THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA HOLDEN AT MBALE

CIVIL SUIT NO. 52 OF 2022
SAL OIL LIMITED:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF
VERSUS
1. KIRITKUMAR BHIKHULAL SHAH
2. RESHMIKANT BHIKHULAL SHAH
(Administrators of the Estate of the late Kasturben Bhikhulal
Shah)
3. SUNILKUMAR SHAH
(Administrator of the Estate of the late Ratna Vinondchand Shah)
4. MANSUKHLAL GIRDHARBHAI GONDHIA
5. DR. ALAN SHONUBI
T/A SHONUBI, MUSOKE & CO. ADVOCATES::::::::::::::: DEFENDANTS

BEFORE: HON.JUSTICE Dr. LUBEGA FAROUQ

JUDGMENT

1. Introduction
2. The Plaintiff instituted a specially endorsed plaint against the
Defendants for recovery of a sum of Ugx: 100,000,000/=, interest at
a commercial rate of 24% from the date of breach until payment in
full, costs of the suit and any other alternative relief by this court.
3. Background
4. The facts of the case are that the Plaintiff on 12th September 2019,
entered into a contract/ agreement with the Defendants for sale and
purchase of land measuring 0.416 of an acre comprised in Lease
Register Volume 428 Folio 14 Plot 33 and 35, Pallisa Road, Mbale.
The Plaintiff was the purchaser and the Defendants were the
vendors. The 1st, 2nd and 3rd Defendants were represented by the 5th
Defendant in the said transaction by virtue of the Powers of
Attorney. The 4th Defendant was represented by Sunilkumar Shah
in the above stated transaction still by virtue of the Powers of
Attorney.

