GoodWill Lab Supplies v National Drug Authority (Civil Suit No. 58 of 2021) [2022] UGCommC 88 (23 September 2022)

### THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

### (COMMERCIAL DIVISION)

#### CIVIL SUIT No. 58 OF 2021

GOODWILL LAB SUPPLIES LTD ................................... 10

**VERSUS**

NATIONAL DRUG AUTHORITY ....................................

#### **BEFORE: HON. LADY JUSTICE SUSAN ABINYO**

## 15

$\mathsf{S}$

## **JUDGMENT**

#### Introduction

The Plaintiff is a limited liability company incorporated under the Laws of Uganda. The Defendant is a statutory body established by an Act of Parliament with the capacity to sue and be sued. The Plaintiff instituted this suit against the Defendant

for recovery of a sum of UGX 272,814,349 (Uganda Shillings Two Hundred Seventy 20 Two Million Eight Hundred Fourteen Thousand Three Forty Nine only) as the contract sum, Orders for specific performance, general damages, interest and costs of the suit.

**Facts**

- That on 26<sup>th</sup> April, 2018, after the Plaintiff emerged the best evaluated bidder, the 25 Defendant entered into a framework contract with the Plaintiff for supply, and delivery of Chemicals and Reagents (Lot1), and Secondary Reference Standards (Lot 2) for a period of 3 years renewable every after one year. That the Defendant made purchase orders to which quotations were made by the Plaintiff, and the - Plaintiff was duly paid upon delivery of the items for the first three Local Purchase 30 Orders namely; No. 4617, No. 4640, and No. 5049.

That the Plaintiff made delivery for the Local Purchase Order No. 5089 for consideration of UGX 260, 802, 381.84 (Uganda Shillings Two Hundred Sixty Million Eight Hundred Two Thousand Three Eighty One Eighty Four Cents only), and

subsequently the Plaintiff made part delivery in respect of Local Purchase Order 35

- <sup>5</sup> No. 5651, ond to dote, the completion of the delivery owoits o request from the Defendont os wos the proctice. Thot the poyment for the port delivery omounting to UGX 12,01 1,968(Ugondo Shillings Twelve Million Eleven Hundred Thousond Nine Sixiy Eighi only) remoins outsionding. Thoi ihe tolol bolonce of UGX 272,814,349 remoins outstonding io dote, in which the Defendont is held lioble to poy wilh - interesl of commerciol rote of 25% per onnum. Thol to dote no Locol purchose order hos been received on lhe Secondory Reference Stondords (Lot 2) of the conlroct os ogreed, ond thol the Defendoni is in breoch of the controct. 10

The Defendont filed o defence ond denied the cloim, ond thot the Plointiff sholl be put 1o strict proof thereof. Thol the inconsistencies of the prices quoted in the

- Locol Purchose Order No. 5089, ond lhe originol price list were reolised ond communicoted 1o the Ploinliff, ond thot the Ploiniiff ocknowledged the inconsistencies in the prices, ond corrected the Locol Purchose Order No. 5089 to reflecl UGX 248,790,413.84 (Ugondo Shillings Two Hundred Forty Eighl Million Seven Hundred Ninety Thousond Four Thirteen Eighty Four Cents only) 15 - Thoi in respect of the Locol Purchose Order No. 5651, the procurement wos under invesligotion by the Criminol lnvesiigotions Directorote of Police, ond ihe Public Procurement ond Disposol of Public Assels Authority for olleged inegulorities, ond no further oclion could be loken pending completion of the soid investigotions. Thot due lo the findings of the invesligotions, ihe Defendont's Accounting Officer 20 - wos odvised to suspend ihe poymeni of the Locol Purchose Order No.5089, ond the Locol Purchose Order No. 5651 which wos issued on 2nd Moy, 2019 wos retrieved from ihe Ploinliff following the non+enewol of lhe controcl between the porties. Thot the delivery of lhe goods ogoinst the Locol Purchose Order No. 5651, could not hove token ploce before the issuonce of the Locol Purchose Order. 25 - Thot under the fromeworks controct, o coll off order is mode os ond when the Procuring ond Disposing entily expresses the need for ilems, for which the provider is oble 1o supply. ond lhot ihe Procuring ond Disposing entity did not express the need for ony items under Lot 2 of the controct, ond resultontly no coll off order wos issued under the conlroct. Thol the Defendoni is noi responsible for ony 30 - inconvenience, loss ond domoge the Plointiff hos suffered. 35

## Represento lion

The Plointilf wos represented by Counsel Ekimo Emmonuel of Omongole & Co. Advocotes while the Defendoni wos represenled by Counsel Kobuzire Diono of the Legol Services Deportmenl of the Notionol Drug Authority.

