The Observer (Kampala)

Uganda: Fedex, ICEA in Shs 1.2 Billion Law-Suit

Irene Muteteri says that in 1994, she received four art pieces from her German mother-in-law as a wedding gift.

The artworks were 18th century drawings by the prominent and classical painters Albert Joseph Moore, Jean Frederic Schall, John Zoffany and Antoine Pesne.

Since then, Muteteri kept the paintings as decoration in her house in Mbuya. In 2009, however, Muteteri told court in Kampala last week, her Israeli friend Eli Levi offered to find a potential buyer for these valuable paintings. Through his connections, Levi identified a one Joseph Gabai as an interested buyer.

Since there was no previous valuation for these paintings, Muteteri used the little knowledge she had to come up with a valuation of $600,000 (about Shs 1.2bn as per the exchange rate then) for all the four paintings. In an agreement that Muteteri signed with Gabai, she says, she was supposed to transport the paintings at her cost and would receive payment on delivery of the goods.

Muteteri, therefore, contacted East African Courier (U) Ltd [licensee of FedEx Express Corporation] to transport the artwork. After inspection of the artwork, FedEx agreed to transport the goods but advised Muteteri to get insurance cover for the goods since they were of a much bigger value.

She was thus referred to the Insurance Company of East Africa (ICEA), who insured the artwork at a transaction value of $600,000. She was given a certificate of marine insurance by ICEA and goods were discharged on October 26, 2009. Both FedEx and ICEA clearly described the paintings in the airway bill, insurance documents and all other related documents. FedEx packaged the items.

Muteteri, however, noticed a delay in delivery. She said she notified a one Nasser Matovu from ICEA about the delay. When the goods finally arrived on November 22, 2009, they were opened by FedEx and customs officials in the presence of the police in Israel. They were empty!

The recipient immediately contacted Muteteri who rushed to the ICEA offices the next day and filed an official report of the loss of her artwork in transit. She said she surrendered all the required documents to them.

On November 24, two days later, Muteteri wrote to FedEx, through Impala Legal attorneys and consultants, holding them responsible for the loss of the artwork and requiring them to reimburse her costs. She says she received no response.

On January 10, 2010, Muteteri, through the Kampala Associated Advocates, wrote to FedEx reiterating the demand for reimbursement of the value of the package and other costs incurred. FedEx replied on January 15, through Rugasira and Company Advocates and accepted responsibility of losing the goods in transit but indicated that their liability is limited to $100.

On March 9 2010, ICEA wrote to Muteteri's lawyers and denied liability on grounds that Muteteri violated the condition of insurance agreement that required her to report the loss immediately or in any event not later than three days from the date of delivery. But Muteteri insists that she reported the matter the following day after receiving the information that the goods had not reached their destination.

Muteteri, therefore, filed a case against the two in the High court of Uganda [Commercial Division] suit number 203 of 2010 presided over by Hon Justice Hellen Obura.

She sued FedEx as the first defendants on claims of failure to ensure proper labelling and handling of the package, failure to ensure that the package was properly delivered to its destination, misplacement and loss of the paintings.

She also sued ICEA as the second defendants for breach of contract of insurance. She is demanding $600,000, courier charges worth $1,200, insurance costs of $9,000, interest on the sum of $600,000 from January 2010 till payment in full. She is also claiming general damages and all legal fees.

Although the case was filed in 2010, it has dragged on since then. During the hearing on September 6 last year, Muteteri made her testimony but Judge Obura ordered the plaintiff's counsel to serve the first defendants (FedEx) to make their appearance in court before the main witness (Muteteri) finishes her testimony because some claims were directed at them.

In a recent hearing on February 12, 2013, FedEx still failed to make it to court while ICEA were represented by Peters Musoke of Shonubi, Musoke and Co Advocates. The judge thus ruled that Muteteri finishes her testimony but there could be no cross examination since the first defendant was absent.

The case was adjourned to April 29-30 and May 2 where the respondents will present their case.

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