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 5. In compliance with the terms of the purchase agreement specifically
Clause 3.2, the Plaintiff duly paid the agreed first instalment of Ugx:
100,000,000/= to the 1st , 2nd , 3rd and 4th Defendants through their
lawyer/agent, the 5th Defendant on the 5th Defendant’s Law Firm
Account of M/S Shonubi, Musoke & Co, Advocates, on Account
Number: 9030005842564, Stanbic Bank Uganda Limited, IPS
Branch, Kampala, Uganda which is held in an Escrow account and
the same was acknowledged as received by execution of the said
agreement on 12th of September, 2019.
6. The Defendants however breached the purchase agreement when
they failed to comply with Clause 3.6 and the Plaintiff through its
lawyers wrote a letter dated 24th of September 2021 to the
Defendants rescinding the said agreement and demanded the
refund of Ugx: 100,000,000/=
7. The 1st to 5th Defendants in their written statement of defence denied
all the Plaintiff’s allegations and contended that on execution of the
sale agreement, the Plaintiff took possession of the suit property and
acting through and with their lawyers, commenced the process of
compensating all the third party interests in the suit property.
8. That according to the terms of the agreement, the 1st to 3rd
Defendants applied for resealing of probate obtained in the United
States Kingdom, in Uganda, but the process of identification of the
1st to 3rd Defendants was frustrated by COVID 19 pandemic
outbreak hence, making it impossible for them to travel to Uganda
for identification.
9. That the Plaintiff and its counsel were not willing to receive the other
documents as agreed on account that they were terminating or had
terminated the sale agreement.
10. Counter Claim
11. The Defendants reiterated the averments in the written statement of
defence and prayed for an order of specific performance, payment of
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 the balance on the purchase price, general damages, interests and
costs of the counter claim.
12. Legal Representation
13. M/S Soita & Co. Advocates represented the Plaintiff whereas M/s SM
& Co. Advocates (formerly Shonubi Musoke & Co. Advocates
represented the Defendants.
14. Issues for determination
(a) Whether the 5th Defendant is a proper party to the suit?
(b) Whether the Defendants/Counterclaimants are in breach of the
sale and purchase agreement of land measuring 0.416 of an acre
comprised in Leasehold Register Volume 428 Folio 14, Plot 33 and
35 Pallisa Road, Mbale entered into with the Plaintiff/Counter
Defendant on 12th September 2019?
(c) Whether the Plaintiff/Counter defendant is in breach of the
agreement of sale dated 12th day of September, 2019?
(d) What remedies are available to the parties?
15. For proper determination of the matter in dispute, this court has
further framed the fifth issue which is; Whether the Plaintiff was right
to rescind the sale and purchase agreement dated 12th of September,
2019?
16. Burden and standard of proof.
17. The burden of proof in civil matters lies upon the person who asserts
or alleges. Any person who wishes the court to believe the existence of
any particular fact or desires any court to give judgment as to any legal
right or liability dependent on the existence of facts which he or she
asserts, must prove that those facts exist. The standard of proof
required is on the balance of probabilities. (See: sections 101, 102 and
103 of the Evidence Act Cap 8 and Miller V. Minister of Pensions
[1947]2 ALL ER 372 (25 July 1947)
18. The above principle was reiterated in Dr. Vincent Karuhanga t/a
Friends Polyclinic V. National Insurance Cooperation and Uganda
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 Revenue Authority HCCA No. 617 of 2002 (2008) ULR 660 at 665,
Court observed that-
“in law, a fact is said to be proved when court is satisfied
as to its truth. The evidence by which that result is
produced is called the proof. The general rule is that the
burden of proof lies the party who asserts the affirmative
of the issue or question in dispute. When that party
adduces evidence sufficient to raise a presumption of
that which he asserts is true, he is said to shift the
burden of proof that is, his allegation is presumed to be
true unless his opponent adduces evidence to rebut the
presumption.”
19. Issue No.1: Whether the 5th Defendant is a proper party to the
suit?
20. Counsel for the Defendants submitted that, the law on agents is that
known principals will be liable for the obligations that arise from a
contract entered into by their agents.
21. He cited section 158 of the Contracts Act Cap 284 which provides that-
“ a contract entered into through an agent and obligations arising from
an act done by an agent under a contract shall be enforced in the same
manner and have the same legal consequences as if the contract was
entered into or done by the principal.”
22. He further cited the case of Friendship Container Manufacturer Ltd V.
Mitchell Cotts (K) Ltd (2001) 2 EA 338, where the court while citing
Ram V. Singh (1933) 5 ULR 76 noted that- “a person who acts as
another’s agent in a transaction with the knowledge of the Plaintiff is
not liable to the Plaintiff in respect of that particular transaction”.
23. Following that section and the authorities, counsel argued that the
Plaintiff has always been aware of the principals who appointed the 5th
Defendant as their agent. He also contended that in paragraph 1.4 and
1.6 of the joint scheduling memorandum and in paragraph 8(b) of the
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 specially endorsed plaint, the Plaintiff acknowledges that the 1st to 4th
Defendants were represented by the 5th Defendant by virtue of the
Powers of Attorney as their agent.
