This advice addresses the legal position of Car & General Motors Limited (hereafter ‘the Company’) regarding its claim against the Ministry of Education & Sports (the Ministry) for an outstanding balance of USD 800,000 for the supply of vehicles. It will consider the appropriate parties to sue, the effect of the arbitration clause, and the correct legal procedure to follow.
1. The Propriety of the Intended Action
The Company’s intended action is to sue the Ministry, its Permanent Secretary (PS), and SPK Protectorate Limited (SPK) to recover the debt. The viability of this action depends on identifying the correct parties and the substantive legal basis of the claim.
a) Liability for the Outstanding Balance
The central issue is who bears the loss for the two stolen vehicles. Under the Sale of Goods and Supply of Services Act 2017, risk of loss generally passes with the property in the goods, unless otherwise agreed (s.25). Property in specific goods, such as the vehicles in question, passes from the seller to the buyer when the parties intend it to pass (s.22).
Here, the contract was for the supply of specific vehicles. The Company delivered all 20 vehicles to the Ministry’s designated yard in July 2019, and the Ministry’s PS proceeded to distribute them. These actions strongly indicate that delivery was completed and the goods were accepted by the Ministry. It is therefore very likely that a Ugandan court would find that both property in the vehicles and the associated risk had passed to the Ministry upon delivery. Consequently, the subsequent theft of two vehicles is a loss that must be borne by the Ministry. The Ministry’s contention that SPK is responsible is an issue between the Ministry and its security contractor; it does not negate the Ministry’s contractual obligation to pay the full price to the Company.
b) Identifying the Correct Defendant
The Company intends to sue the Ministry, the PS, and SPK.
**The Ministry and the PS**: Under Ugandan law, legal proceedings by or against the Government are brought against the Attorney General. Section 10 of the Government Proceedings Act (Cap 77) provides that civil proceedings by or against the Government shall be instituted by or against the Attorney General. Therefore, the Company cannot sue the Ministry directly, nor can it sue the PS in his or her official capacity. The PS is an agent of the government and is not personally liable for contracts entered into on behalf of the Ministry. The correct defendant for the contractual claim is the Attorney General of Uganda.
**SPK Protectorate Limited**: The Company has no contract with SPK. The legal principle of privity of contract means that only parties to a contract can sue or be sued on it (see *Kayanja v New India Assurance Co Ltd* [1968] EA 295). Therefore, the Company cannot sue SPK for breach of contract. While a separate claim in the tort of negligence against SPK might be possible, it would be more difficult to prove and is not the most direct route to recovery. The strongest and most direct claim is in contract against the Government for the price of the goods.
c) The Arbitration Clause
The contract contains a clause referring disputes “relating to description and quality of vehicles” to arbitration under the Arbitration and Conciliation Act (Cap 4). The current dispute is about non-payment for goods lost after delivery, not their description or quality. A court is likely to interpret this clause narrowly. As the dispute does not concern the description or quality of the vehicles, it falls outside the scope of the arbitration clause. Therefore, the Company is entitled to pursue its claim through the courts. Should the Government try to rely on this clause, a court would likely find it inapplicable to the present facts and refuse to stay the proceedings in favour of arbitration.
2. Relevant Procedure for Suing the Government
Suing the Government in Uganda requires compliance with a mandatory pre-action procedure. Section 2(1) of the Civil Procedure and Limitation (Miscellaneous Provisions) Act (Cap 72) prohibits the institution of a suit against the Government without first serving a written notice of intention to sue upon the Attorney General. This notice must be served at least forty-five (45) days before the suit is filed.
Namuswe’s email to the parties about the intention to sue is unlikely to satisfy this requirement. The notice must be a formal document, containing specific details about the claim, and must be properly served on the Attorney General’s chambers. Failure to serve a valid statutory notice is fatal to a claim against the government, as the courts have consistently held that this requirement is mandatory (see *Wambugu v Attorney General* [1972] EA 296).
3. Conclusion and Recommendations
1. The Company has a strong substantive claim against the Ministry for the unpaid balance of USD 800,000, as risk for the vehicles had likely passed to the Ministry upon delivery.
2. The intended action should not be brought against the Ministry, the PS, or SPK. The proper defendant is the Attorney General of Uganda.
3. The arbitration clause is unlikely to prevent court proceedings as the dispute does not relate to the description or quality of the vehicles.
4. Crucially, before filing any suit, the Company must instruct its lawyers to prepare and formally serve a 45-day statutory notice of intention to sue upon the Attorney General.
5. After the expiry of the 45-day notice period without payment, the Company may then institute a civil suit against the Attorney General to recover the outstanding balance, interest, general damages for breach of contract, and the costs of the suit.
References
**Cases**
* *Kayanja v New India Assurance Co Ltd* [1968] EA 295
* *Wambugu v Attorney General* [1972] EA 296
**Legislation**
* Arbitration and Conciliation Act (Cap 4)
* Civil Procedure and Limitation (Miscellaneous Provisions) Act (Cap 72)
* Government Proceedings Act (Cap 77)
* Sale of Goods and Supply of Services Act 2017
