10 2» 5 REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) * HIGH COURT CIVIL SUIT NO 332 OF 2014 OSUKURU RUBONGI LAND DEVELOPMENT ADVOCACY ORGANIZATION PLAINTIFF VERSUS UGANDA HUI NENG MINING L7D. 1" DEFENDANT GUANGZOU DONG SONG ENERGY GROUP CO LTD.. = 221.2 DEFENDANT BEFORE HON LADY JUSTICE ELIZABETH JANE ALIVIDZA JUDGEMENT Plaintiffs represented by Counsel Obiro Ekirapa Issac Defendants represented by Counsel Denis Kusasira Introduction ‘The Plaintiff Osukuru Rubongi Land Development Advocacy Organization Ltd (ORLDAO) sued the 1+ Defendant Uganda Hui Neng Mining Ltd and the 2? Defendant Guangzou Dong Song Energy Group Co. Ltd for breach of the memorandum of understanding executed between the Plaintiff and the 1*' Defendant on the 15" and 17% day of April 2013. The Plaintiff prayed that the Court declares the above Memorandum of understanding breached, an order of specific. performance; special general and aggravated damages, interest and costs of the suit, ‘The Defendants contended in summary that the Plaintiff’ actions and activities are based on grave underlying misrepresentations which \are calculated to extort money from the Defendants and unjustly’ enrich specific individuals and deprive the actual landowners of 30 Osukuru and Rubongi sub counties Tororo district from accessing adequate compensation for their land. The 1* Defendant also filed a counterclaim seeking refund of USD 150,000 it had given the Plaintiff plus interest and damages. The 2°# Defendant contended that the Plaintiff continued to interfere in :ts 3 mining operations and wanted the Court to issue a permanent injunction. In reply to the written statement of defence and counterclaim, the Plaintiff contended that LV Wei Dong is the majority shareholder in both the 1s and 2m Defendant and that attempts by the 2 42 Defendant to disassociate itself fram the actinns of the 1 Defendant amount to fraud and dishonesty. At trial, the Plaintiff prayed that the veil of corporation should be lifted. Background to the dispute in this case. ‘These facts are extracted from the pleading and submissions of the 45. parties. In 2008 the Plaintiff was registered as a Community Based Organization (CBO) and a Company Limited by Guarantee with the main objective of advocating for the rights of landowners in Tororo Osukura and Rubongi Sub-counties in the 14 villages where phosphates and other minerals deposits had been discovered so Also in 2008, in Mbale High Court Civil Suit 62/2008, the Plaintiff : AW —_—— _ aN55 0 and the Attorney General who were asserting that the land comprised in Block 5 Plot 72 Tororo county belonged to the government and not the lard owners. Nilefos’ Minerals Lid was. experiencing finaricial difficulties and had failed to compensate the land owners. Various mining companies were expressing interest in Block 5 Plot 72 as Nilefos Minerals Ltd's license was expiring. Then the Plaintiff entered into a memorandum of understanding with the 1* Defendant who agreed to negotiate with the land owners, meet costs of surveying and obtaining Freehold and Leasehold titles for Block 5 Plot 72, pey an annual corporate social responsibility fee of USD 200,000, give Jobs to residents of the area, build schools and hospitals and meet the Plaintif’s costs in HCCS-62 of 2008, 1* Defendant acting through Ms Fang Min negotiated with the Plaintiff. On 1/8/2013, 1* Defendant was issued with exploration license No 1178 Over Block 5 Plot 72. Later this license wes transferred to the 2 Defendant. Subsequently the memorandum of understanding was terminated ty the Defendants on grounds that the Plaintiff's lacked the consent of all the land owners among other reasons. “ne ao AN ‘There were no agreed facts between the parties. The agreed issues for Court's determination are that;s 90 98 1. Whether the Plaintiff had authority to act’on behalf of the landowners in the proposed mining area at the time of signing the memoranda of understanding 2; Whether the memoranda of understanding entered into between the Plaintiff and the 1 Defendant are valid and enforceable. 3. Whether the memoranda of understanding entered into between the Plaintiff and the I Defendant is binding on the sé Defendant. 