24. Counsel invited this court to find that the 5th Defendant was only an
agent of the principals and therefore, should not be a party to this suit.
25. Counsel for the Plaintiff on the other hand submitted that according
to the witness statement of PW1, it is clear that the 1st to 3rd
Defendants were represented by the 5th Defendant at the time of the
transaction of sale and that pursuant to Clause 3.2 of the agreement,
the Plaintiff paid a sum of Ugx: 100,000,000/= on an Escrow Account
Account No. 9030005842564 in Stanbic Bank in the name of Ms.
Shonub, Musoke & Co. Advocates (5th Defendant).
26. Determination by Court
27. The position of the law is that where an agent acts on behalf of the
principal and in case of any liability, the principal is to be held liable.
(See: Mitkus, S., Jurkevičius, V; Agency Law in Business
Relationships: The Main Characteristics from a Comparative
Perspective. (2014))
28. In this case, DW1 entered in to a sale agreement (PEXH.2) for sale of
land measuring 0.416 of an acre of land comprised in LRV 428 FOLIO
14 Plot 33 and 35 Pallisa Road Mbale on behalf of the 1st to 3rd
Defendants. The 5th Defendant alleges that at all the time, the Plaintiff
was aware of the 1st to 4th Defendants as the principal and therefore
wrongly sued the 5th Defendant.
29. However, from the evidence of DW1, it is clear that the 1st to 4th
Defendants are not residents in Uganda. This is evident from his
written statement under paragraph 4 where he stated that- “the 1st to
the 4th Defendants being residents in the United Kingdom, granted or
appointed the 5th Defendant to be their agent for purposes of signing the
agreement and the relevant documentation relating to among others to
the sale and transfer of the suit property.”
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 30. The above piece of evidence illustrates that the 5th Defendant was given
full power to manage all matters relating to the sale and transfer of the
property, which property was never transferred to the Plaintiff, despite
part payment of the purchase price as agreed under PEXH.2.
31. DW1 further testified that the terms of the agreement required the 2nd
and 3rd Defendants to among other things to reseal their probate that
had been granted to them in the United Kingdom. Unfortunately, they
were prevented by the outbreak of COVID 19 which followed closure of
the airport or travel in November, 2019.
32. My understanding of all that evidence is that, the 1st to 4th Defendants
are not residents in Uganda. Although the 5th Defendant alleged that
at all the time the Plaintiff was aware of the principal, no evidence was
led to show that the Plaintiff has ever met or interacted with the 1st to
4th Defendants regarding the transaction in dispute.
33. Secondly, according to the sale agreement (PEXH.2) and receipt
payment of Ugx: 100,000,000/= (PEXH.3), it is apparent that the
money was paid on the 5th Defendant’s account but not on the account
of the 1st to 4th Defendants.
34. It should further be noted that the cause of action in this cause is
about breach of contract which arises from the sale transaction
entered into between the Plaintiff and the 5th Defendant on behalf of
the 1st to 4th Defendants.
35. As clearly indicated by the 5th Defendant, it was under a duty to
manage the sale and transfer of the suit property to the Plaintiff. The
said duty has however never been fulfilled to date.
36. Therefore, the 5th Defendant having been the one with the authority to
ensure proper transfer of the suit property to the Plaintiff which has
never matured, the Plaintiff rightly sued it and it is a proper party to
the suit.
37. Issue No.2: Whether the Defendants/Counterclaimants are in
breach of the sale and purchase agreement of land measuring
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 0.416 of an acre comprised in Leasehold Register Volume 428
Folio 14, Plot 33 and 35 Pallisa Road, Mbale entered into with
the Plaintiff/Counter Defendant on 12th September 2019?
38. Issue No.3: Whether the Plaintiff/Counter defendant is in breach
of the agreement of sale dated 12th day of September, 2019?
39. It is a greed fact that the Plaintiff and the 1st to 4th Defendants entered
into a transaction for the sale of the property comprised in LRV 428
FOLIO 14 PLOT 33 and 35 Pallisa Road Mbale measuring 0.416 of an
acre of land and the same was admitted in this court as PEXH.2.
40. PW1 testified that in compliance with clause 3.2 of PEXH.2, the
Plaintiff duly paid the agreed first instalment of Ugx: 100,000,000/=
to the 1st to 4th Defendants through their lawyer/ agent, on the 5th
Defendant’s law firm account of M/S Shonubi, Musoke & Co.
Advocates on Account No. 9030005842564, Stanbic Bank Uganda
Limited, IPS Branch, Kampala, Uganda which was an Escrow account
and the same was acknowledged as received by execution of the said
agreement on the 12th of September, 2019. This fact was admitted by
DW1 under paragraph 8 of his written statement.
41. PW1 further told court that pursuant to clause 3.6 of PEX.2, the
Defendants were obliged within one month from the date of execution
of the said agreement as a condition precedent upon receipt of the
above mentioned first instalment, to hand over to the Plaintiff or her
agents of M/S Anguria & Co. Advocates the documents necessary for
transfer of the property.
42. PW1 in addition testified that the Defendants breached in material
form the above condition since the one month expired on 12th of
October, 2019 without availing it with the said documents. That, as a
result of the breach, the Plaintiff through its lawyers, wrote a letter
dated 25th of September 2021 to the Defendants rescinding the said
agreement and demanded the refund of Ugx: 100,000,000/=.

