5 THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

CIVIL SUIT No. 112 OF 2019

10 DICKSON MUYAMBI ......................................................................... PLAINTIFF

VERSUS

VIVO ENERGY (U) LIMITED ..................................................................... DEFENDANT

15 BEFORE: HON. LADY JUSTICE SUSAN ABINYO

JUDGMENT

Introduction

The Plaintiff brought this suit against the Defendant, a Limited Liability Company
duly incorporated under the Laws of Uganda, seeking the following reliefs; a
20 declaration for breach of contract, a declaration that the termination of the
Retail Business Agreement was against fair dealings and was not done in good
faith, special and general damages, interest and costs of the suit.

Facts

The facts agreed upon during the scheduling proceedings are that:

25 a) On the 5th day of September, 2016, the Plaintiff entered into a Retail Business
Agreement with the Defendant to run the Defendant’s site of Shell Entebbe
at Entebbe.
b) The said retail agreement was to run for a period of three years.
c) At the start of the business, the Plaintiff was required to, and he injected
30 UGX 300.000.000(Three Hundred Million Shillings only) before the agreement
was signed.
d) On 6th February, 2019, the Plaintiff received a notice of termination from the
Defendant, wherein he was notified that the termination would take effect
on 7th March, 2019.

1
 5 e) The Defendant stated in the said termination notice that under clause 16.15
of the Retail Business Agreement, either party had the right to terminate the
agreement by giving the other party written notice of thirty days, and with
no obligation to assign any reason whatsoever for termination.
f) The Defendant demanded that the Plaintiff removes all the merchandise
10 from the select shop, and that the Plaintiff handed over the station that
same day on 14th June, 2019.

The Plaintiff’s brief facts giving rise to the cause of action against the Defendant
are that the Plaintiff lost all perishable products in the shop, and failed to recover
a large portion of the costs of the unperishable goods. That the Defendant did
15 not conduct a reconciliation of the assets and liabilities of the Plaintiff’s business
upon exit, and never paid the Plaintiff what was due to him.

The Defendant denied the allegations made by the Plaintiff, and contended that
the Retail Business Agreement allowed either party to terminate the Agreement.
That under clause 16.5 of the Agreement, the Defendant had the contractual
20 right to terminate the Agreement without reason provided there is written notice.

Representation

The Plaintiff was represented by Counsel Dhatemwa Sophie of Nexus Solicitors

and Advocates while the Defendant was represented by Counsel Waniala Allan
of M/S Sebalu & Lule Advocates. Counsel for the parties herein filed submissions
25 as directed by this Court.

Issues for determination

During the scheduling proceedings, the following issues were agreed upon for
Court’s determination;

1. Whether the suit is proper before this Court?

30 2. Whether the rejoinder is proper before Court?
3. Whether the Retail Business Agreement, and or clause 16.15 of the Retail
Agreement was unconscionable against the Plaintiff?
4. Whether the Defendant’s action of terminating the Retail Business
Agreement amounted to breach of contract?
35 5. Whether the termination of the Retail Business Agreement was against fair
dealings and was not done in good faith?
6. What remedies are available to the parties?

2
 5 The sixth issue was amended by Court to read as above, in accordance with
Order 15 Rule 5(1) of the Civil Procedure Rules SI 71-1.

Evidence

Counsel for the parties herein, complied with the Court’s directive to file witness
statements, which was adopted on record as the evidence in chief of the
10 witnesses for the respective parties; the said evidence will be evaluated
hereunder.

Resolution of issues

Counsel for the Defendant opted to argue issues No.1, 3, and 4 together,
however, it is worth noting that issues No.1, and 2 were raised by Counsel for the
15 Defendant as preliminary objections during the scheduling proceedings, and this
Court preferred to handle the preliminary objections at this stage.

The above approach by Counsel for the Defendant in respect of issues No.1, 3,
and 4 on the propriety of the suit, breach of contract, and unconscionability of
the Agreement will not be comprehensible, considering the fact that issues No.1,
20 and 2 have not been clearly articulated by Counsel for the Defendant in their
written submissions.

