[1999] UGCA 57

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA **HOLDEN AT KAMPALA**

## **CORAM: HON. MR. JUSTICE G. M. OKELLO, J. A.;** HON. LADY JUSTICE A. E. MPAGI-BAHIGEINE, J. A.; HON. MR. JUSTICE S. G. ENGWAU, J. A.

## CIVIL APPEAL NO. 18 OF 1998

## **BETWEEN**

#### NON-PERFORMING ASSETS\NPART:::::::::::::::::::::APPELLANT **RECOVERY TRUST** }

## AND

#### } :::::::::::::::::::::::::::::::::::: AMEN ECONOMIC STONE QUARY CO. LTD.

(Appeal arising from the decision of the **Non-Performing Assets Recovery Tribunal** (Mr. Justice Tsekooko JSA, (Chairman) Mr. Lule and Mr. O'Bokk members) at Kampala Dated 12^th April, 1998 in Tribunal Case No. 021 of 1996).

## JUDGMENT OF THE COURT

This is an appeal against the decision of the Non-Performing Assets Recovery Tribunal (Mr. Justice Tsekooko, JSA (Chairman), Mr. Lule and Mr. O'Bokk members) given at Kampala on the 17^th April 1998 in the Tribunal Case No. 021 of 1996, whereby the Tribunal allowed the respondent's claim in respect of the disputed stone crushing machine but dismissed its claim in respect of the Tata Lony. It ordered two third of the costs ofthe case to the respondent with one third in favour ofthe appellant.

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Amen Economic stone Quarry co. Ltd. (AESe) hereinafter referred to as the respondent, had applied to UCB for and obtained a loan under the world Bank IDA Project 1248 UG(part)SSI. The purpose of the loan was to rehabrlitate the respondent's stone quarry at Soroti. The respondent wanted for this purpose, to import a Mobile parker Hunter Stone crushing Machine from U. K. It obtained frorn Roko Technical Services a pro-Forma Invoice dared17l3l89 (Ex P2(a) forthe Machine and attached it to its application for the loan. The loan ofUS\$l10,000 was approved for the respondent. For purpose of purchasing the iterns required, that amount was detailed as follows:-

- [a] US\$60,000 for importing the said parker Hunter Stone Crushing Machine from U. K C.l. F. Kampala. - tb] US\$30,000 to import a Tata Lorry from India C.l. F. Kampala. - [c] US\$6,000 to import auxiliary equipments to be imported together with the Stone Crushing Machine. - tdl US\$6,000 for carrying out civil works at the quarry works site and renovation of

office and Go-down.

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# [e] US\$5,000 for importation of spares for the said Parker Stone Crushing Machine.

The respondent accepted the loan offer with the conditions set out in the letter (Exh. P3) giving hirn the loan. To the pro-Forma Invoice was annexed ^adocument showing pictures of the parker Rock Cmshing unit and different units and how these units operate.

It was stated that the cost of the U. K Machine which the respondent wanted had increased to more than the loan which UCB had approved for the respondent. At this stage, Mr. S. J. Nyanzi (DWl) recommended to the respondent a Greek supplier. Mr. philipo Opio (pWl) and Managing Director of the respondent, did not want to irnport from the Greek supplier and insisted that he wanted a docurnent sirnilar to Exh p2(a) showing him the appearance of the Machine and how it operated before he could decide whether to opt for it or not. No catalogue was provided to him, so later that morning, the disappointed Philip Opio retumed to Soroti.

After Philipo opio had left for Soroti, Nyanzi invited Kedi opio to his office and persuaded him to sign for the importation from the Greek supplier. He handed to Kedi a large paper Exh.p4 (e) from the Ministry of commerce, He also informed Kedi that the loan facirity offered to them would expire by the 3016190. After reading that large paper from the Ministry of commerce, Kedi opio concluded that the Greek Machine was more or less like the U. K one so he signed for the importation of the Greek Machine. He signed in as

his father's name of Philipo opio. The Letters of credit (LCs) Exhibit p2 (a) were opened ol 718190 starting the importation process. In the meantime Mr, Philipo opio was not made aware of the change to the Greek Machine.