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 43. Upon receipt of the said letter, the 5th Defendant instead of refunding
the money, responded to the Plaintiff’s lawyer on 6th of October, 2021
committing themselves to fulfill all their obligations under the
agreement which commitment they again failed to heed.
44. The Defendants having given no justifiable reason for the breach, the
Plaintiff through its lawyer wrote a letter dated 18th of October, 2021
to the Defendants retaliating its position that the agreement had been
rescinded and demanded for the refund of the money.
45. PW1 testified that despite several demands, notices and reminders by
the Plaintiff, the Defendants have since deliberately refused, failed or
ignored to refund the Ugx: 100,000,000/=
46. DW1 testified that the Plaintiff took over possession of the suit property
after the deposit of the consideration and commenced the process of
compensating the tenants that were on the suit land and that the
Plaintiff’s lawyer engaged various authorities including the Resident
District Commissioners and Police to assist him with obtaining vacant
possession of the suit property.
47. DW1 stated that he approached the Plaintiff’s lawyer who informed
him that he had found a lot of resistance in removing the tenants and
there was other various interests on the property which were all
claiming compensation. He testified that the Plaintiff’s lawyer told him
that the cost of compensating these interests had gone beyond what
he and his client had anticipated and as such, requested that
consideration be reduced by at least Ugx: 100,000,000/= but the 1st
to 4th Defendants were reluctant to do so.
48. DW1, further said that when the 2nd and 3rd Defendants were
processing the resealing of the probate, they were required by the High
Court to appear for proper identification, in Uganda. Unfortunately,
the outbreak of the COVID 19 led to the closure of the airports/travel
in Europe in November 2019 and the 2nd and 3rd Defendants were
unable to travel out of Europe to Uganda for identification.
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 49. That the 5th Defendant requested to handover the documents in his
possession, that is the certificate of title and release of caveats on the
property together with identification documents of the 1st to 4th
Defendants to the Plaintiff’s lawyer who advised that they were of no
use to him until they had the resealed probate of the 2nd and 3rd
Defendants.
50. In addition, DW1 testified that in September 2021, the 5th Defendant
was summoned to Parliament to appear and explain the dealings on
the suit property which followed an inquiry by the Committee on
Statutory Authorities and Statutory Enterprises (COSASE) on the
expropriated properties in Mbale and were advised to halt the dealings
in the property at the time.
51. Determination by court
52. The Black’s Law Dictionary 7th Edition defines breach of contract
as- “violation of a contractual obligation either by failing to perform one’s
own promise or interfering with another party’s performance.”
53. In Ronald Kasibante V. Shell Uganda Ltd HCCS No. 542 of 2006
[2008] ULR 690, it was stated that-
“Breach of contract is the breaking of the obligation which a
contract imposes which confers a right of action for damages on
the injured party. It entitles him to treat the contract as
discharged if the other Party renounces the contract or makes
the performance impossible or substantially fails to perform his
promise; the victim is left suing for damages, treating the
contract as discharged or seeking a discretionary remedy.
54. Also in Bimba Agro Livestock Company Limited V. Landmark
University (2020) 15 NWLR (Pt. 1748) 465 (P. 498, paras. A-C), it
was stated that-
“The term breach of contract denotes a violation of a contractual
obligation, either by failing to perform one’s own promise or by
wantonly interfering with another party’s performance of the
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 contract. A breach of contract may be occasioned by non-
performance or by repudiation or both.”
55. From the above evidence, it is the Plaintiff’s contention that the
Defendants breached the contract when they failed to comply with
Clause 3.6 of the contract (PEXH.2).
56. Clause 3.6 of the agreement/ contract (PEXH.2) provides that-
“the vendor shall upon receipt of the first installment of the
consideration and in any case not exceeding one month from the
date of execution hereof, hand over to the purchaser the documents
necessary for transfer of the property herein referred to as the
instrument of transfer namely-
(a) The resealed letters of administration from the High Court of
Uganda for the late Kasturben Bhikhulal Shah and the late
Vinonchand Shad
(b) Certificate authorizing repossession No. 1919 dated 18 th
December, 1993 issued to the Registered proprietors
(c) A letter to the Departed Asians Custodian Board and the
Commissioner Land Registration requesting for the vacation of
the caveat by the Departed Asians Custodian Board.
(d) A letter assigning the receivable rental arrears from the tenants
of the property
(e) Passport copies of the vendors and two passport photos each
(f) Certified copies of the registered powers of attorney issued to
the vendors
(g) Duly signed and sealed deed of transfer for the property
(h) Duly signed withdrawal of caveat form of the caveat of
Shonubi, Musoke & Co. Advocates
(i) The duplicate certificate of title of the property
which documents shall be delivered to the purchaser’s agent i.e M/S
Anguria & Co. Advocates for purposes of the transfer of the property.

