Special Damages

Kenlloyd Logistics (U) Ltd v Kalson Agrovet Concerns Ltd (CIVIL SUIT NO. 185 OF 2010) [2017] UGCOMMC 116 (28 September 2017);


Headnote and Holding: 

Plaintiff instituted proceedings for breach of contract, special damages, and general damages. Defendant denied any breach took place, and contended that the dispute ought to have been referred to an arbitrator. Defendant also instituted a counterclaim for breach of contract.

The defendant approached the plaintiff for assistance in carrying out a contract with BCEG (Rwanda), and entered into a memorandum of understanding that the profits after expenses would be divided. The defendant failed to pay plaintiff an outstanding amount of monies, or for expenses incurred. 

The issues for determination were whether the matter ought to have been referred to arbitration; whether the defendant breached the contract; and the remedies available to the parties.

Regarding issue one, the court stated that the matter could only be referred to arbitration in terms of the parties’ agreement if any of the parties applied to court for arbitration. Though an arbitration clause existed, no application was made to refer the matter to arbitration. The court could not invoke its inherent jurisdiction to refer the matter to arbitration without an application being made.

As regards issue two, the court found that the plaintiff proved that the defendant breached the contract. The defendant failed to deal specifically with the claims of the plaintiff, and instead provided blanket denials which the court held to be insufficient to disprove the plaintiff’s claims.

As regards the remedies available to the parties, the plaintiff failed to prove liability for special damages, but was entitled to general damages.


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