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The Tata Lony was delivered to the respondent who accepted it. when the Stone crushing Machine arrived, philip opio viewed it and found it unfit. The respondent therefore refi.rsed to accept it.

wren the respondent subsequently failed to service the loan, UCB notified it of the default and later transferred the loans to Non-performing Assets Recovery Trust (hereinafter referred to as the appellant). The total balance on the Loan transferred was Shs.173,683,60g/:

The respondent later wrote to the appellant offering repayment proposal that might be acceptable to both parties when no satisfactory repayment arrangement was reached behveen the parties, the appellant instructed auctioneers which impounded the respondent's lorry in a bid to recover the debt that was owing. The respondent reacted by instituting this suit before the Tribunal. In paragraph 3 of it's re-amended praint, the respondent claimed inter alia for:-

> [a] a declaratron that there is a liaudulent misstatement or a fundamental mistake as to the subject matter of the loan granted by the defendant to the plaintiff under the loan agreement dated lOl4/90 and that there

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was a fraudulent alteration of the order and the irnportation by the UCB of the Stone Cmshing Machine required by the Plaintiff and therefore the loan agreement is still null and void and unenforceable,

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- tbl a declaration that the defendant is guilty ofa breach of contract, coercion, duress or undue influence, Ilaud, misrepresentation, deceit or negligence and therefore the Plaintiff is legally or equitably entitled to repudiate, rescind, terminate, revoke, cancel or avoid the plaintiff ^s obligation under the sard loan agreement and claim damages against the defendant, - [c] a declaration that the Plaintiffhas not fully utilised the loan granted under the said loan agreement dated I 0/4/90, - tdl a declaration that the Plaintiff is not liable to repay the loan debt as calculated and to the extent claimed by the defendant which is unjustified and./or exaggerated and should be ascertained, altered or adjusted as to include only the item for which there is proof of disburse\_ ment to the Plaintiff

- ["] discharge or reschedule the payment ofthe outstanding loan debt, - tfl an order ofpermanent injunction,

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tg] aggravated, exemplary, special and general damages for breach of contract, fraud, misrepresentation, unlawful seizure, detinue and./or conversion incidental and consequential.,,

The appellant denied the respondent's claim. At the trial, the following issues were framed:-

- (2) (a) whether the statement of the amount of the original loan is correct. - (b) If so, whether the statement of the loan amount as being US\$l10,000 instead of US\$ I 07,000 was fraudulent. - (3) (a) Whether after the Plaintiff has accepted the loan offer, the defendant represented to the Plaintiff that it was importing for the Plaintiff - Parker Hunter Stone Cnrshing Machine made in England.

(b) Ifso whether there was a breach ofcontract on the part of the Plaintiff in respect of the said representation when instead ofthe parker Hunter Stone Crusher from England, a Stone Crusher from Greece was imported.

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- (4) (a) Whether the importation of the Greek Crusher Machrne was caused by the fraudulent inducement ofthe defendant - (b) Whether the importation of the Greek Machine was occasioned by undue influence exerted by the defendant on the Plaintiff. - (s) (a) Whether the defendant was responsible for assessing quality, weight, make and specification of the Greek Crusher and its accessories? - (b) Ifso, whether the defendant owed a duty to the Plaintiff to ensure the goods of the plaintiff were conforming to the orders? - (6) (a) Whether the Plaintiff is liable to pay the purchase price for the irnportation of the Greek Stone Crusher and its accessories

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plus expenses relating to the said Stone Crusher and interest of the loan granted for the Machine.

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- (b) Whether the Plaintiff or the defendant tl was obliged to take necessary early steps to mitigate the loss arising from the delivery ofthe unsuitable Stone Crusher and deficient cargo? - (7) (a) Wrether there was delay to irnport the Tata Lorry - (b) Whether the delay was due to the negligence ofthe defendant

If so, whether the delay so occasioned, justifies the postponement ofthe date of repayment of the original loan granted to the Plaintiff for the importation of the Tata Lorry."

The Tribunal answered issue Nos 2,3,(a and b),4a,6 (a and b) and 7 (a, b, and c) in the negative. It answered issues Nos 4 (b), and 5(a and b) in the affirmative.

The appellant who was dissatisfied with the above decision of the Tribunal, now appealed to this court on the following grounds:- - a tl I The Tribunal erred in law and in fact when it answered issue No. 4 (b) in the affirmative. - t2l In answering issue No.5 in the affirmative, the tribunal erred and also erred in holding that:- - (a) "We think that UCB through DWI acted recklessly when DWI recommended the Plaintiff to the Greek man. We do not believe that on the evidence available DWI had well researched or well founded reasons for pressuring PW3 into accepting the Greek supplier." - (b) "ln our view UCB does not appear to have serious in handling the importation in this case, DWI and Kasozi Mulindwa should have ensured that the Plaintiffgot the best possible Machine. "

And further in answering "both legs of issues 5 in the affirmative

t3l The Tribunal erred in holding that: "Because of the conclusions we have reached on issue 5 we must answer issue No. 6 (a) in the negative. It is UCB which messed up the Plaintiff. If the price for the British Parker Machine had gone up, UCB should have advised the Plaintiffthat the loan money was inadequate. PWI appears to have been prepared for that."