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 57. In Odger’s Construction of Deeds and Statute, 5th edition, it is
stated at page 28 that-
“Rule I, the rule of the document or a particular part of it, is
therefore to be sought from the document itself. In other words,
the intention of the parties must be discovered, if possible, from
the expression they have used.”
58. Guided by the above construction, the coaching of clause 3.6 indicates
that it was mandatory to be fulfilled by the Defendant. The said clause
is coached in the way emphasizing time frame within which that
condition was supposed to be performed.
59. According to PEX.3, the first instalment was paid on 12th of September,
2019, which means the one month stated under Clause 3.6 expired on
12th of October, 2019.
60. PW1 alleged that it was never availed with any document indicated in
Clause 3.6 of the agreement and to date, it has never been given any
document.
61. Counsel for the Defendants submitted that at the drawing of the
agreement, the parties were under the impression that the process of
resealing of the probate was by letter but the court insisted on formal
applications for resealing of the letters of administration and the
Defendants filed their application for probate on 5th of November,
2019. With due respect I did not agree with counsel.
62. Before entering into any contract, the Defendants ought to have
applied for a reseal of probate either by way of a letter or a formal
application or, alternatively, should have obtained the same before
committing to performance within one month.
63. Alternatively, in case of any delay, the Defendants ought to have
communicated the same to the Plaintiff but no evidence was adduced
to that effect.
64. Therefore, the reason advanced by counsel is, therefore, baseless in
the circumstances.
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 65. Counsel further argued that the petition for resealing of probate was
filed on 5th November 2019, but the process was delayed due to the
COVID-19 outbreak. However, the agreed period for availing the said
document was one month, which expired on 12th October 2019 prior
to the outbreak of COVID-19. The claim of frustration is, therefore,
unsustainable, as the agreed period had already lapsed.
66. Be the above as it may, none of the other documents which were in the
possession of the 5th Defendant were availed to the Plaintiff within the
period required under Clause 3.6 of PEXH.2.
67. Although DW1 claims that he wanted to issue documents in his
possession to the Plaintiff which request was allegedly rejected by the
Plaintiff, no evidence was led to support that fact.
68. In addition, counsel for the Defendant submitted that a contract may
also be discharged due to government intervention. He argued that
once a contract has been entered into, a party may be prevented from
performing his or her obligations by government rules, regulations or
enactments.
69. According to DW1, he was summoned by Parliament for an inquiry by
COSASE in September 2021, which he claims halted any dealings with
the suit property. However, this alleged halt occurred way beyond the
period within which the contract was to be performed. Based on
PEXH.2, by the time COSASE or Parliament invited the 5th Defendant,
the transaction between the Plaintiff and the Defendants ought to have
already been completed.
70. DW1 also testified that the Plaintiff took over possession of the suit
property immediately after the execution of the agreement and
embarked on the process of compensating the tenants. This fact was
denied by the Plaintiff.
71. I have also had the opportunity to review Clause 3.9 of PEXH.2, and it
is unclear how the Plaintiff could assert ownership of a property that