4, Whether the Defendants breached the memorandum of understanding 5. Whether the parties are entitled to the remedies sought. ‘The Plaintiff produced the following wittneses, PW1; Kumama Nsamba George Wilson Surveyor, PW2 Erimat Kala Silvanus Chairman of the Plaintiff Company. PW3 Charles Kambiso Okolong, avaluer and PW4 Onyango Emokol Chairperson Tororo District Land Board. The Defence produced on witness DWI Kai Chen, former employee of the 1* Defendant. Counsel filed written submissions. I have taken into consideration the arguments raised. I shall not reproduce them here and will only highlight them where necessary. ‘The Defendants also raised preliminary issues which were more of en. afterthought and not among the main issues agreed upon during conferencing. ek100 105 ns Burden of proof This Court reminds itself of the burden of proof in civil cases. Generally thé burden of proof in civil cases rests on a balance of probabilities. Usually the burden lies on the Plaintiff to prove his or her case, Specifically I am reminded of Section 101 of the Evidence Act CAP 6 which provides that; (1) Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence which he or she asserts must prove that these facts exists. (2) When a person is bound to prove the existence of any fact, itis said that the burden of proof lies on that person. Moreso Section 103 of UEA provides that the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided-by the law that the proof of that fact shall lie on a particular person. According to G.D. Nokes, in An Introduction to EVIDENCE, Fourth Edition at page 489, it is stated that “in contested actions, that party succeeds whose evidence establishes a preponderance of probability, or balance of probabilities in his favour. One party may succeed on some issues, and the opposite party on other issues”. Therefore, each party wishing the Court to believe the existence of any fact must prove it on a balance of probabilThis court is also mindful of the fact that in commercial disputes, memory evidence by its very nature may not be as useful as documentary evidence about facts that happened years back. The weight attached to documentary evidence is higher. 125 This thinking was underscored in the case of Gestmin SGPS SA Vs Credit SUISSE (UK) Ltd and another (2013) EWHC 8560 (Comm) Leggatt J states; “In. the light of these circumstances, the best approach fora judge to adopt in the trial of a commercial case, in my view, to place little if any reliance at all on witness recollections of what 130 was said at meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose-though its utility is often disproportionate to its length. But ts value lies largely as Isee it, in the opportunity which cross examination 135 affords to subject the documentary record to critical scrutiny and to gauge the personality, motivation and working practice of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, itis important to avoid the fallacy of supposing that, because a witness has confidence in his or her 14 recollection and is honest, the evidence based on that recollection provides a reliable guide to the truth’. Evaluation of evidence ‘The formula for evaluating evidence was laid down in the case of ___ Abdu Ngobi V Uganda. S. _Appeal No 10 of 1992 wi 345__was held that ... “The evidence of the prosecution should be examined155 165 370 and weighed against the evidence of the defence so that a final decision is not taken until all the evidence has been considered. The Proper approach is to consider the strength and weakness of each side, weigh the evidence as a whole applying the burden of proof as always resting upon the prosecution and decide whether the defence has raised reasonable doubt”. 1am also aware of the fact that a Judicial Officer only makes fair ard Just decisions based on law and evidence. A judicial officer is prohibited from making judicial decisions based on fanciful theories, rumors, speculation and conjuncture (refer to Court of Appeal case Mbabazi Rovence Natukunda and Loyce Kahunda Vs Uganda. (Criminal Application Number 47 of 2012); where this trite law was re-emphasized. ‘Though these above principles refers to criminal cases, they also ‘equally apply to civil cases. Reference is also made to'the case of Ojera Joseph Vs Labeja Pirimino HCCA 20/2013 on principles of evaluation of evidence. Justice Mubira stated that “Whereas variations in the style of evaluation of evidence by a court are inevitable, assessment of evidence is an evaluation of its logical consistency, and this should be reflected in the judgment. The hallmarks of a good evaluation of evidence adduced in a civil trial are unmistakable. It should evince two key elements. (i a qualitative assessment of te truth and /or inherent sses where the veracity of probabilities of the evidence of the witni witnesses may be tested by reference to contemporaneous evidence tv 5 onthat does not deperid much upon human recollection, such as objective ‘facts proved independently of their testimony; (i) and secondly, an ascertainment of which of the two versions is more probable. The court will accept’ one“of the two versions which is supported by~ more 375 probative evidence and will reject the other version with less probative evidence to back.” I shall deal with the preliminary issued raised by Counsel for the Defendants before moving onto the main issues, Plaintiff's right to sue on behalf of the land owners. 