In the given circumstances, this Court will consider the merits of issues No. 3, 5, 4,
and 6 separately in that order, and issues No. 1, and 2, to have been abandoned
by Counsel for the Defendant. The said preliminary objections are accordingly
25 dismissed.

Issue No. 3: Whether the Retail Business Agreement, and or clause 16.15 of the
Retail Agreement was unconscionable against the Plaintiff?

For avoidance of doubt, clause 16 of the Retail Agreement generally provides for
breach, and termination. In particular, clause 16.15 of the Retail Agreement
30 (hereinafter referred to as “PE1”) in regard to termination provides that:

“Vivo may terminate this Agreement in its entirety on at least 30 days’ prior written
notice in Vivo’s absolute discretion, and without being required to give any
reason whatsoever, at any time. The termination of this Agreement under this
clause shall be without prejudice to any rights or remedies either party may have
35 against the other for any antecedent breach of this Agreement.”

3
 5 It was submitted for the Plaintiff that while the general rule is that the Courts will
not interfere with commercial contracts signed by the parties out of respect for
freedom of contract, the Courts in applying principles of equity will interfere with
harsh, and unconscionable contracts. Counsel cited the case of Charles
Athembu Vs Commercial Microfinance Limited and Anor, HCMA No. 0001 of 2014
10 in support of their submissions.

In reply, Counsel for the Defendant submitted that the Plaintiff did not plead
unconscionability of the contract in its amended plaint or plead any facts in
support of the claim of unconscionability in the plaint as well. That the Plaintiff only
introduced this new claim, and facts in paragraphs 5-9 of the reply to the
15 amended Defence at the time that the Defendant had no right to reply in law.

Counsel further submitted that Order 6 Rule 7 of the Civil Procedure Rules, bars
any party from pleading a new ground or fact that is inconsistent with the previous
pleadings of that party, and that a subsequent pleading that is inconsistent with
the prior pleading is a departure under the rules. Counsel relied on the case of
20 Interfreight Forwarders (U) Ltd Vs East African Development Bank, SCCA No. 33 of
1992, in support of his submissions, on the proposition of the law that pleadings
help to define, and deliver with clarity the real matters in controversy, and that a
party cannot benefit from a case not set up by it.

Decision

25 Order 6 Rule 7 of the Civil Procedure Rules SI 71-1 provides that:

“No pleading shall, not being a petition or application, except by way of

amendment, raise any new ground of claim or contain any allegation of fact
inconsistent with the previous pleadings of the party pleading that pleading. “

I have looked at the amended plaint filed by the Plaintiff on 23rd June, 2020, and
30 agree with the submission of Counsel for the Defendant that the Plaintiff did not
either plead unconscionability of the contract in its amended plaint or plead any
facts in support of the claim of unconscionability in the plaint.

It’s trite law that a party is expected and is bound to prove the case as alleged
by him and as covered in the issues framed. He will not be allowed to succeed
35 on case not set up by him and be allowed at the trial to change his case or set
up a case inconsistent with what he alleged in his pleadings except by way of
amendment of the pleadings. (See Interfreight Forwarders (U) Ltd Vs East African
Development Bank, SCCA No. 33 of 1992)

4
 5 Accordingly, this Court finds that failure by the Plaintiff to plead unconscionability
of the contract in its amended plaint or plead any facts in support of the claim of
unconscionability in the plaint, is a departure from the pleadings by the Plaintiff,
which contravenes the rules of procedure.

The well-established principle is that issues are framed and or arise, when one
10 party asserts material propositions of law or fact, and the other party denies. (See
Order 15 Rule 1 of the Civil Procedure Rules SI 71-1, and the case of Interfreight
Forwarders (U) Ltd Vs East African Development Bank(supra)

The facts contained in paragraphs 5-9 of the reply to the amended Defence,
which were not pleaded in the amended plaint but are material to the claim of
15 unconscionability, offends the right of the Defendant to reply to the new facts
introduced by the Plaintiff therein.

In the instant case, the Defendant would have responded to them in its written
statement of defence, had they been raised in the amended plaint.