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- t4l The Tribunal ened in law and in fact in holding that the Plaintiff was not on the facts obliged to incur extra costs to mitigate loss and that "UCB and therefore the defendant had the capacity to mitigate the loss." - t5l Even if the Tribunal is held to have rightly answered issue No. 4 (b), 5 and 6 (a), it nevertheless erred in holding that Uganda Commercial Bank thereby caused the loss which the Plaintiff suffered and that the defendant is liable therefor. - (6) The Tribunal erred in law and in fact in its evaluation of the evidence and, in particular, in accepting as true, obvious lies and concocted evidence given by Plaintifls witnesses.

There is also a notice of cross appeal and affirrnation of the decision of the Tribunal. We shall first consider the grounds of the main appeal, then the

cross appeal and affirmation of the decision of the Tribunal later. counsel for both parties put in written submissions.

On ground l, Dr. Byamugisha, learned counsel for the appellant, criticised the Tribunal for having held that the importation of the Greek Machine was occasioned by undue influence exerted by the defendant on the plaintiff. His reason was that both Philip Opio (PWl) and Kedi Opio (pW3) declined any persuation or influence by Nyanzi (DWl) to accept the Greek supplier. Learned counsel contended that Kedi opio's subsequent change of mind to sign for the importation of the Greek Machine was because:-

- (a) Exh, P4 (e) had convinced him that the Greek Machine was more or less like a Parker. - (b) greed and,

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(c) that unless he signed the loan on that day, the "owners of the loan money would stop lending by the 30/6/90 "

Dr. Byamugisha argued that although he had known that Kedi Opio had signed for the Greek Machine, Philip Opio did not protest. Instead, he acquiesced it. Therefore it was wrong to hold that the importation of the Greek Machine was occasioned by the influence of the appellant on the respondent.

We have perused the evidence on record as it is our duty, as a first appellate court, to do. From the record, Kedi Opio (PW3) not being a technician, was the least conversant with the type of Machinery they wanted compared to his father Philip Opio (PWl). Wren Philip Opio refused to sigr for the importation of the Greek Machine for want of its catalogue and disappointedly returned to Soroti, Nyanzi (DWl) sent for Kedi Opio who resided in Kampala in the afternoon of that day. In his office, Nyanzi sweet talked Kedi. He told Kedi how he had worked so hard to get them, the people of Soroti, the loan and was disappointed that they refused to honour hirn by signing the form which Philip Opio had declined to sign. He further told Kedi that Philip was old and that the ball was in Kedi's Court. If he wanted the loan and assistance, he should sign the form When Kedi repeated his father's demand for a Pro-forma Invoice and Catalogue for the Greek Machine before he could sign the form, Nyanzr asked Kedi to trust him even though he was not Kedi's brother. He promised that Kedi would be the happiest if he signed the Form.

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Nyanzi denied persuading or pressurising Kedi but the Tribunal believed Kedi This is a question ofcredibility and we have not been persuaded that the trial Tribunal was wrong in believing Kedi

Those words of Nyanzi could not have been taken lightly by Kedi in light of the fact that the Bank was also doing consultancy. Nyanzi himself testified that "Uganda Commercial Bank also does consultancy for its customers by advising and guiding them so that UCB's original plan is not derailed. By asking Kedi to trust him even though he was not Kedi's brother and his promise that Kedi would be the happiest if he signed the Form, Nyanzi was

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clearly exerting undue influence on Kedi. He was pressurising him not to insist on his demand for the catalogue

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Exh. P4 (e) which Dr. Byamugisha contends convinced Kedi that the Greek Machine was more or less like the Parker Machine and thus led him to sign for it, was not the demanded catalogue nor a Pro-Forma Invoice. It was merely a Format Form from Taxation Department and Industrial Promotion Department in the Ministry of Finance. It could not show to Kedi the particulars of the Machine and how it operated to convince him as to the suitability of the Machine.

