Mesco Limited v Gulf Badr Group (U) Limited (Civil Suit 344 of 2020) [2024] UGCommC 336 (21 October 2024)

Full Case Text

### THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT KAMPALA

## **COMMERCIAL DIVISION**

# **CIVIL SUIT NO. 344 OF 2020**

MESCO LTD :::::::::::::::::::::::::::::::::::

### **VERSUS**

### GULF BADR GROUP (UGANDA) LTD::::::::::::::::::::::::::::::::::::

### Before: Hon. Lady Justice Patricia Kahigi Asiimwe

### Judgment

#### Introduction:

$1.$ The Plaintiff sued the Defendants for compensation of USD 7600 as demurrages/port clearing fees, shipping, clearing fees/professional fees. The Plaintiff also sued for a declaration that the Defendant defrauded the Plaintiff and illegally converted his property, compensation in damages for losses suffered, loss of business and income, punitive/exemplary professional negligence, interest damages for at the commercial rate of 30%, general damages and costs of the suit.

## Facts:

- $2.$ The facts of the case are that the Plaintiff bought 26,378.08 kilograms of aluminium profile at USD 92,360.63 from Nanhi Shun Tang Import and Export Co. Ltd of China. On the 18th day of August 2018, the goods were shipped via Ocean Sea Vessel/Voy No. EVERDEVELOP 123W from China to Mombasa under a contract of carriage issued by the carrier (Evergreen Line. The cargo arrived on the 4th day of September 2018. - 3. On the 3rd day of April 2019, the Plaintiff wrote a letter to Evergreen Line requesting for a waiver on the demurrage. The Plaintiff's Director was directed to deliver the letter to the Defendant's offices where he met Eunice Karugonjo (PW) who

later responded to the letter and advised that he had been given a 50% discount on demurrage charges.

$\mathfrak{g}$

- On 20th May 2019, the Plaintiff through its clearing agent Eri $4.$ Kenya Limited issued a KCB Bank Cheque to Gulf Badr Group (Kenya) Ltd worth 6,897 to cater for the accrued demurrage charges. The Plaintiff did not receive its goods and it was brought to the attention of the Defendant subsequently that the Plaintiff's consignment had been auctioned off by the Kenya Revenue Authority on the 15th day of April 2019. - On 27th May 2019, Eri Kenya Limited wrote to the Defendant $5.$ requesting a refund of USD 6897 on 25th July 2020 Eri Kenya Limited was issued a container detention refund cheque no. 004286 of USD 6897.

# Representation:

At the hearing, the Plaintiff was represented by Omongole & 6. Co. Advocates. The Defendant was represented by Kibuka Musoke & Tendo Advocates & Legal Consultants. The Defendant filed written submissions within the time as directed by the court and I have considered them. The Plaintiff has filed long after the Defendant had filed submissions.

# Issues:

- $7.$ The agreed issues for resolution are as follows: - $\mathbf{I}$ . Whether court has jurisdiction to entertain the matter - $\mathrm{II}.$ Whether the suit was filed against the right party - $\mathbf{H}$ Whether the suit is time-barred. - $IV.$ Whether the Defendant is liable for breach of contract - $\mathbf{V}_{\cdot}$ Whether the Defendant fraudulently dealt with the Plaintiff's property - VI. Whether the Defendant is indebted to the Plaintiff for sums claimed

VII. What remedies are available to the parties?

## Evidence

At the hearing, the Plaintiff called one witness, Amacha 8. Geofrey (PW) the Director of the Plaintiff Company. The Defendant called one witness Eunice Katakanya Karugonio. (DW), the Uganda Business Manager of the Defendant.

# Resolution:

Issue I: Whether court has jurisdiction to entertain the matter

- 9. Counsel for the Defendant submitted that under clause 29(1) of the terms of the bill of lading the claims arising shall be heard solely in the High Court of London to the exclusion of any other forum. He further stated that the Plaintiff and the shipping line were bound by the terms of the bill of lading and that the dispute that required court intervention would be filed in the High Court of London, England. Counsel stated that the suit was filed in the wrong court with no jurisdiction to entertain the matter and as such should be dismissed. - 10. According to **The Black's Law Dictionary 8th Edition** page 2490 Jurisdiction means "A court's power to decide a case or issue a decree" - 11. Under Order 9 rule 3 (1) of the Civil Procedure Rules where a Defendant is challenging jurisdiction of court, an application to challenge jurisdiction should be made within the period for filing the written statement of defence. Under Order 9 rule 6 where no application challenging jurisdiction has been made the filing of the defence will be treated as submitting to jurisdiction. I note that the issue of jurisdiction was not raised in the written statement of defence. - 12. In this case, the Defendant did not file an application challenging the jurisdiction of this court as required under

$\mathcal{R}$

Order 9 Rule 3 $(1)$ . Therefore, the Defendant by filing a defence submitted to the jurisdiction of this court.