12 | P a g e
 previously belonged to another person, without providing any proof of
ownership.
72. Technically, for Clause 3.9 to take effect, the Defendants ought to have
fulfilled the condition set out in Clause 3.6. In the absence of such
fulfillment, the Plaintiff could not lawfully take possession or assume
management of the property.
73. In any case, no evidence was led by the Defendants to prove that the
Plaintiff took over possession of the suit property. For example, a letter
introducing the Plaintiff to the tenants or any instrument transferring
the same to the Plaintiff.
74. In light of the above analysis, I am satisfied that the Defendants
breached the sale or purchase agreement executed on 12th of
September, 2019.
75. Issue No.4: Whether the Plaintiff had a right to rescind the sale
or purchase agreement dated 12th of September, 2019?
76. Section 47 (1) of the Contracts Act Cap 284 provides that-
“Where a party to a contract promises to do a certain thing at
or before the specified time but fails to do the thing at or before
the specified time, the contract or the part of the contract that
has not been performed, becomes voidable at the option of
the promisee, if the intention of the parties was that time was
of the essence to the contract.”(The underlined emphasis is
mine)
77. Section 53 of the Contracts Act Cap 284 provides that-
(1)Where a person at whose option a contract is voidable,
rescinds it, the other party to the contract need not perform
any promise contained in the contract.
(2) A party who rescinds avoidable contract shall, if that party
received any benefit from the other party to the contract, restore
the benefit to the person from whom it is received.