180 Counsel for the Defendant argued that the Plaintiff should have sought leave of Court under Order 1 Rule § of the CPR to bring a representative action. However I note that this was a company suing and not individuals. Theretore in case of costs, it is not the 2600 land owners to pay but the Plaintiff as a corporate body. 185 I will also look at this issue strictly from a company law perspective ‘The Plaintiff was duly registered company limited by guarantee. This objection would be easily resolved if the Plaintiff was unincorporated. See Daudi Abdul Vs Ahmed Suleiman (1946) 3 EACA 54 which states that members for unincorporated entity must sue in their 280 personal names. However the Plaintiff’ s legal personality to sue or be sued has been proven since it is a corporate body registered under the Jaws of Uganda. fy195 200 205 20 as Enforcement of social contracts Counsel for the Defendant raised the issue of social contracts. not enforceable. That the Plaintiff sought specific performance for Promises meant to benefit the local communities. That social corporate responsibility clauses in the memorandums of understanding were promises of a social nature and were not intended to create contractual relationships enforceable by the landowners. However it is my opinion that social contracts are enforceable if Promises are made to induce another party to undertake aa obligation or give up a benefit. Otherwise there will be absence of good faith and “consensus ad idem” during contract formation. In this instant case, PW2 told Court that the landowners gave up their right to engage with any other investor. See Clause 7 of the MOUs, The Plaintiff undertook not to sign MOUs or contracts with any other party. DW1 also confirmed the fact that by the time this MOUs were signed, Nilefos Minerals Ltd had exploration license in that area which was up for renewal. Moreso, the landowners were giving up their land to the investor for mining and thus the inducement of social corporate responsibility benefits to the local community, ‘Therefore social contracts are enforceable depending on the nature of the contract and the circumstances of each case. Contracts that of an investment nature usually have social corporate responsibility220 ns 20 clauses. In this case I find that the social corporate responsibility clauses in the MOUs do not render this contact unenforceable. ‘Therefore the'preliminary objections are overruled. I will now go ahead to determine the main issues. Issue number One: Whether the Plaintiff had authority to act on behalf of the landowners in the proposed mining area at the time of signing the memoranda of understanding Counsel for the plaintiff highlighted the evidence produced at trial that indicated how the Plaintiff company was formed and that the members have consented in a meeting before the signing of the memorandum of understanding (MOU). Counsel for the Defendants submitted that there was no evidence proving that all land owners in Osukur and Rubongi sub-countries were members of the Plaintiff and even consented to the signing of” the MOU. In deciding this case, I am mindful of the fact that a party alleging a fact has to prove it but he who denies a fact need not prove it. The maxim “ei qui affirmat non ei_qui_negat incumbit probatio” applies. The evidence concerning the Plaintiff company was adduced by PW2, the Chairman. This was supported with documentary evidence which Iwill highlight below. - \ A\2s, 250 250 The undated Constitution of the Plaintiff company indicates the objectives of the Plaintiff company are land related including entering into joint ventures Article 3 of the Constitution on “Membership” of the Company indicates that it is ‘mandatory for all affected residents of the parishes of Osukuru and Kayoro in Osukuru Sub-country and Osia in Rubonyi Sub-country in Tororo”. Also on record is the memorandum and articles of association of the Plaintiff Company dated 14% March 2008. It mirrors the objectives of the constitution and is signed by 41 members from different zones. “According to PX2,7 the certificate of incorporation these company was incorporated on 14/3/2008 ‘The certificate of Registration as Community based organisation (CBO) marked PX1 indicates the following: “To safeguard the property tights and advocate for the development of land and communities of Osukuru and Kayoro Parishes in Osukuru Sub- country in Torore County and Osia Parish in Ruboni Sub-county in West Budama. County." Minutes of the Plaintiff meeting of St April 2013, Of interest to this issue is Minute 04/AGM/2013 PRESENTATIONS A: GENERAL SECRETARY: BACKGROUND OF ORLDAO. Iwill reproduce this in detail The general secretary informed the meeting that all of them were members of ORLDAO. A registry was opened to register all the member families by zone leaders elected curing the first AGH. The organisation started as a pressure group. This was due270 20 285 the fact that there wins a treat of