- At scheduling, Counsel for the Defendant was absent, however, Court informed $\mathsf{S}$ Counsel for the Plaintiff that on the basis of paragraph 16 of the Joint Scheduling Memorandum filed by the parties on 1<sup>st</sup> June, 2021, in which the parties expressed interest to settle the matter through mediation, it was proper for the parties to explore the possibility for settlement, and for that reason, the Court adjourned. - Subsequently, when the matter was fixed for mention, Counsel for the Plaintiff 10 appeared, and informed Court that the parties had reached a settlement however, the issue of interest and costs remained unsettled. Counsel for the Defendant did not appear. A partial consent Judgment was entered on the terms agreed by the parties by the Deputy Registrar on 6<sup>th</sup> May, 2022, that the - Defendant pays to the Plaintiff a principal sum of UGX 260,754,119(Uganda 15 Shillings Two Hundred Sixty Million Seven Hundred Fifty Four Thousand One Nineteen only) as money owing from the contract of supply.

This Court directed Counsel for the parties herein, to file written submissions in regard to interest, and costs hence this Judgment.

**Interest** 20

Section 26 (2) of the Civil Procedure Act, Cap 71 provides that:

"Where and insofar 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 25 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 of the decree to the date of payment or to such earlier date as the Court thinks fit." - It was submitted for the Defendant that Order 6 Rule 7 of the Civil Procedure Rules, 30 prohibits departure from the pleadings by the parties, and that the Plaintiff's claim of loans obtained, and interest thereon, was neither pleaded nor corroborated by the evidence filed before this Honourable Court.

In rejoinder, Counsel for the Plaintiff submitted that due to the delayed payment by the Defendant, the Plaintiff was issued with a default notice from Tropical Bank 35 attached as Annexture "A"

I have looked at the trial bundle filed by the Plaintiff on 1st June, 2021, and find that the default notice claimed by the Plaintiff to have been issued by Tropical Bank, and attached as Annexture "A" is not in the trial bundle.

<sup>5</sup> Be thot os it moy, ihis Court finds thot the Plointiff did not pleod ony focts in respect of lhe loon, os such the Plointiff con neither roise nor odduce evidence oi the lriol on the issue of the loon. (See Slruggle (U) Ltd Vs Pon Africon ,nsuronce Co. Ltd fi990-199U KLR 50 ot p9.53)

ln the result, I find ihot the Plointiff foiled to justify the cloim for the oword of interest ot the roie oI 25% per onnum. 10

l1's well esloblished thot the Court exercises discretionory powers to oword inleresl ot such rote os it moy think just however, such discretion must be exercised judiciously loking into occount oll the circumslonces of the cose. (See Ugondo Reyenue Aulhorily Vs Slephen Mobosi SC. Civi, Appeol No. 26 of 1995)

- ln the obsence of ony ogreement by ihe porlies herein, on the interesl rote poyoble, this Court deems il fit lo moke Orders for the oword of interest on lhe decretol sum of UGX 260,754,1l9(Ugondo Shillings Two Hundred Sixly Million Seven Hundred Fifty Four Thousond One Nineleen only), ot Court role from the dote of filing the suit until poyment in full. 15 - 20 Cosls

ln regord to costs, section 27111 oI the Civil Procedure Act, Cop 7l provides os follows:

25 "sublect to such conditions ond limilotions os moy be prescribed, ond to the provisions of ony low for the time being in force, the cosls of ond incideni to oll suits sholl be in the discretion of the Court or Judge, ond the Court or Judge sholl hove full power lo determine by whom ond out of whot properly ond to whot extent lhose cosls ore to be poid, ond to give oll necessory direclions for the purposes oforesoid."

lhove token inlo considerotion ihe provision obove on the opporlion of costs,

30 ond thol costs follow the event unless for good reosons the Court otherwise orders ISee secfion 27(2) ot the Civil Procedure Act. Cop 7l).

Following the decision in Ugonda Developmenl Eonk Vs Mugongo Construction Co. ttd (1981) H. C. B 35 where Justice Monyindo (os he then wos) held thot:

"A successful porty con only be denied cosfs if ils proved, thot, but for his or her conduct, the oction would not hove been brought, lhe costs will <sup>f</sup>ollow the event where the porty succeeds in the moin purpose of the suil. "

<sup>5</sup> ln the given circumstonces of this cose, lfind thot the Plointiff deserves costs of the suit.

Judgment is hereby entered for the Plointiff in the following terms: -

- I. An Order for poyment of the principol sum of UGX260,754,119(Ugondo Shillings Two Hundred Sixty Million Seven Hundred Fifty Four Thousond One Nineleen only). - 10

- 2. lnterest ot 6% pd onnum on (l ) obove, from the dote of filing the suil until poyment in f ull. - 3. Costs ore oworded to lhe Plointiff.

Doted, signed ond delivered by emoil to Counsel for the porties herein, this 23rd doy of September,2022.


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