Saturday May 24 2014

Telecom firm, MTN loses case against shipping company


The case in which telecom giant, MTN Uganda Limited had sued a shipping company over alleged breach of contract in connection with the memorandum of understanding has been dismissed.

In 2012, MTN Uganda Limited had sued, Threeways Shipping Group for allegedly failing and or refusing to pay $3,827,820.71 the money which was contracted in the memorandum of understanding (MOU), general damages, interests and legal costs.

The MOU, according to court was signed between the two companies with a view of amicably resolving their disputes by way of reconciliation and the shipping firm had agreed to pay $4 million within six months.

However, through their lawyers, Threeways Group Limited challenged the MTN case on the argument that the MOU is illegal and unenforceable in law for contradicting with the Penal Code Act which gives powers to the state to prosecute criminal cases.

Justice Christopher Madrama of the Commercial Division held that a court of law cannot sanction that which is illegal and an illegality once brought to the attention of court would be dealt with irrespective of pleadings.

“I think illegality, once brought to the attention of court, overrides all questions of pleadings, and therefore this is and remains a real and indeed insuperable difficulty in the way of the defendant so far as the mercantile agency is concerned,” held the judge before ordering the case to be struck out with costs.

Court observed that the MOU violated the Penal Code Act in as far as abstinence of the complainant to pursue their case against the accused company, its directors and shareholders in order to help them prosecute MTN employees and former employees for charges of embezzlement, theft and causing financial loss.

The court decision results from an objection in which Threeways Group through their lawyers argued that the said MOU was signed due to pressure owing to the freezing of the bank accounts despite maintaining their innocence.

The MOU under controversy had been listed as MTN Uganda’s document to be relied on as evidence at the hearing of the breach of contract case.

However, MTN maintained that the objection alone could not dispose of the case without adducing evidence.

The case arises from questioned invoices in which it was alleged that the proprietors of Threeways Group colluded with MTN staff to siphon the company money.

Under the MOU was meant to among other issues, facilitate reconciliation as well as striking of an amicable resolution of in consideration for which MTN Uganda would immediately upon execution of the agreement persuade the Police and DPP to cause the unfreezing of the bank accounts for Threeways Group.