land being grabbed. There ivas an existing organisation ORLDACO. However, there was a loophole in this organisation. People had been misled to sion ‘some forms that had identified them as squatters. The organisation was registered as a CBO at the distriet However the district authority was not supportive. The organisation therefore was registered with the Registrar of companies in Kampala. It was surprising that some district leaders began calling the organisation members saboteurs Resolutions ‘The present ORLDAO Executive was given mandate to continue until the present land titling and negotiations with investors is complete. Unfortunately I note that there is no registration 6f members who attended the said meeting, Also a key document is PX11, the memorandum of understanding between the Plaintiff and the 1*t Defendant. One of the first provisions is that ORLDAO represents the landowners of Osukuru and Rubongi” ‘Therefore the mandate of the Plaintiff is also highlighted in a similar MOU marked PX12 In my opinion, there was probable evidence that the Plaintiff had tke mandate to enter into the MOUs with the 1* Defendant. The onus BikI will examine the documents produced by the Defendants. 1. DXS letter dated 27/10/2013 from Abur community signed by chairperson local council and witnessed. It indicates that the Plaintiff was formed as,a CBO to “involve participatory decision, 255 making by community members”. Major complaint was about impersonation as representatives of entire communities, financial mismanagement and the issue of 10% on total ‘compensations. The letter informs the 1* Defendant that Abur community has created a cooperative society to represent its 300 interest. I note that this letter did not originate from the formed cooperative society but from part of the local council. Whether it represents the views of the whole Abur community is not clear. 2. DXS letter dated 15/3/2014 from the RDC to the President of sos Uganda. It mentions the Plaintiff as a CBO created to help and advocate for interests of land owners in mining area. That it was later transformed into a limited company without knowledge of the local populace. That it entered into agreement in the investor. 0 3. DX6 letter dated 21/9/2013 from Osukuru local leaders land Alliance Association to the I* Defendant. It complains of middlemen purporting to represent local stakeholders. It also questions some acts done by the Plaintiff and wanted more information on a number of issues. ss 4, DXT letter dated 25/9/2013 from Kintu Nteza Advocates to both the Plaintiff and 1: Defendant among others. It is writte \2s 240 on behalf of aggrieved residents of Osukuru. It questioned the Plaintiff's mandate to survey land and negotiate with the 1: Defendant and promised to take legal steps to protect rights of the aggrieved residents. It is accompanied by Revocation of authority letters from a number of residents. ‘There were also key documents that were titled “Revocation of Authority” (DX8, 9, 10, 12, 13, 14, 15, 16, and 17). It reads in part as follows; “...having granted authority by way of memorandum of understanding to ORLDAO Ltd of Totoro to do all acts vested therein in the said agreement on my behalf and in respect of my own described land... and having discovered that the said ORLDAO entered into 2n independent and parallel undertaking with Uganda Hui Neng mining Ltd which it was paid colossal sums of money and thus creating a conflict of interest in representing me. NOW DO HEREBY REVOKE formerly granted... ‘This indicates that the Plaintiff had been given authority to represent the residents. It was only later when it is alleged that they had received money that this authority was revoked. They were mostly in relation to the “consent agreements they had signed with the Plaintiff ORLDAO. ‘There were also the consent agreements (DX11 and 12) signed between the Plaintiff and residents but I note these came after the MOU and the main feature was to about the 10% of compensation A Gx commit nt.In conclusion, on a balance of probability, I find that the Plaintiff had the general authority to act on behalf of the landowners in dealings with intvestors at the time of signing of the MOUs. As to whether tke Plaintiff got specific consent of the landowners to sign the MOUs on x45 the terms and conditions therein, this evidence is lacking. Tke consent agreements alleged to have been signed with 99% of individual residents which were later revoked by some residents were entered into after signing the MOUs. ‘Therefore I find in the positive on the first issue. as0 Issue number Two: Whether the memoranda of understanding entered into between the Plaintiff and the 1" Defendant are valid and enforceable. What amounts to a valid contract? I note that a contract is a legally binding agreement enforceable under the law. There should be an 355 