For reasons above, this Court finds that this issue is redundant; the reply to the
20 amended defence, and any evidence that relates to the issue of
unconscionability is therefore expunged.

Issue No.5: Whether the termination of the Retail Business Agreement was against
fair dealings and was not done in good faith?

Counsel for the Plaintiff submitted that good faith and fair dealings are not only
25 implied but were expressly incorporated in the Retail Business Agreement
governing the parties.

Counsel contended that the Defendant’s termination of the Agreement was not
only a breach of Schedule 9 of the Agreement but was also done in bad faith
and against fair dealings, as the real reason for terminating the Agreement was
30 that the Defendant found another retailer, and that the Defendant used clause
16.15 as a legal cover up; that the Defendant rejected the Plaintiff’s plea to be
given time for a proper handover, refused to conduct a reconciliation of the
Plaintiff’s business, wilfully refused to pay the Plaintiff what was due to him upon
termination, inconsiderate and humiliating eviction of the Plaintiff from the station,
35 and loss occasioned to the Plaintiff that could have been avoided.

5
 5 Counsel relied on the case of John Sekaziga & Anor Vs Church Commissioners
Holding Co. Ltd, HCMC No. 15 of 2013, on the proposition that in a contract, there
is an implied covenant on a party exercising its right to terminate under the
termination for convenience clause to do so in good faith and in accordance
with fair dealings.

10 In reply, Counsel for the Defendant submitted that the decision of John Sekaziga
& Anor Vs Church Commissioners Holding Co. Ltd, cited by Counsel for the Plaintiff
is distinguishable. In that case, the Learned Judge relied on the American case of
Questar Builders Inc Vs CB Flooring LLC, for the proposition that there is an implied
term of good faith in contracts with convenience clauses (as they are called in
15 the USA)

Counsel argued that in John Sekaziga’s case, the Court did not take into account
that the implied term of good faith in convenience clauses is statutory, and that
there is no statutory requirement either in Uganda or Commonwealth countries
where good faith, and fair dealing are implied into termination clauses as was the
20 case in Questar’s case.

Counsel contended that in Anson’s law of contract, 27th edition at pg. 143, the
author opines that in the absence of statutory provisions, the cases in which the
Courts will imply a term into a contract are strictly limited, for they rightly conceive
that it is not their task to make contracts for the parties concerned but only to
25 interpret contracts already made.

Counsel argued further that by virtue of section 14(2)(b) of the Judicature Act,
which provides for exercise of judicial function in accordance with common law,
this Court is bound to follow the English decisions, that are common law positions
as opposed to American jurisprudence set out in the Questar case. Counsel relied
30 on the decision of the Court of Appeal of England and Wales in Msc
Mediterranean Shipping Company S.A Vs Cottonex Anstalt [2016] EWCA Civ 789,
on the principle that the Courts are unwilling to imply terms into a contract where
express terms exist; and the decision of the Supreme Court of England in Marks
and Spencer Plc Vs BNP Paribas Securities Services Trust Company Ltd & Anor[
35 2015] UKSC 72, where the Court stated that a term will not be implied if it satisfies
the test of business efficacy or if without the term, the contract would lack
commercial or practical coherence, to support his submission.

6
 5 In the instant case, the Plaintiff’s evidence was that at the time he met with the
Defendant’s officials, he was just looking for business opportunities. That he had
no experience in petroleum business but had a training in petroleum business
namely; venturing, exporting etcetera, and that he sought advice as a prudent
businessman.

10 That when he met with the Defendant’s Managing Director, and the team on 23rd
August, 2016, he was briefed about the history of Entebbe station, and told that
the Defendant was looking for a partner and not just a dealer.

That he was assured that the business relationship with the Defendant Company
would be mutually beneficial to the Defendant, and himself as long as he worked
15 hard, met the targets, and run the station well. That he was given an offer
letter(PE16) and a recommendation letter by the Defendant to obtain an
overdraft facility from the Bank. That he made payment of Ugx
300,000,000(Uganda Shillings Three Hundred Million only) to the Defendant on 29th
August, 2016, and was given a target and offer letter(PE4). That on 26th
20 September, 2016, the Defendant’s employees brought to him a Retail Business
Agreement (PE1) to sign, which he signed.