$\mathcal{L} \subset \mathcal{L}$

# *Issue II: Whether the suit was filed against the right party*

- 13. Counsel for the Defendant submitted that the suit is defective for having been brought against an agent of a disclosed principal. Counsel cited the case of *Obuntu Consulting Limited* Versus Plan Build Technical Services Limited HCCS No. 173 of 2014 to support the submission. - 14. Counsel for the Defendant submitted that the Plaintiff knew the principal and was fully aware that the Defendant was only an agent but went ahead to sue it. Counsel stated that the Defendant is just an agent of a disclosed principal and cannot be held liable for the monies claimed. He further referred to exhibit PE4 as proof that the Defendant is just an agent and should not be held liable. - 15. It should be noted that there is no evidence on record of a contract between the Plaintiff and the Defendant. What is on record is the bill of lading and the parties on it are the Plaintiff who is the consignee, Nanhai Shum Tang Import and Export Co. Ltd. the shipper and Evergreen Line the shipping line/carrier. The Defendant does not appear anywhere on the bill of lading. - 16. The question then is whether the Defendant is an agent of the Evergreen Line. According to **The Black's Law Dictionary, 8th Edition** page 190 agency is defined as "A fiduciary relationship created by express or implied contract or by law, in which one party (the agent) may act on behalf of another party (the principal) and bind that other party by words or actions." - 17. PW under paragraph 6 of his witness statement stated that: "I was now supposed to pay Evergreen Shipping Co. Ltd since they were the ones shipping my goods...." Under paragraph 10 he stated: "I went to their [the Defendant] offices as directed and met a lady called Eunice Katakanya Karugonjo who

introduced herself as the manager of Gulf Badr Group (U) Ltd. the agent to Evergreen".

- 18. On 3rd April 2019, PW wrote a letter to the Manager, Evergreen requesting for a waiver on demurrage charges (See DE 9). - 19. Under DE 3, are emails exchanged between the Plaintiff, Defendant and Evergreen Line. In the first email dated 12th April 2019, DW wrote to a one Berry Haung, the subject of the email was "DEMURRAGE WAIVER/MESCO LIMITED..". In the email she informs him that the consignee is struggling with bank loan and requests him to look into the matter with "unconditional compassion" and she also informs him that he is ready to pay USD 5,000. She signs off as "Uganda Business" Manager, Gulf Badru Group (Uganda) Ltd, As Agents of Evergreen Line." - 20. Berry replied on 16th April 2019 and proposed a discount of "50% off on BT to solve this unclaimed cargo." On the same date, DW wrote to PW and informed him that he had been granted a waiver for the shipment. She then requests him to "let us know when it will be possible to return the containers to the shipping line so we can calculate the current demurrage." - 21. From the Plaintiff testimony and the above email trail, it seems clear that the Defendant was only an agent of the Evergreen Line and the Plaintiff was aware of this fact. - 22. I also note that the demand notice (PE 13) is addressed to The Kenya Ports Authority and Evergreen Shipping Line. In that letter, the Plaintiff's lawyers state that the Plaintiff applied for a waiver on demurrage to Evergreen Shipping Line. - 23. In the case of Montgomerie Vs United Kingdom Mutual Steamship Association (1891) 1 QB 370 at 371, it was held as follows:

The general rule is that where an agent makes a contract on behalf of his principal, the contract is that of the principal not that of the agent, and prima facie at common law the only

person who can sue is the principal and the only person who can be sued is the principal.

$\mathcal{L} \rightarrow \mathcal{L}$

24. In the case of **Re Lendy Ltd and another company (in** administration) Webb and others $v$ Taylor (as $\mathbf{a}$ representative respondent on behalf of the Model 2 Investors and Model 2 Transferees) and others [2021] All **ER (D) 59** it was held that:

*The general position is that the contract is that of the principal* and only the principal can sue or be sued, but that this general position may be displaced if, having regard to the nature and terms of the contract and the surrounding circumstances, the intention of the parties is different. If the agent signs a contract as agent, they are deemed not to have contracted personally unless it is plain from other terms of the contract that the agent is to be bound by it, in which event, the agent may be taken to contract both as agent and principal.

- 25. In the present case, there is no contract between the Plaintiff and the Defendant. The Bill of Lading only indicated Evergreen Line as the shipper. The Defendant does not feature anywhere on the Bill of Lading. Much as there was communication between the Plaintiff and the Defendant it is clear that the Defendant was only acting as the agent of the carrier. Evergreen Line. From the above authorities where an agent is acting on behalf of the principal it is the principal who is liable. - 26. I, therefore, find that the Plaintiff sued the wrong party. The suit is therefore dismissed with costs to the Defendant.

# Dated this 21st day of October 2024

Patricia Kahigi Asiimwe

Judge **Delivered on ECCMIS**