offer, acceptance, consideration, certainty and intention to create legal relations. ' Counsel for the Plaintiff submitted that both parties to the Memoranda are companies duly registered under the laws of Uganda with capacity to contract. That the subject matter of the Memoranda 360 of Understanding was lawful. That the Plaintiff undertook to assist the 1% Defendant to acquire a lease in the mining area and in return the 1st Defendant undertook to adequately pay the landowners for ail Jand that the 1* Defendant was to lease and also contribute towards \ A\\ L corporate social responsibility programs. w365 370 Counsel for the Plaintiff argue that the Plaintiff and the. I* Defendant also agreed that the amount at which each portion of land ‘was to be leased would be agreed upon jointly between the Plaintiff and the 1* Defendant. That the Plaintiff also undertook not to sign any Memorandum of Understanding or contract to assist other investors acquire surface rights in the mining area. Furthermore that there is no provision in the Mining Act or any other law that prohibits landowners from negotiating with persons who seek to acquire surface rights on their land Couinsel for the Defendant made a contrary argument. He submitted that the MOUs are not valid and binding on either of the Defendants because; The consideration provided by the Plaintiff of obstructing Nilefos Minerals from signing agreements with landowners, and carrying out an illegal land survey was illegal, and renders the agreements invalid and unenforceable; and that the agreements we:e procured by fraudulent misrepresentation that the Plaintif represented all the landowners in Osukuru and Rubongi sub- counties, Counsel for the Defendant also argued that the process of surveying done on behalf of the Plaintiffs was illegal and was carried out in contravention of the law. On this point, I am of the opinion that the performance of the contract is a different issue from validity of;tke "The main intention or objective ofthese MOUs was io ens al the 1 Defendant has access to surface rights from the landowners £0390 as to catry out their activities. As for the Plaintiff, it was to ensure that landowners land rights are protected by registering their interest, from elistomary holdings into freehold and ensuring that they receive fair and. adequate compensation as well as community benefits through’social corporate responsibility. 395 How these intentions were implemented through performance of the contract is not the issue here. The issue here is whether this was a valid and enforceable contract, 8. 10 (1) of the Contracts Act provides that a contract is an agreement made with the free consent of the parties with capacity :o 400 contract, and for a lawful consideration and with the lawful object, to be legally bound. In this particular case, the contract was made with the free consenit of the parties who appear to have the legal capacity to contract for a lawful consideration and object. a 405. in issue one that the Plaintiffs had implied authority to contract on re Se eerie ee a ee ee eee ee eee held by Holroyd Pearce L.J that; “It would be a novel extension for the ROSE ES nay a r 7as 220 ‘as grounds that in vertain events it turned out harshly for the parties who subsequently wished or were compelled by circumstances to abandon their contracts” In the same case, Harman L.J held that; “Similarly, rather deprecate the attempt to urge the Court on what are called equitable principles to dissolve contracts which are thought to be harsh or which should have turned out to be disadvantageous to one of the parties. The observation of Lord Nottingham in Maynard Vs Mosley (1679) 3 Swan at P. 655 is still true that the chancery mends no man’s bargain and I do not therefore see my wey to'call in aid equity to mend what may be an unfortunate situation and one which if it calls for a remedy, calls for aid by the legislature rather than by the judiciary” In the case of Stockloser ws. Johnsan 1984 1 ALL. BR 630 Rome LJ cited with approval Lord Nottingham’s famous maxim that “the Chancery mends no man's bargain” and observe that in the long runit is much better, that people who freely negotiate and conclude a contract should be held to their “bargain”, rather than the judges ‘should intervene by substituting each according to his individual sense of fairness, terms which are contrary to those which the parties have agreed upon for themsebes" According to Malsbury'e Laws of Bnglan, (Supra) Paragraph 702 “where a party has so conducted himself that a reasonable man would believe that he is nambiguousy asserting tote terms proposed by the other party the former is precluded fom seting up Nis re rl K : Ol40 480 intention and is bound by the Contract as if he had intended to agree to the other party's terms”, In the case of Smith Vs Hughes (1871) 6QB 547, Blackburn J opined: “T apprehend that if one of the parties intends to make a Contract on one set of terms and the other intends to make a Contract, on another set of terms, or as itis sometimes expressed, ifthe parties are not ad idem, there is no Contract, unless the circumstances are ‘such as to preclude one of the partes from denying that he has agreed to the terms of the other. The rule of law is stated in Freeman Vs Cooke 2 Bx At Page 663; 18 LJ (Bx) at Page 119; f, whatever a man's real intention be, he so conduets himself that a reasonable man would have belief that he was asserting to the terms proposed by the other party, and that other party upon belief enters into a contract with him, that man thus conducting himself would be equally bound as if he hed intended to agree to the other party's terms.” f ar A It is my finding that the MOUs were valid and enforceable. Therefore [find in the positive for issue two. Issue Number Three: Whether the memoranda of understanding entered into between the Plaintiff and the 1" Defendant is binding on the 2" Defendant. Counsel for the Plaintiff submitted that the 2 Defendant set up the 1 Defendant as a purpose driven vehicle to acquire the exploration license and contended that it is only fair that the 24 Defendant is w470 as 420 485 answerable and liable for the whatsoever the 1* Defendant committed itself to acquire a license for the 2=4 Defendant. Counsel for Defendant on the other hand submitted that the contract, cannot confer rights and obligations to third parties unless they are parties. That the 2%! Defendant is not party to the MOUs. It is my opinion that it is not a disputed fact that the 1* and 24 Defendant are two separate and distinct companies. It is also not a disputed fact that the MOUs were signed by the 1+ and not the 24 Defendant. It is also a fact that the 1* Defendant transferred its exploration license to the 2" company which eventually obtained the mining license, (See board resolution dated 12/12/2013 PX41) Ss er eee commissioner Department of Geological survey and minerals. (part re 2 K Tha sostnoporent fu evsid or th iwng: usa i of Guangzhou Dong Song Fnergy Group Co Ltd to serve as a vehicle through which Guangzhou Dong Song Energy Group Co Ltd wou'd undertake mineral development projects in Uganda. Furthermore That alter Uganda government had granted an exploration license ©Uganda Hui Neng mining Limited, Guangzhou Dong Song Energy Group Co Ltd executed a memorandum of Understanding with the 490 Uganda government’ committing USD 560,000,000 to develop mineral resources. The reason for transfer of the license to Guangzhou Dong Song Energy Group Co Ltd is also articulated in the letter. It states as follows” “the MoU was tabled before the shareholders of Guangzhou 495 Dong Song Energy Group Co Ltd for discussion and the shareholders advised that in order for such a huge amount of money to be spent by Guangzhou Dong Song Energy Group Co Lid, and to give effect to the ‘MoU, the Exploration license and all other successive mineral rights must be registered in the names of Guangzhou Dong Song Energy 500 Group Co Ltd...” In the above circumstances, can the 2»! defendant be bound by the actions of the 1 Defendant? It is my judginent thal yes the 2 Defendant is bound and is estopped by the nature of the relationship. Itis a principal and agent relationship. The 1* Defendant was acting 505 on behalf of the 2»! Defendant. This was a single economic unit and in taking over all the rights of the 1* Defendant by the 24 Defendant, they also look over all the liabilities. A Therefore I find in the positive on issue three. ( \ 510 HIssue Number Four: Whether the Defendants breached the memorandum of understanding. Section $1 of the Contract Act 2010 imposes obligations on the parties to perform their respective promises made under the contract. 515 Section 35 of the Contracts Act 2010 titled “Refusal of a party to perform. It provides as follows; “Where a party to a contract refuses or disables himself or herself from performing a promise in its entirety, the promise may put an end to the contract unless he or she signifies by word or conduct, to its continuance”. 