That he then took over the Shell Entebbe station, which he found had run down,
and required a lot of repair, and facelift. That the Defendant undertook some of
the repairs, but he met the significant cost of the repairs and facelift. That upon
25 running the station, he discovered that the nature of the business relationship he
expected from the Defendant was contrary to what the Managing Director and
the team had made him to believe.

That the Defendant would regularly send customers to the station for fuel on
credit, and yet the Defendant expected him to purchase its products with cash
30 of about Ugx 300,000,000 on a weekly basis. That he requested for a meeting with
the Defendant’s Retail Manager, and Territory Manager, and when they met, he
was informed that he actually needed Ugx 500,000,000 per week to run the
station.

That despite the challenges he encountered while running the station, he

35 endeavoured to meet his obligations under the Retail Business Agreement, and
the set targets by the Defendant’s employees. That in recognition of his
performance, he was given several awards, copies of some of the awards are
marked PE2 and PE3.

7
 5 That on 6th February, 2019, out of the blue, he received a letter referenced
“Termination of Retail Business Agreement at Shell Entebbe” from the Defendant’s
Retail Manager, giving him formal notice of the Defendant’s intention to
terminate the Agreement (PE 10), on 8th March, 2019 under clause 16.15 of the
Agreement. The letter stated that under clause 16.15 of the Agreement, either
10 party had the right to terminate the Agreement by giving the other party written
notice of thirty days, and with no obligation to assign any reason whatsoever for
the termination, and that the thirty days’ notice period commenced on 7th
February, 2019.

That he was shocked by the termination letter because on the 31st day of January,
15 2019, there was a site tools handover process with the new Territory Manager,
which went well, and he was praised for doing a good job. That he pleaded with
the Defendant’s employees to allow him to run the station, and at the very least
recover the sum of Ugx 200,000,000, which he had incurred as a debt from the
customers pushed to the station by the Defendant for fuel on credit but the
20 Defendant’s position remained the same.

That on 14th June, 2019, he received an email (PE20), from the area Manager
asking him to handover the station at 3:00pm. He was overwhelmed with what
was going on but at the same time, was told to sign on a blank closure report
given by the Defendant’s team, which he signed in a traumatic handover that
25 very day. That he was not treated well by the Defendant as a partner, and he
suffered a lot of humiliation.

The Defendant on the other hand averred that on 2nd September, 2016, the
Plaintiff entered into a Retail Business Agreement (PE1), with the Defendant to
operate the Defendant’s retail business at shell Entebbe in Kitoro for 3 years. That
30 under the Defendant’s business model, dealers like the Plaintiff are required to
invest working capital on their account held with the Defendant for the purchase
of fuel products supplied by the Defendant. That during the course of trading, the
working capital is drawn down(debited) on account of supply orders delivered to
the dealer, and the working capital fluctuates depending on how the dealer
35 utilises it.

That when the business relationship between the dealer and the Defendant
comes to an end through either expiry of the contract or termination, a
reconciliation process is undertaken to establish whether there is any credit and
or liability standing in credit to either party. If there is such credit, money is paid
40 out to the creditor after reconciliation.

8
 5 That the Plaintiff’s credit and or capital of Ugx 300,000,000 run down, and he never
reinvested in his dealership. That the Retail Business Agreement has a termination
clause, which allows either party to terminate the Agreement without reason
provided there is at least 30 days’ written notice. That the Defendant exercised its
right to terminate the Agreement when it wrote a letter to the Plaintiff, and served
10 it on the Plaintiff on 6th February, 2019. The termination letter stated that the
termination would take effect on 7th March, 2019.

That the termination letter was sufficient for the Plaintiff or indeed any dealer to
make reconciliation of any credit, including any stock of goods that is due to him
or her if at all. That the Defendant did not refuse the Plaintiff to remove any of his
15 merchandise, and that the Plaintiff made no effort to collect his merchandise or
undertake the reconciliation exercise during the notice period. That it was after
the ruling by the Court, which dismissed the application for an order of an
injunction sought by the Plaintiff, that the Defendant proceeded to evict the
Plaintiff from the premises.