In our view, Nyanzi's insistence that Kedi signed for the Greek Machine despite the absence of the needed catalogue showing the particulars of the Machine and how it operated was undue influence. Hrs handing to Kedi a duly filled Exh. P4 (e) was a ploy aimed at influencing him as to the suitability of the Greek Machine. Further, Nyanzi's emphasis on the expiry date of the Loan facility to Kedi was geared to adding weight to the influence on him to accept the Greek supplier. We do not agree with Dr. Byarnugisha that Kedi was prompted by greed and satisfaction of the suitability of Greek Machine to accept the Greek supplier.

We are satisfied that on the evidence, the Tribunal was justified in its finding as it did in issue No.4 (b). Ground I therefore must fail.

As to ground 2, the appellant complained against the Tribunal's finding in the affirmative in both legs of issues No. 5. On this issue, the Tribunal found (a) that the appellant was responsible for assuring the quality, weight,

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make, and specification of the Greek Crusher and accessories imported; (b) that the appellant owed a duty to the respondent to ensure that the goods were conforming to the order. The reason given by Dr. Byamugisha for this cornplaint was that no evidence was led as to responsibility of the appellant for assuring quality, weight, make or specifications of the Machine or accessories. Nor was any evidence led as to the duty owed by the appellant to the respondent to ensure that the goods were conforming to orders. Dr. Bnyamugisha submitted that he made subrnission to this effect at the trial but that the Tribunal ignored it.

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In Counsel's view, the application for purchasing Foreign Currency Exh. P4 (a) which the respondent signed contained Instructions to Importers. These Instructions are issued under regulation 7 of the Bank of Uganda (Preshipment Inspection of Imports) Regulations No.90 of 1982. Under these Regulations, Bank of Uganda instructed SGS to do the pre-shipment inspection of the goods ordered by the respondent and to submit a clean Report of Finding thereon. According to Dr. Byarnugisha, SGS submitted ^a clean Report of Finding on the Machine ordered by the respondent. He further contended that all the shipping documents (Marine Insurance Policy Exh. D4, Invoice frorn the supplier Exh. Pl0, Packing list Exh. Pl l) tallied with the Pro-Forma Invoice Exh. Dl (a). Even the Bill of ladding Exh. D6, acknowledged the Plaintiff s Machine (in the largest box of it) and within the same box stated that it was shipped clean on Board. Counsel's argument was that if despite SGS "Clean report of finding" and the shipping documents which tallied with the Pro-forma Invoice supported by the Bill of ladding, the Machine as ordered by the respondent did not arrive at Soroti, the appellant cannot be held responsible.

a ln United Citv Merchants (lnvestmerrtil Ltd Vs Roval Bank of Canada Il983l I AC 168 at 182. Lord Diolock observed that:-

> "------an international sale of goods transaction to be financed by means ofa confirmed irrevocable documentary credit involves four autonomous though inter connected contractual relations:-

- tll The underlying contract for the sale of goods, to which the only parties are the buyer and the seller, - l2l The contract between the buyer and the issuing bank under which the latter agrees to issue the credit and either itself or through a confirming Bank notifying the credit to the seller and make payments to or to the order of the seller (or to pay, accept or negotiate bills of exchange drawn by the seller) against presentation of stipulated documents and the buyer agrees to reimburse the issuing bank for payments made under the credit. For such reimbursement the stipulated documents, if they include a document of

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tittle such as a bill of ladding, constitute a security available to the issuing bank;

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- t3l if payment is to be made through ^a confirming bank, the contract between the issuing bank and the confirming bank authorising and requiring the latter to make such payments and to remit the stipulated documents to the issuing bank when they are received, the issuing bank in turn agreeing to reimburse the confirming bank for payrnents made under the credit; - t4l the contract between the confirming bank and the seller under which the confirming bank undertakes to pay to the seller (or to accept or negotiate without recourse to the drawer bills of exchange drawn by him) up to the amount of the credit against presentation of the stipulated documents."

That principle of the existence of autonomous but interconnected contractual relations between the buyer and the issuing bank, between the issuing bank and the confirrning bank and between the confirming bank and the seller, in international sale of goods financed by irrevocable Letters of Credit, is ^a legal principle with which we respectfully agree. Sales of good across the world are now transacted by means of confirmed credits.

