AKARERE KA GATSIBO v. V.CO LTD

AKARERE KA GATSIBO v. V.CO LTD

The Supreme Court held that each contract extension constituted a new contract for additional work and time, entitling V.CO Ltd to payment at the agreed monthly rate for the additional period. The fixed price clause applied only to the original 24-month period. Refusal to pay for additional work would unjustly enrich the applicant and violate the principle of good faith in contract execution. The Court recalculated the amount due based on the actual period of additional work performed.

Citation
RLR V.1-2025
Parties
Applicant: Akarere ka Gatsibo; Respondent: V.CO Ltd
Court
Supreme Court
Jurisdiction
Rwanda
Judgment Date
26 May 2023
Case Number
RS/INJUST/RCOM 00007/2022/SC
Procedural Posture
Commercial Contract Dispute / Supreme Court Review on Grounds of Injustice
Outcome
Applicant's claim for review on grounds of injustice dismissed; respondent entitled to payment for additional work.
Legal Topics
Contract Extensions, Payment for Additional Work, Interpretation of Contract Terms, Fixed Price Contracts, Public Procurement Procedures
Source Language
rw
Contract Law Public Procurement Contract Extensions Payment for Additional Work Interpretation of Contract Terms Fixed Price Contracts Public Procurement Procedures

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Parties

Akarere ka Gatsibo

Applicant

V.CO Ltd

Respondent

Procedural Posture

Commercial Contract Dispute / Supreme Court Review on Grounds of Injustice

Legal Issues

  1. 1 Whether V.CO Ltd is entitled to payment for additional work performed beyond the original contract period
  2. 2 Whether payment for additional work constitutes an impermissible change to the agreed contract price
  3. 3 Whether the contract extensions constituted new contracts or mere time extensions

Ratio Decidendi

The Supreme Court held that each contract extension constituted a new contract for additional work and time, entitling V.CO Ltd to payment at the agreed monthly rate for the additional period. The fixed price clause applied only to the original 24-month period. Refusal to pay for additional work would unjustly enrich the applicant and violate the principle of good faith in contract execution. The Court recalculated the amount due based on the actual period of additional work performed.

Court Disposition

Applicant's claim for review on grounds of injustice dismissed; respondent entitled to payment for additional work.

Orders

  • Akarere ka Gatsibo to pay V.CO Ltd 24,530,133 Frw for additional work performed beyond the original contract period.
  • Akarere ka Gatsibo to pay V.CO Ltd 300,000 Frw as litigation costs and 500,000 Frw as advocate's fees, totaling 800,000 Frw.