20 Decision

Following the Court of Appeal decision in MTN Uganda Ltd Vs GQ Saatchi & Anor
Civil Appeal No. 0098 of 2017, where Justice Elizabeth Musoke .JA(as she then
was) stated that it’s a well-established principle in common law with regard to
contractual implications that there are two types of contractual implied terms
25 namely; the first, a term which is implied into a particular contract, in light of the
express terms, commercial common sense, and the facts known to both parties
at the time the contract was made. The second implied term arises because,
unless a term is expressly excluded, the law (sometimes by statute, sometimes by
common law) effectively imposes certain terms into certain classes of relationship.
30 (See the decision of the Supreme Court of England in Marks and Spencer Plc Vs
BNP Paribas Securities Services Trust Company(Jersey) Ltd & Anor [ 2015] UKSC 72,
in which Lord Neuberger cited with approval the observations of Lady Hale in the
case of Geys Vs Societe Generale [2013] 1AC 523 at para 55, on the two types of
contractual implied terms discussed above in the MTN case.

35 The settled position of the law is that for a term to be implied, the following
conditions (which may overlap) must be satisfied:

1. It must be reasonable and equitable;

2. It must be necessary to give business efficacy to the contract, so that no
term is implied if the contract is effective without it;
40 3. It must be so obvious that ‘it goes without saying’;
9
 5 4. It must be capable of clear expression, and
5. It must not contradict any express term of the contract. (See BP Refinery
(Westernport) Pty Ltd Vs President, Councillors and Ratepayers of the Shire
of Hastings (1977) 52 ALJR 20, 26 per Lord Simon, cited with approval in the
MTN case above.

10 It is noteworthy that the term “good faith” imposes an obligation on parties to act
in good faith, and deal honestly in a given trade or business, while “fair dealing”
involves the conduct of business with full disclosure. (See Black’s Law Dictionary,
9th Edition, 2009)

The Courts have adopted a more restrictive approach in the interpretation of the
15 terms “good faith”, and “fair dealing” in the performance, and enforcement of
contracts. (See Chitty on Contracts: General Principles, 31st Edition (2012),1136 at
para 15-049)

I am in agreement with the submission of Counsel for the Defendant that the
decision of John Sekaziga & Anor Vs Church Commissioners Holding Co. Ltd, cited
20 by Counsel for the Plaintiff is distinguishable. In that case, the Learned Judge
relied on the American case of Questar Builders Inc Vs CB Flooring LLC, for the
proposition that there is an implied term of good faith in contracts with
convenience clauses (as they are called in the USA), and with respect, the Court
did not take into account that the implied term of good faith in convenience
25 clauses is statutory in USA, which is not the case in either Uganda or
Commonwealth countries.

The proposition of the law is that, whoever alleges a given fact, and desires the
Court to give judgment on any legal right or liability dependent on the existence
of any fact, has the burden to prove that fact unless, it is provided by law that the
30 proof of that fact shall lie on another person. (See sections 101 and 103 of the
Evidence Act, Cap 6, and the case of Jovelyn Barugahare Vs Attorney General
SC Civil Appeal No. 28 of 1993[1994] KALR 190)

In the instant case, it was the Plaintiff’s evidence that he made payment of Ugx
300,000,000(Uganda Shillings Three Hundred Million only) to the Defendant on 29th
35 August, 2016, and was given a target and offer letter(PE4). That on 26th
September, 2016, the Defendant’s employees brought to him a Retail Business
Agreement (PE1) to sign, which he signed.

10
 5 I have looked at Clause 16.11 of the Agreement and find that the Plaintiff had a
right to terminate the Agreement provided at least two months’ prior written
notice is given to the Defendant, and clause 16.15 of the Agreement provides for
the Defendant’s right to terminate the Agreement in its entirety provided at least
30 days’ prior written notice is given to the Plaintiff.