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The instant case falls in this category. It is an international sale of goods financed by irrevocable Letters of Credit. Under the above principle, ^a contractual relation is created between the appellant as the issuing bank and the respondent as the buyer. That contractual relation places on the appellant a duty as the issuing bank, to ensure that the terms and conditions of the credit are met before paying the seller. In that regard, the appellant was under a duty to ensure that the stipulated documents, when presented, were consonant with the orders (Pro-Forma Invoice) before effecting payment to the seller. Under Instruction No. 6 at the back of Form ^E (Application To Purchase Foreign Currency) the stipulated documents in the instant case included, the SGS "Clean Report of Finding" and all relevant shipping documents. i.e. Bills of ladding, customs Bill of Entry; Certificate of Insurance; Settlement Invoice; relevant import Licence and post parcel wrappers where applicable.

On the evidence, it is clear that the appellant did not diligently discharge that duty:

> tl I The SGS Clean Report of Finding" Exh. D2 was not at all clean. The weight of the Machine it quoted as 2.780 Kgs did not agree with the expected weight of 4 Tons 291 Kgs., indicated in the Pro-Forma Invoice Exh. D I (a) against which the order was made.

t21 The Packing list Exh. D3 was also at variance with the Pro-Forma Invoice first as to the weight of the Machine and secondly as to the number of item to be packed. Pro-Forma Invoice indicated a list of 7 items but the Packing list omits item No.2.

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- t3l The Insurance Policy No.2 1858 dated ^2111190 (Exh. D4) referred to cormmercial consignrnent of Invoice No. 98 dated 25110190. Yet the Invoice in respect of the relevant consignment under the Pro-Forma Invoice was Invoice No.97 of 25l10/90 - t4l The Bill of ladding (Exh. D6) acknowledged shipment of only I piece of the weight of 2.780 Kgs. This was not in agreement with the Pro-Forma Invoice which quoted 3 pieces with a total weight of 4 Tons 291 Kgs.

In our view, had the appellant been diligent in discharging its duty under the contract, it would have detected the above discrepancies and would, as ^a prudent business agent, have withheld payment against those deficient documents. In that way, the respondent would have been saved losses.

For those reasons, we think that the Tribunal was right in answering both legs of issue No. 5 in the affirmative. Ground 2 rnust therefore also fail.

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Grounds 3, 4 and 5 were argued by Dr. Byamugisha together. We also propose to deal with them in that same manner.

Appellant's complaint in these grounds is directed to the finding of the Tribunal in issue No.6. Counsel criticised the Tribunal for answering both legs of issue No. 6 in the negative. Issue No.6 is (a) "whether the Plaintiff is liable to pay the purchase price for the importation of the Greek Stone Crusher and its accessories plus expenses relating to the said Stone Crusher and interest of the loan for the said Machine.

> tbl Whether the Plaintiff or the defendant was obliged to take necessary early steps to mitigate the loss arising from the delivery of the unsuitable Stone Crusher and deficient Cargo."

The Tribunal's reason for answering those questions in the negative was that it was UCB (appellant) which messed up the Plaintiff (respondent). Dr. Byamugisha argued that whatever UCB did was not the cause of the wrong rnaclrine being delivered to the respondent. We do not subscribe to that argument. We have shown when dealing with ground 2, that the appellant did not exercise due diligence in discharging its duty under the contract between it and the respondent. Had it done so, it would have detected the numerous defects not only in the SGS "Clean Report of Finding" but also in the relevant shipping documents and as a pnrdent business agent would have

withheld payment for the machine. That would have stopped delivery of the wrong Machine to the respondent. The respondent correctly sued the appellant for this wrong and not SGS because the respondent had contractual relation with the appellant. Appellant can seek indemnity elsewhere.

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We uphold the Tribunal's findings on both legs of issue No.6. Consequently, Grounds 3,4,and 5 must also fail.

We now turn to the cross-appeal. On ground I of the cross appeal, the respondent complained that the Tribunal was wrong in finding that there was no sufficient evidence to prove the appellant's fraud in stating a higher amount as the loan approved when there was ample circumstantial evidence. The amount of loan approved for the respondent was stated in various documents for example letter of loan offer Exh P3 and the Loan Credit Ledger Card Exh P23, as being US\$l10,000. The breakdown was as follows:-

| tll | Stone Crusher Machine | us\$60,000 | |-----|-----------------------|------------| | t2l | Tipper Lorry | us\$30,000 | | t3l | Auxiliary Equipments | us\$ 6,000 | | t4l | Civil work | us\$ 6,000 | | t5l | Spares | us\$ 5,000 |

The correct sub total of the above comes to US\$107,000 instead of US\$ ^I10,000. The appellant admitted the error as being merely typographical. However, Mr. Emesu, learned Counsel for the respondent, contended that that error could not have been typographical as it was

repeated by the appellant in various documents. ln his view, it was intended to defraud the respondent of the difference. We are unable to agree with that view. We could not find any evidence circumstantial or otherwise showing fraud on the part of the appellant. Mere repetition by the appellant of the error in several documents could not per se prove fiaud. Much more was required as the standard of proof of fiaud though not proof beyond reasonable doubt, is more than a mere balance of probabilities.