520 Section 36 of the Contract Act also makes it mandatory to perform a promise once.it appears from the nature of a case that this was the intention ofthe parties. Breach of contract occurs when a party refuses or fails to perform as agreed 528 _D. J Bakibinga in the Law of Contract in Uganda, 2001, at page 167 states that .. “A Breach of contract occurs, when a party to a contract, without lauful excuse to perform the contract; a AK i Fails or refuses to perform the contract UA ii Performs defectively 510i Incapacitates himself rom performing the contract.” I note from both MOUs that the purpose was twofold. To enable the 1 Defendant. acquire a lease for the specified area to mine phosphates on obtaining licenses from government.The Plaintiff was _ to assist in several ways outlined in the MOUs as fong as the 1+335 sao 5s Defendant fairly and adequately compensates the land owners and also gives other listed obligations. ‘The evidence indicates that the purpose of the MOUs was not fulfilled in the most part, The 1* Defendant did obtain an exploration license from government and a mining license for specific area and obtained a lease over land belonging to 123 residents. The rest of the landowners never got individual land titles nor were they compensated for their land From the evidence of PW1 and PW2, the Plaintiff carried out mobilization and sénsitization of the landowners and residents, This enabled the 1" Defendant to have access to the area and reduce hostility to the investor. lA) Accorting oN Kai Chen, they pit each othe 2600 hoch UGX 1, 000,000. Also several other amounts were paid to the Plaintiff's lawyers, to the Plaintiff (ORLDAO), to politicians including the area MP and also PW1 was paid USD 800,000, The Valuer was also paid UGX 10,000,000. However, from the evidence, the community benefits obligations were never implemented. There was no evidence adduced to that effect From the analysis of the whole evidence. Both parties breached the agreements in the following ways. 1. The Defendants failed to honour some of their obligations and ‘erminated the MOUs. a2. The Plaintiff failed to honour the, commencement dates agresd upon in the contract. The 1** MOU commencement date was in 60 June 2013 -and the 2% MOU was after licence had been obtained. Instead the Plaintiff commissioned survey and valuation to start in May 2013. This amounted to breach of contract, 3. The Plaintiff commissioned the Surveyor (PW1) and the Valuer 65 (PW3) without the approval of the 1* Defendant. The Plaintiff negotiated fees and bound the 1* Defendant without their consent. If the consent was obtained, it was not evidenced by any documentation, 4. The agreement was that both parties surveyors and valuer 370 would cooperate and oversee the valuation process and devers done. The Plaintiffs experts worked in isolation. The Defendants ining the amount due t Ube landowners. This was sever also made their own valuation for the land they were interested in and paid the residents, The Plaintiff was not involved. 5755, From the evidence of PW4 chairperson of Tororo Land Board, application for 1000 titles for the landowners had been submitted for processing and the rest had not be submitted. 6. Later the Defendants also carried out its own survey and valuation. They did not involve the Plaintiff in the process. sso In conclusion, I find that in essence the agreements were breached by the conduct of both parties and other factors outside their control.Issue Number Five: Whether the parties are entitled to the remedies sought. 585..Lwill dispose of this issue in a summary manner. Since both parties were in breach, none, of the parties is entitled to any remedies outlined in the Plaintiif and Counterclaim, However, it is my judgment that this case would not have arisen if the Defendants had not summarily terminated the MOUs. The 580 Defendants cannot escape from some of the promises made under the MOUs just because it is not convenient. They used the Plaintift to ensure that they block out other investors and thus protecting their interests. This amounts to unfair trading to some extent. ‘The whole intention of the MOUs was to ensure that landowners 38 obtain title deeds for their land so as to get a fair and adequate compensation for their land from the investor who was interested in the surface rights. This was not achieved for most of the landowners ‘The Plaintiff exceeded its mandate and started acting arbitrary and entered into financial arrangements committing the 1* Defendant 600 without their express authority. Therefore they are not entitled to additional money to pay PW1 and PW3 and other expenses. The current circumstances and the previous conduct of the Defendants releases the landowners from any obligation to deal with the Defendants. They can negotiate with any other willing investor. 503 The Plaintiff can also seek a fresh mandate from the residents an negotiate with the Defendants or any other investor, B610 os Costs. : 1 award the Plaintiff costs as it is my discretion to do so, The reason is that this matter would not have come to Court if the parties had tried to sit down and-discuss. any disagreement and agreed to terminate the relationship amicable if it was impossible to work together. Arbitrary termination by a letter from the Defendant's Advocate went against the spirit of the whole purpose of the MOUs. ‘Therefore the Defendants should pay the Plaintiff costs for this su:t. Conclusion. ‘This case is dismissed but the Plaintiff is awarded costs for this suit. So ordered. Ake Sudge 25" July 2020. 26