10 This Court further finds that the Plaintiff entered into this agreement in September,
2016, and the Defendant indicated that the Plaintiff’s credit and or capital of Ugx
300,000,000 run down, and he never reinvested in his dealership, this evidence
was not rebutted by the Plaintiff.

In addition, the termination of the Agreement was effective 8th March, 2019, from
15 6th February, 2019, when notice was served upon the Plaintiff, which was after the
lapse of a period of two years, and 7 months, notwithstanding the awards by the
Defendant on the Plaintiff’s good performance.

I have taken into account the business relationship discussed above between the
Defendant and the Plaintiff, and find that the Plaintiff failed to adduce evidence
20 to prove that the Defendant acted with dishonesty or improper motive designed
to destroy or injure the Plaintiff’s right to receive the benefits or reasonable
expectations of the Agreement.

For the foregoing reasons, this issue is answered in the negative.

Issue No.4: Whether the Defendant’s action of terminating the Retail Business
25 Agreement amounted to breach of contract?

Counsel for the Plaintiff submitted that it is not in contention that the Defendant
did not terminate the Agreement because of breach or non-performance on the
part of the Plaintiff.

Counsel argued that after 8th March, 2019, the Defendant’s notice ceased to be
30 valid, and that when the Defendant evicted the Plaintiff on 14th June, 2019, there
was no valid 30 days’ notice of termination or due notice of a future date of
termination therefore, the Defendant’s termination of the Agreement in the
absence of a valid notice was in breach of the Defendant’s obligations under
clause 16.15, and the Defendant’s eviction of the Plaintiff was in breach of the
35 contract, in particular clause 2.3 on reconciliation at termination, and clause 16.6,
which gives the options on how goods in the select shop should be treated upon
termination of the Agreement; that forcing the retailer to remove the said goods
is not one of the options, and was in breach of clauses 16.6.1, and 16.6.2 of the
Agreement.

11
 5 Counsel relied on the Court of Appeal decision in MTN Uganda Ltd Vs GQ Saatchi
& Anor, Civil Appeal No. 0098 of 2017, which defined the term notice as a legal
notification of a fact, necessitated by virtue of the agreement of the parties or by
operation of law, to support her submission.

In reply, Counsel for the Defendant submitted that it is not in dispute that a notice
10 of termination of the Agreement dated 6th February, 2019 was served on the
Plaintiff in accordance with clause 16.15 of the Agreement.

Counsel argued that by law, Courts should not interfere with a party’s exercise of
its contractual right, and that the Courts are mandated to enforce the sanctity of
contracts, which require that parties comply with their agreement; a principle
15 known by the Latin maxim pacta sunt servanda.

Counsel contended that the Courts can only imply terms into a contract if it is
satisfied that such a term is; part of the usage or custom, can be deduced from
the parties’ previous course of dealing, can be deduced from the intention of the
parties, where such term is a necessary part of a particular type of contract and
20 lastly, where such terms are implied by statute.

Counsel argued further that it was agreed between the parties that no reason
needed to be given for the termination, provided a one month’s written notice
was served on the Plaintiff, which was done as per exhibit PE10. That it is evident
that there was no implied term as suggested by the Plaintiff because the Plaintiff
25 the retailer was also entitled to terminate the Agreement without the need to
provide a reason under clause 16.11, provided written notice was given. That the
Plaintiff has not led any evidence on how the implied term effects or gives
efficacy to the contract.

In regard to the argument about the nature of eviction of the Plaintiff, it was
30 submitted for the Defendant that this had nothing to do with breach of the
contract because there was no contract at the time the Plaintiff left the station;
that the Plaintiff’s contract was terminated on 6th February, 2019, and he was
given until 8th March, 2019 to leave the station, and his exit was concluded on 14th
June, 2019.

