Tulsa Investiments Ltd & Anor v Attorney General & Anor (Constitutional Application No. 8 of 2015)

Constitutional Court · [2016] UGCC 6 · 2016 Application Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Application for interim injunctive orders, before a single Justice, pending determination of a temporary injunction application (Constitutional Application No. 7 of 2015) and Constitutional Petition No. 8 of 2015

Decision

Application for interim orders dismissed; substantive injunction application and constitutional petition to be fixed for hearing

The full judgment

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Holding

On an application for interim injunctive orders pending a constitutional petition challenging the Anti-Money Laundering Act, 2013, the court accepted that the applicants had shown a prima facie case with some probability of success. It nonetheless refused the interim orders. Granting them would remove the very subject matter of an ongoing money-laundering investigation — the frozen funds — and reinstating the second applicant, a senior corporate banker, would likely prejudice that investigation. The court held that investigations aimed at establishing innocence or guilt should be left to run their course, and that any loss suffered by the applicants meanwhile could be made good by an award of damages. The application was dismissed, costs to abide the substantive matters.

Facts

The first applicant company held a US Dollar account with the second respondent bank, where the second applicant was employed as a senior corporate banker. On 5 November 2014 the bank's anti-money-laundering system flagged transactions on accounts held by the applicants. Preliminary investigations suggested the accounts had been opened without following the bank's authorisation process and without the second applicant disclosing her interest, and that the second applicant had failed to act on apparent money-laundering activity. The bank froze the two accounts and suspended the second applicant to allow forensic investigation, and reported the matter to the Financial Intelligence Authority. The applicants brought Constitutional Petition No. 8 of 2015 challenging these acts and the constitutionality of provisions of the Anti-Money Laundering Act, 2013, and sought interim orders restraining the bank from acts of reprisal pending hearing of their temporary injunction application.

Issues

Whether the applicants established a prima facie case with a probability of success in the substantive constitutional proceedings.
Whether the applicants would suffer irreparable loss or injury, not adequately compensable in damages, if the interim orders were refused.
Whether the balance of convenience favoured granting interim orders restraining the freezing of the applicants' bank accounts and the suspension of the second applicant pending an ongoing money-laundering investigation.

Orders

The application is dismissed.
The Registrar, parties and their Counsel are to take steps to fix Constitutional Application No. 7 of 2015 and/or Constitutional Petition No. 8 of 2015 for hearing and disposal.
Costs to abide the outcome of Constitutional Application No. 7 of 2015 and/or Constitutional Petition No. 8 of 2015.

Key headnotes

Civil Procedure — Interim Injunctions — Prima facie case with probability of success

An interim injunction may be granted only where the applicant establishes a prima facie case with a probability of success in the substantive proceedings.

Civil Procedure — Interim Injunctions — Irreparable injury — Adequacy of damages

Where any loss the applicant may suffer pending determination of the substantive matter can be adequately compensated by an award of damages, an interim injunction will be refused.

Banking & Finance — Money laundering — Interim relief affecting investigations — Frozen accounts and suspended officer

A court will decline interim orders whose effect would be to remove the subject matter of a money-laundering investigation, such as releasing frozen funds or reinstating a senior bank officer whose position would prejudice the investigation; the investigative process should be left to run its course according to law.

Constitutional Law — Protection of constitutional rights — Limits where compensation in damages suffices

Although a court has a duty to prevent infringement of the Constitution rather than allow it on the basis that the victim may be compensated, that principle yields where granting relief would stifle a lawful investigation and any interim loss can be made good in damages.

Legislation cited (16)

Constitution of Uganda art.28(1)
Constitution of Uganda art.50(1)
Constitution of Uganda art.50(2)
Constitution of Uganda art.126
Constitution of Uganda art.137
Judicature Act s.33
Civil Procedure Act s.64(c)
Civil Procedure Act s.64(e)
Civil Procedure Act s.98
Constitutional Court (Petitions and References) Rules SI 91 of 2005 r.10
Constitutional Court (Petitions and References) Rules SI 91 of 2005 r.23
Judicature (Court of Appeal Rules) Directions SI 13 of 2010 r.2(2)
Judicature (Court of Appeal Rules) Directions SI 13 of 2010 r.43(1)
Judicature (Court of Appeal Rules) Directions SI 13 of 2010 r.43(2)
Judicature (Court of Appeal Rules) Directions SI 13 of 2010 r.44
Anti-Money Laundering Act, 2013

Cases cited (3)

Attorney General v Tinyefuza (Constitutional Appeal No. 1 of 1997)
Ismail Serugo v Kampala City Council (Constitutional Appeal No. 2 of 1998)
Humphrey Nzei vs. Bank of Uganda: Constitutional Application No. of 2013.(COA)

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.