We tlnd no rnerit in this ground and it rnust fail

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As regards ground 2, Counsel for the respondent criticised the Tribunal for holding in issue No.7 that on the available evidence, the appellant was prima faciejustified to impound the respondent's lorry because the respondent had defaulted in servicing the loan for the lorry. In Counsel's view, there was evidence ofservicing ofthe loan which the Tribunal ignored.

The loan on the lorry stood at US\$ 29.700 (Exh.l7(a). There was also additional loan of US\$5,000 (Exh. Pl8) to cover import duty charges, Sales Tax and clearing/storage of the lorry. Interest rate on the additional loan was 36%o p.a, Exh. Pl9 shows that repayment of 9,730,3391: was made between 213192 and l0ll0l95. Thereafter the entire loan was treated as nonperforming because the loan on the lorry was not fully paid during the stipulated period which had expired The loan was then transferred to the appellant.

Ex. P20 showed a further repayment of 4 million shillings made between 31ll196 and 2612196 to the appellant. Despite these payments, the loan on this lorry which was an integral part of the whole loan, still remained outstanding when it should have been fully paid. Clearly, there was default in servicing the loan.

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In those circumstances, we cannot fault the Tribunal in its finding. This ground must also fail.

In ground 3, Counsel for the respondent criticised the Tribunal for answering in the negative the question, whether after the Plaintiffs acceptance of the loan offer, UCB represented to the Plaintiff that it was going to import for the Plaintiff a Parker Stone Crusher made in Britain. The Tribunal's reasons for that answer was that there was no evidence ofsuch representation.

Mr. Emesu contended that there was evidence of such representation which the Tribunal ignored. He argued that the acceptance by the respondent of the loan offer (Exh. P3) constituted a contract between the Parties in which the appellant would import for the respondent a Parker Stone Crusher from Britain.

We do not agree with that argument. The offer was to provide a loan of ^a specific amount for the purchase ofa Stone Crusher. Not for the purchase of a specific type of a Stone Crusher. Even if it were to be accepted that the Stone Crusher to be imported was to be a Parker Machine from Britain, the subsequent increase in the price of the Parker Machine frustrated that contract. We could find no evidence of representation as alleged, made by the appellant. We uphold the Tribunal's holding on this. Ground 3 must also fail.

In view of our holding in ground 3 above ground 4 must also fail. We have also adequately covered ground 5 of this cross appeal when dealing with ground I thereof. It must also fail.

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Grounds 6 andT disposed of under ground 2 of the rnain appeal. We found that the appellant was not diligent enough in its discharge of its duty under the contract between it and the respondent.

Finally we come to ground 8. It concerns award of costs. The respondent complained against the Tribunal's award of 70%o of the costs to the appellant and 30oh to the respondent. It was the respondent's contention, that it was the substantial winner at the trial and therefore should have been given ^a higher award of costs. In Counsel's view, the award given by the Tribunal was not fair.

At the trial the respondent's claim against the appellant in respect ofthe Tata Lorry was dismissed with costs. His claim against the appellant in respect of the stone Crushing Machine succeeded also with costs. The tribunal apportioned the costs at 213 in favour of the appellant and l/3 in favour of the respondent.

Award of costs is a matter of exercise of discretion of the trial court. It is trite law that appellate court can interfere with such exercise of discretion of the trial court only where it has acted on a wrong principle or where the award is made is manifestly low or high as to occasion a miscarriage of justice.

o In the instant case, it has not been shown that the Tribunal used a wrong principle to apportion the costs nor that the costs awarded to the respondent was manifestly low as to occasion a miscarriage ofjustice.

> In the result, we dismiss both the main and the cross appeal with costs. Costs are apportioned at 50o/o in favour of the appellant and 50% in favour ofthe respondent.

Dated at Karrpala this. 24tr day of .1999

f,.. l-^\* G. M. OKELLO

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JT]STIC PPEAL

L 4^-\_ .^-[ A E. MPAGI-BAHI . II]STICE OF APP NE L

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JUSTICE OF APPEAL