35 Decision

The Courts have established that parties are bound by the terms of the contract
that they execute; a breach occurs where that which is complained of, is breach
of duty arising out of the obligation undertaken under the contract, and that the
role of the Court is to simply enforce those terms.(See the Court of Appeal decision

12
 5 in Behange Vs School Outfitters(U) Ltd (2000)1 E.A 20; Barclays Bank of Uganda
Limited Vs Howard Bakojja H.C.C.S No. 53 of 2011, and Nakawa Trading Co. Ltd
Vs Coffee Marketing Board H.C.C.S No. 137 of 1991[1994] 11KALR 15)

The Court of Appeal decision in MTN Uganda Ltd Vs GQ Saatchi & Anor, (supra),
Justice Elizabeth Musoke. JA (as she then was) in the lead judgment defined the
10 term notice as above, and in view of that definition, expounded that notice of a
fact is deemed to have been brought to the attention of a person, if he or she:
(1) has knowledge of it; (2) has received the information about it; (3) has reason
to know about it; (4) knows about a related fact; or (5) is considered as having
been able to ascertain it by checking an official filing or recording, and added
15 the sixth that the notice of a fact must be given within the time frame envisaged
in the agreement or by law.

In the instant case, the Defendant was required to give one months’ written
notice prior to the termination of the Agreement.

Following the guidance in the MTN case above, on when a notice of fact is
20 deemed to have been brought to the attention of a person, and in the absence
of any contrary evidence by the Plaintiff on the above considerations, this Court
finds that the notice of termination of the Agreement dated 6th February, 2019,
which was served on the Plaintiff in accordance with clause 16.15 of the
Agreement, was notice of the termination of the Agreement.

25 The argument of Counsel for the Plaintiff that after 8th March, 2019, the
Defendant’s notice ceased to be valid, and that when the Defendant evicted
the Plaintiff on 14th June, 2019, there was no valid 30 days’ notice of termination
or due notice of a future date of termination therefore, the Defendant’s
termination of the Agreement in the absence of a valid notice was in breach of
30 the Defendant’s obligations under clause 16.15, is untenable.

In respect of clause 2.3 on reconciliation at termination, and clause 16.6, which

gives the options on how goods in the select shop should be treated upon
termination of the Agreement, it is my considered view that these clauses are
express terms of the contract , I therefore, find that the Plaintiff has discharged
35 the burden of proof to the required standard that he was unable in the
circumstances to carry out the reconciliation on 14th June, 2019, when he was
evicted from the premises by the Defendant in a high handed manner.

13
 5 I have taken into further consideration the intention of the parties, which can be
deduced from the language in the Agreement, and the circumstances of this
case, to come to a conclusion that the Defendant was in breach of clauses
16.6.1, and 16.6.2 of the Agreement, on their obligation to carry out a
reconciliation, and how the goods at the select shop were to be handled upon
10 termination of the Agreement.

This is seen in the evidence adduced by the Plaintiff in the final handover report
(PE23), and the Account closure report(PE24), which are not signed by the
Defendant, and the Defendant’s evidence by DW1 under paragraph 2.6 of the
witness statement, that at termination of the contract, the Plaintiff’s stock is also
15 reconciled, and the Defendant is obligated to resale or purchase all
merchantable stock and credit the Plaintiff.

It is notable that the termination of the Retail Business Agreement in itself, does
not amount to breach of contract however, failure by the Defendant to perform
its obligations in clauses 16.6.1, and 16.6.2 of the Agreement, which governed the
20 relationship, and performance of the obligations therein by either party upon the
termination of the Agreement, amounts to breach of the express terms in the
Agreement.

Accordingly, this Court finds that the Defendant’s breach in regard to clauses
16.6.1, and 16.6.2, of the Retail Business Agreement, amounts to breach of the
25 contract.

For reasons above, this issue is partly answered in the affirmative.

Issue No.6: What remedies are available to the parties?

This Court having found issue (4) above partly in the affirmative, further finds as
follows: -

30 Section 61(1) of the Contracts Act, 2010 provides that where there is breach of
contract, the party who suffers the breach is entitled to secure compensation for
any loss or damage caused to him or her.

It is trite law that special damages must be specifically pleaded and strictly
proved. (See the cases of Kyambadde Vs Mpigi District Administration [1983] HCB
35 44; Bonham – Carter Vs Hyde Park Hotel [1948] 64 TLR 177, and Ronald Kasibante
Vs Shell (U) Limited, H.C.C.S No. 542 of 2006)

In the instant case, Counsel for the Plaintiff referred this Court to PE 19, in their
submissions, which is an interim order dated 6th March, 2019.