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 78. Section 47 provides that a contract, or any part thereof, which has not
been performed becomes voidable at the option of the promisee if it
was the intention of the parties that time would be of the essence.
Furthermore, Section 53 of the same Act allows the party for whom the
contract is voidable to rescind it.
79. According to the way Clause 3.6 of PEXH.2 was coached, it is obvious
that time was of essence and that is why, the Plaintiff emphasized it in
all its correspondences. This is also evident from the Defendants when
DW1 said that he wanted to hand over the documents he had in his
possession after the agreed time frame and the Plaintiff rejected them.
(See: Steedman V. Drinkle & Another [1914-15] ALL ER 298 and
Sharif Osman V. Hajji Haruna Mulangwa SCCA No. 38 of 1995,
where it was stated that-
“the principal at common and in equity is that, in absence of a
contrary intention, time is essential even though it has not been
expressly made by the parties. Performance must be completed
upon the precise date specified. Otherwise an action lies for
breach…However in equity time is essential if the parties
expressly stipulate that it shall be so…”
80. PW1 testified that, following the Defendants' failure to fulfill the
conditions under Clause 3.6 of the agreement, the Plaintiff, through
its lawyers, issued a letter dated 24th September 2021 (PEXH.4)
rescinding the contract. This position was reiterated in PEX.6, wherein
the Plaintiff demanded a refund of UGX 100,000,000/=, which had
been paid as the first instalment.
81. The fact that parties were under a duty to comply with Clause 3.6 of
PEXH.2 was admitted by the 5th Defendant when he gave reasons for
failure to fulfill within one month.
82. It follows, therefore, that since the Defendants made a false promise to
provide the Plaintiff with instruments of transfer for the suit property,
the Plaintiff was justified in rescinding the contract.
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 83. Counsel for the Defendants submitted that clause 3.6 of the sale
agreement was frustrated by COVID 19 and government intervention.
For those reasons, the Defendants prayed for specific performance of
the contract.
84. Section 64 (1) of the Contracts Act Cap 284 provides that-
“Where a party to a contract, is in breach, the other party may
obtain an order of court requiring the party in breach to
specifically perform his or her promise under the contract.”
85. My comprehension of the above provision is that in case of any breach,
the innocent party may obtain an order requiring the party in breach
to perform his or her promise under the contract.
86. I have already found under issue No.2 and 3 that it was the Defendants
who breached the contract, but the Plaintiff did not pray for specific
performance but rather rescinded the contract.
87. In Nipuni Bhatia and Another V. Boutique Shazim Limited Court
of Appeal Civil Appeal No. 179 of 2015, the court stated that-
“Specific performance is an equitable remedy in the law of
contract, where a court issues an order requiring a party found
in breach to a specific act to complete performance if the
applicant is in breach of his or her obligations under the
contract.”
88. The court in the same case further cited Australian Hardwood Pity
Limited V. Commission for Railways [1961] 1 ALL ER 737 at 742,
where Lord Radcliff stated that-
“…a Plaintiff who asks court to enforce by mandatory order in
his favour some stipulation of an agreement which itself
consists of interdependent undertakings between the Plaintiff
and the defendant cannot succeed in obtaining such relief if he
is at the time in breach of his own obligation…”
89. In this case, according to Clause 3.6 of PEXH.2, it is clear that the
Defendants were supposed to avail the instruments or documents of
15 | P a g e
 transfer of the suit property to the Plaintiff within a period of one
month which expired on 12th October, 2019 but the Defendants failed
to comply with the said provision, and no communication was made
until September, 2021, when the Plaintiff rescinded the said contract.
That conduct by the Defendants showed lack of willingness to perform
the said contract.
90. In Steedman V. Drinkle and Another [1914-15] ALL ER 298, it was
stated that- “the jurisdiction to grant specific performance cannot be
exercised where the parties have expressly indicated in their
agreement that time is of essence”.
91. The Court of Appeal Justices in Nipuni Bhatia and Another V.
Boutique Shazim Limited (Supra) while finding that the trial court
wrongly ordered specific performance, noted that in equity, court will
not order specific performance to a party who comes to court with
unclean hands.
92. Therefore, the Defendants having been the ones who breached the
contract, it will not be in the interest of justice to order specific
performance where the affected party opted to rescind the contract
upon breach of such a material condition.
93. Counter Claim
94. The Defendants in the counter claim reiterated the averments in the
written statement of defence. In their evidence, DW1 admitted that the
Defendants did not comply with Clause 3.6 of PEX.2 which required
the Defendants to provide the Plaintiff with the instrument of transfer
within a period of one month, hence, breached the contract.
95. The Defendants attributed its failure to comply with Clause 3.6 of
PEX.2 to frustration and government intervention. I have however
determined that the said frustration and government intervention
occurred after the agreed time frame, thus, not sustainable.
96. DW1 further claimed that he wanted to avail the transfer documents
which were in his possession to the Plaintiff but the Plaintiff rejected
16 | P a g e
 them. No evidence was however led by the Defendants to prove that
the said documents were availed to the Plaintiff before 12th October,
2019 and it rejected them.
97. The Defendant did not also lead any evidence to prove that the Plaintiff
breached any term or condition of the contract (PEX.2).
98. With the above, the counter claim accordingly fails.
99. Issue No.5: What are the remedies available to the parties?
100. The Plaintiff prayed for the refund of Ugx: 100.000.000/= at a
commercial interest rate of 24% and costs of the suit.
101. Section 53 (2) of the Contracts Act (Supra) provides that-
“A party who rescinds avoidable contract shall, if that party
received any benefit from the other party to the contract, restore
the benefit to the person from whom it is received.”
102. It is, therefore, the legal position that the effect of rescission is to
reverse all actions taken by the parties in the formation of the
contract, restoring them to the position they were in prior to the
contract (status quo ante), as if the contract had never been made it
is treated as void ab initio. (See: LexisNexis dispute resolution
expert)
103. In this case, it is an agreed fact that the Plaintiff made the first
instalment of Ugx: 100,000,000/= on 12th of September, 2019 and the
same shall be refunded to the Plaintiff.
104. The Plaintiff prayed for 24% interest rate on Ugx: 100,000,000/=from
the date of breach to payment in full.
105. PW1 testified that, after realizing that the Defendants had breached
the contract, the Plaintiff wrote a letter dated 24th of September, 2021
rescinding the contract and demanding for the refund of
Ugx:100,000,000/=. However, instead of refunding the said money,
the Defendants through their lawyer the 5th Defendant wrote a letter
committing itself to pay but the same was rejected by the Plaintiff
when it reiterated its position in its earlier letter in PEXH.6.
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 106. Section 26(2) of the Civil Procedure Act Cap 282 provides that-
“where and in so far as a decree is for the payment of money,
the court may, in the decree, order interest at such rate as the
court deems reasonable to be paid on the principal sum
adjudged from the date of the suit to the date of the decree, in
addition to any interest adjudged on such principal sum for any
period prior to the institution of the suit, with further interest at
such rate as the court deems reasonable on the aggregate sum
so adjudged from the date as the court deems reasonable on
the aggregate sum so adjudged from the date of the decree to
the date of payment or to such earlier date as the court thinks
fit.”
107. My understanding of the above provision is that the law placed the
discretion to determine interest to court.
108. Based on the facts of this case, the Plaintiff paid UGX 100,000,000/=
to purchase the property. From the evidence on record, it is
established that the said property is a business property; it is
therefore presumed that the Plaintiff purchased it for business
purposes.
109. Secondly, considering the time the Plaintiff spent without using its
money, which is a period of almost 6 years, it is awarded interest of
16% from the date of this judgment to payment in full.
110. In the final result, this suit hereby succeeds in the terms below-
(a) It is declared that the 1st 2nd 3rd and 4th Defendants breached the
sale or purchase agreement dated 12th of September, 2019.
(b) It is declared that the Plaintiff was right to rescind the contract
dated 12th of September, 2019.
(c) The 1st, 2nd, 3rd and 4th Defendants are ordered to refund Ugx:
100,000,000/= which was paid on 12th of September, 2019 on the

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 5th Defendant’s Account No. 9030005842564, Stanbic Bank
Uganda Limited, IPS Branch, Kampala, Uganda.
(d) The Plaintiff is awarded 16% interest to be paid from the date of
judgment till payment in full.
(e) The counter claim against the Plaintiff/counter defendant is hereby
dismissed.
(f) Costs of this suit and of the counter claim are awarded to the
Plaintiff.

I so order.

…….………………….
Dr. LUBEGA FAROUQ
Ag. JUDGE
Judgment delivered electronically via the emails of the Advocates of the
parties on 15th day of August, 2025

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