The High Court has ordered a logistics company Freight Reach Services TTC Dubai and its local agent to compensate Hidaya Holdings after it “misplaced” its goods during shipment from Dubai to Uganda.
In his ruling, Justice Collins Acellam ruled that the two freight companies breached a contract to transport goods belonging to Hidaya Holdings and were jointly responsible for the losses suffered by the Ugandan firm.
They were ordered to pay Hidaya Shs 25 million in special and general damages, together with interest and costs.
The dispute dates back to November 2013 when Hidaya Holdings Limited, a Kampala based trading company, bought goods worth Shs 57 million from suppliers in Dubai for resale during the Christmas season.
According to court records, Hidaya instructed its suppliers to deliver all the goods to Freight Reach Services TTC Dubai. On November 24, 2013, the parties entered into a contract for the carriage of the goods in a 40 foot container from Dubai to Mombasa and then on to Kampala.
The agreed transport fee was Shs 18 million, which Hidaya paid through Freight Reach Services Limited, the Ugandan branch and delivery agent of the Dubai company.
Because Hidaya’s goods did not fully fill the container, the freight company proposed adding oil lubricants to make full use of the space. Hidaya agreed to this arrangement.
The goods were expected to arrive in Mombasa by December 14, 2013 and in Kampala by December 18 or 19, in time for Christmas sales.
However, the shipment did not arrive as planned. Hidaya’s managing director only received a call on January 4, 2014, asking him to collect shipping documents and make further payments.
When he reviewed the documents, he discovered that the bill of lading had been changed and no longer included the oil lubricants. He later paid Shs 5 million in charges.
On January 13, 2014, the container was seized by the Uganda Revenue Authority (URA) for under declaration of goods. It remained under seizure for about five months.
When the goods were finally released, Hidaya discovered that items worth about Shs 38 million were missing.
Hidaya sued the freight companies in the Chief Magistrate’s Court at Mengo, accusing them of breaching the contract of carriage.
The company said the freight firms delayed delivery, altered shipping documents without consent, under declared goods to customs authorities and failed to deliver the full consignment.
In the amended plaint, Hidaya said these actions caused financial loss, inconvenience, demurrage charges, penalties on loans and loss of business reputation.
However, Freight Reach Services TTC Dubai and its local agent, Freight Reach Services Limited denied liability.
They argued that the bill of lading was conclusive proof that the goods were shipped as agreed and that once it was issued, their obligation was complete.
They also claimed that the Ugandan company was merely an agent and not a party to the main contract signed in Dubai. They denied knowledge of the oil lubricants and said they were not responsible for taxes or customs issues.
The magistrates court ruled in favour of Hidaya and ordered Freight Reach Services TTC Dubai and its local agent to pay.
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They appealed to the civil division of the High Court.
In their appeal, they accused the trial magistrate of wrongly finding breach of contract, wrongly holding both companies liable, and awarding damages without proper proof.
But Justice Acellam rejected all the grounds of appeal.
He found that there was a valid contract of carriage of goods between the parties, supported by a bill of lading and pre contract negotiations.
“There is existence of a bill of lading which is evidence of the existence of a contract of carriage of goods between the carrier and the shipper,” Justice Acellam said.
The court found clear evidence of delayed delivery, alteration of shipping documents, under declaration and loss of goods.
“This clearly indicates breach of the contract of carriage,” the judge said.
He also rejected the argument that the Ugandan company was not responsible, stating that a principal cannot escape liability by acting through an agent.
He agreed with the lower court that Hidaya had proved its losses.
“I have looked at the receipts presented by the respondent and they are indeed signed and stamped,” he said.
The court found that Hidaya suffered inconvenience and financial loss due to delayed delivery and missing goods.
Justice Acellam dismissed the appeal in its entirety, upheld the judgment of the Chief Magistrate’s Court and awarded costs of the appeal to Hidaya.
The decision means Freight Reach Services TTC Dubai and its local agent must pay Hidaya more than Shs 25 million, plus interest and costs, for the failed shipment that derailed the company’s Christmas business more than 10 years ago.