14
 5 It is my understanding that the Plaintiff failed to adduce evidence to prove the
claim of Ugx 93,000,000(Uganda Shillings Ninety-Three Million only) in special
damages on the basis of PE 19.

In addition, the claim by the Plaintiff under paragraph 39 of the witness statement
in respect of Ugx 200,000,000, that was allegedly held in debt by the credit
10 customers pushed onto the station by the Defendant is not supported by any
evidence; PE 18, which the Plaintiff adduced in evidence, is a transaction report
that relates to the period beginning 18th February, 2019, which time, notice of
termination of the Agreement was already served upon the Plaintiff, therefore,
the Plaintiff’s dealings with the Defendant thereafter, were not binding on the
15 Defendant.

General damages are the direct natural or probable consequence of the

wrongful act complained of, and include damages for pain, suffering,
inconvenience and anticipated future loss. (See Storms Vs Hutchinson [1905] A.C
515)

20 It is settled law that an award of general damages is granted at the discretion of

Court. (See Crown Beverages Ltd Vs Sendu Edward S.C Civil Appeal No. 1 of 2005),
and Uganda Commercial Bank Vs Kigozi [2002] 1 EA 305 on the factors to be
considered by the Courts when assessing the quantum of general damages.

Following the decision in Uganda Commercial Bank Vs Kigozi(supra) on the

25 factors to be considered by the Courts when assessing the quantum of general
damages which are as follows: - the value of the subject matter, the economic
inconvenience that the Plaintiff may have been put through, and the nature and
extent of the injury suffered.

In the given circumstances of this case, the Plaintiff proved that the Defendant’s
30 failure to carry out reconciliation, caused him great loss, economic
inconvenience, mental anguish, and emotional distress on account of the
Defendant’s actions on 14th June, 2019.

This Court therefore finds that the Plaintiff has proved that it suffered economic
inconvenience, loss, and emotional distress for which the Defendant is held liable
35 in general damages.

In the result, I find that the Plaintiff is entitled to general damages, and the sum of
UGX 50,000,000(Uganda Shillings Fifty Million only), is awarded in general
damages, considering the economic inconvenience, and emotional distress
which the Plaintiff has been put through by the Defendant’s action.

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 5 With regard to interest, this Court has considered all the circumstances of this
case, and finds that an award of interest on general damages at the rate of 8%
per annum is sufficient, from the date of judgment until payment in full.

In respect of costs, section 27(1) of the Civil Procedure Act, Cap 71 provides as
follows:

10 “subject to such conditions and limitations as may be prescribed, and to the

provisions of any law for the time being in force, the costs of and incident to all
suits shall be in the discretion of the Court or Judge, and the Court or Judge shall
have full power to determine by whom and out of what property and to what
extent those costs are to be paid, and to give all necessary directions for the
15 purposes aforesaid.”

Taking into consideration the above provision on costs, and that costs follow the
event unless for justified reasons the Court otherwise orders (See section 27(2) of
the Civil Procedure Act, Cap 71), and the decision in Uganda Development Bank
Vs Muganga Construction Co. Ltd (1981) H.C.B 35 where Justice Manyindo (as he
20 then was) held that:

“A successful party can only be denied costs if its proved, that, but for his
or her conduct, the action would not have been brought, the costs will
follow the event where the party succeeds in the main purpose of the suit.”

I find no reason to deny the Plaintiff costs, and accordingly the Plaintiff is awarded
25 costs of this suit.

Judgment is hereby entered for the Plaintiff against the Defendant in the following
terms: -

1. A declaration that the Defendant breached the contract.

2. General damages of UGX 50,000,000(Uganda Shillings Fifty Million only).
30 3. Interest on (2) above at the rate of 8% per annum from the date of
judgment until payment in full.
4. Costs of the suit.

Delivered electronically this 9th day of August, 2023.

35 SUSAN ABINYO
JUDGE
09/08/2023

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