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Modern Developments Uganda Ltd and Another v FBW Uganda Ltd (Miscellaneous Application No.273 of 2014)

Court of Appeal · [2014] UGCA 146 · 2014 Application Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Application for stay of proceedings pending appeal and reference
Decision
Application for stay of proceedings dismissed with costs

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Holding

The Court of Appeal dismissed an application to stay proceedings in a High Court commercial suit pending appeal against the joinder of the second applicant as a defendant. The Court held that stay of proceedings differs in principle and statutory basis from stay of execution, and is granted only sparingly in exceptional circumstances. The authorities relied on by the applicants concerned stay of execution and were distinguishable. The second applicant, joined as a director under Order 1 Rule 7 and Order 1 Rule 10(2) of the Civil Procedure Rules, showed no undue prejudice; staying the proceedings would only prejudice the respondent and add to backlog. The order was not just or convenient, so the application was dismissed with costs.

Facts

The respondent FBW Uganda Ltd sued Modern Developments Uganda Ltd in Civil Suit No. 481 of 2012 in the Commercial Division of the High Court over a consultancy contract. On the respondent's application, Dr. Kaijuka Mutabazi Emmanuel, a director who had signed the contract, was joined as the second defendant under Order 1 Rule 7 and Order 1 Rule 10(2) of the Civil Procedure Rules, the respondent contending his presence was necessary to effectually adjudicate the matter and recover money due. The applicants, dissatisfied with the joinder, obtained leave and appealed (Civil Appeal No. 67 of 2014). Earlier applications for interim relief and stay before a single justice and the trial court had been dismissed. The applicants then sought an order staying proceedings in the main suit, which had been fixed for hearing on 4 November 2014, pending disposal of their reference and appeal, arguing the second applicant would be inconvenienced by costs if the trial proceeded.

Issues

  1. Whether the applicants satisfied the conditions to justify a grant of an order staying the proceedings in Civil Suit No. 481 of 2012 pending disposal of the reference and appeal.

Orders

  • The application is dismissed with costs.

Key headnotes

Civil Procedure — Stay of Proceedings — Distinction from Stay of Execution
Stay of proceedings and stay of execution rest on different principles and are governed by different statutory provisions; authorities concerning stay of execution after a matter has been heard on the merits are not applicable to an application for stay of proceedings in a suit yet to be determined.
Civil Procedure — Stay of Proceedings — Exceptional Circumstances and Court's Discretion
The power to stay proceedings is discretionary and is exercised very sparingly and only in exceptional circumstances where it is just and convenient to prevent undue prejudice to a party or abuse of court process; the court must also be mindful of the accumulation of backlog.
Company Law — Joinder of Director as Party — Order 1 Rule 7 and Rule 10(2) Civil Procedure Rules
A director who signed a contract may be joined as a defendant under Order 1 Rule 7 and Order 1 Rule 10(2) of the Civil Procedure Rules where his presence is necessary to enable the court effectually adjudicate all questions in the suit, without necessarily lifting the corporate veil or prejudging allegations of fraud.

Legislation cited (10)

  • Judicature (Court of Appeal Rules) Directions SI 13-10 Rule 2(2)
  • Judicature (Court of Appeal Rules) Directions SI 13-10 Rule 6(2)
  • Judicature (Court of Appeal Rules) Directions SI 13-10 Rule 42
  • Judicature (Court of Appeal Rules) Directions SI 13-10 Rule 43
  • Judicature Act s.12
  • Civil Procedure Act s.28
  • Civil Procedure Act s.98
  • Civil Procedure Rules Order 1 Rule 7
  • Civil Procedure Rules Order 1 Rule 10(2)
  • Civil Procedure Rules Order 52 Rules 1 and 3

Cases cited (6)

  • Ssekikubo and Others v Attorney General and Others (Constitutional Application No. 4 of 2014)
  • Tropical Bank Ltd and Another v Lweza Clays Ltd and Another (Civil Reference No. 64 of 2009)
  • Hwan Sung Industries Ltd v Tajdin Hussein and Others (Civil Application No. 19 of 2008)
  • Commodity Export International and Another v MKN Trading Company Ltd (Civil Application No. 96 of 2008)
  • DFCU Limited v Bagmonhamad Limited (Civil Application No. 65 of 2005)
  • Halsbury Laws of England 4th Ed. Paragraph 437
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.