M.G Radia v Transocean (Uganda) Ltd

High Court, at Mombasa

November 6, 1975

Sheridan J

Civil Case No 409 of 1973

Contract – law applicable - action for breach of contract – where parties have not indicated the applicable law in the contract – power of the court to infer the intention of the parties - where the parties have failed to indicate the applicable law – presumptions in favour of lex loci contractus and lex loci solutionis – proper law to be applied.

Contract – breach of contract – damages for breach – wrongful dismissal.

The plaintiff was an employee of the defendant company in Mombasa, Kenya although the

 head office was situated in Kampala Uganda. The contract was to be performed in Mombasa where all sums due under it were to be paid, where the plaintiff worked.

The Uganda government introduced a new policy regarding persons of Asian origin thereby making the contract illegal and contrary to public policy in Uganda. As a result the plaintiffs contract was terminated and he sued for wrongful termination of employment in Kenya . One of the issues was which law was applicable in the case.

Held:

 1. In cases where the parties have not expressly stated the law applicable to it, in the contract, the court will infer the law which the parties ought to have intended to apply from the terms of the contract itself and the circumstances surrounding it.

2. The presumption in favor of lex loci contractus comes into operation if the place where the contract is made coincides with the place where it is performed but this presumption may be rebutted by a stronger presumption of lex loci solutionis.

 3. The proper law to be applied is that which the transaction has it’s closest and most real connexion in the absence of any term.

 4. The place and form of payment are of great importance and in this case it was Kenya and further more there was nothing to frustrate or render illegal the performance of the contract in Kenya.

 5. The applicable law being that of Kenya, under which the plaintiff’s employment was lawful and accordingly therefore the plaintiff was wrongfully dismissed.

Cases

 1. Karachi Gas Co Ltd v Issaq [1965] EA 42

2. Assunzione, The [1954] 1 All ER 278

3. Regazzoni v K C Sethia (1944) Ltd [1957] 3 All ER 286; [1958] AC 301

Texts

 Guest, A.G. et al. (Eds) (1968) Chitty on Contracts London:Sweet & Maxwell 23rd Edn p 836

 Statutes

1. Evidence Act (cap 80) section 98

2. The Immigration (Cancellation of Entry Permits and Certficate of Residence) Decree [Uganda]

Advocates

Mr. KK Cohan, instructed by Bryson, Inamdar & Bowyer, for the Plaintiff

Mr. JRO Masime, instructed by Masime & Kwach, for the Defendant