Wakilii

Aharon Li-Ran v Shmuel Hirshberg Muli and Others (Civil Appeal No.33 of 2018)

Court of Appeal · [2025] UGCA 380 · 2025 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
First civil appeal from a High Court (Commercial Division) judgment in a suit concerning the beneficial ownership of shares in a foreign-incorporated company.
Decision
Appeal dismissed in its entirety; the High Court's declarations of beneficial share ownership and exercise of jurisdiction were upheld.

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Cited — treatment unverified cited in 1 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

The Court of Appeal dismissed the appeal in its entirety. It held that the objection to service on the foreign company was not raised at trial and could not be entertained on appeal, and that service had in any event complied with Order 29 rule 2 CPR and section 258 of the Companies Act 2012. The High Court had jurisdiction because the cause of action, the enforcement of a trust over shares executed in Uganda concerning a company operating solely in Uganda, arose in Uganda; the Isle of Man was a wholly inappropriate forum. The trial judge correctly found the Respondents beneficial owners on uncontroverted evidence, no counter-claim being necessary for declaratory relief. The ex parte order and costs order were proper, and the bias allegations were unproven.

Facts

Audley Ltd, the 4th Respondent, was incorporated in the Isle of Man in 1991 with 10,000 shares held equally by two companies, Garwood Ltd and Tanwood Ltd, as nominees. In 1992 it was registered in Uganda as a foreign company and carried on the business of running two casinos in Uganda, its sole operations. In 2015 the 1st Respondent sued for declarations that he, the Appellant and the 2nd and 3rd Respondents were the beneficial owners of the shares in agreed proportions (60%, 13.33%, 13.34% and 13.33% respectively), relying on a declaration of trust executed in Kampala in November 2012 signed by the Appellant and the 2nd Respondent, together with emails and correspondence. The 2nd, 3rd and 4th Respondents admitted the claim; the Appellant disputed it, asserting he had solely financed the casinos and that the trust was illegal under Isle of Man law. The Appellant failed to file witness statements and a trial bundle and did not appear at the agreed hearing, whereupon the trial judge ordered the suit to proceed ex parte and accepted the 1st Respondent's case.

Issues

  1. Whether an objection to service of court process on a foreign company, not raised at trial, could be entertained for the first time on appeal, and whether the foreign company was duly served.
  2. Whether the High Court of Uganda had jurisdiction to try a suit concerning the ownership of shares in a company incorporated in the Isle of Man.
  3. Whether the trial judge erred in finding that the 1st, 2nd and 3rd Respondents were beneficial owners of proportions of the shares in the 4th Respondent, absent any counter-claim.
  4. Whether the trial judge erred in ordering that the suit proceed ex parte against the Appellant.
  5. Whether the trial judge acted with bias against the Appellant.
  6. Whether the trial judge erred in ordering costs against the Appellant.

Orders

  • The appeal is dismissed in its entirety.
  • The Respondents are awarded the costs of the appeal, to be paid by the Appellant.

Key headnotes

Company Law — Shares — Beneficial Ownership through Nominee and Trust Arrangements
Property, including shares, legally vested in or registered to a company or nominee may belong beneficially to another where the arrangements make the registered holder the beneficial owner's nominee or trustee.
Civil Procedure — Appeals — Points Not Raised at Trial
An appellate court should restrict itself to matters pleaded and raised in the trial court; an objection to service of process raised for the first time on appeal will not be entertained.
Civil Procedure — Service of Process — Foreign Company Registered in Uganda
Service on a foreign company registered and carrying on business in Uganda is sufficient under Order 29 rule 2 of the Civil Procedure Rules and section 258 of the Companies Act 2012 where effected at its established place of business or on its directors; a defendant that files a defence is taken to have been duly served.
Civil Procedure — Jurisdiction — Forum Non Conveniens
A Ugandan court has jurisdiction where the cause of action arises wholly or in part in Uganda under section 15 of the Civil Procedure Act; the country of incorporation of a company is not automatically the appropriate forum, and a stay on forum non conveniens grounds requires the defendant to show a clearly more appropriate available forum.
Civil Procedure — Ex Parte Hearing — Non-appearance of Defendant
Where a defendant fails without sufficient cause to attend a duly notified hearing, the court may order the suit to proceed in his absence under Order 9 rule 25 of the Civil Procedure Rules; such an order remains valid unless set aside on application under Order 9 rule 27.
Civil Procedure — Judicial Bias — Burden and Threshold
Allegations of bias against a judicial officer are serious and must be proved, not founded on conjecture; a judge's prior routine administrative function, such as registering a company while serving as Registrar, does not meet the bias threshold.
Civil Procedure — Costs — Appellate Interference with Discretion
Costs follow the event and are a discretionary remedy; an appellate court will not interfere with a trial court's costs order absent a demonstrated misdirection or injustice.

Legislation cited (16)

  • Companies Act 1958 s.370(1)
  • Companies Act No. 1 of 2012 s.258
  • Civil Procedure Act s.15
  • Civil Procedure Rules Order 5 r.14
  • Civil Procedure Rules Order 5 r.22(g)
  • Civil Procedure Rules Order 29 r.2
  • Civil Procedure Rules Order 9 r.25
  • Civil Procedure Rules Order 9 r.26
  • Civil Procedure Rules Order 9 r.27
  • Civil Procedure Rules Order 15 r.2
  • Civil Procedure Rules Order 6 r.28
  • Court of Appeal Rules r.30(1)(a)
  • Court of Appeal Rules r.102
  • Evidence Act Cap. 8 s.43
  • Companies Act (Isle of Man) s.83
  • Companies Act (Isle of Man) 2006 s.63(3)

Cases cited (11)

  • Fr. Narsensio Begumisa and Others v Eric Tibebaga (Civil Appeal No. 17 of 2002)
  • Cullimore v Lyme Regis Corporation [1961] 3 All ER 1008
  • Geoffrey Gatete and Another v William Kyobe (Civil Appeal No. 7 of 2005)
  • Edison Kanyabwera v Pastori Tumwebaze (Civil Appeal No. 6 of 2004)
  • Remco Ltd v Mistry Jadva Parbat & Co. Ltd and Others [2002] 1 EA 233
  • Western Uganda Cotton Co. Ltd v Dr. George Asaba and 3 Others (Civil Suit No. 353 of 2009)
  • Crane Bank Ltd v Belex Tours and Travel Ltd (Civil Appeal No. 1 of 2014)
  • Prest v Petrodel Resources Ltd and others [2013] UKSC 34
  • Owners of Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR 1
  • Nilon Ltd and Another v Royal Westminster Investments SA and Others [2015] UKPC 2
  • Spiliada Maritime Corp v Cansulex Ltd [1986] 3 All ER 843
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.