant, Charania goes on in his affidavit to explain why the second respondent decided to perform the obligations instead of the applicant, which had contracted with the agreement.

In this regard I reproduce paragraphs in