Concorp International Ltd. v. East and Southern Development Bank (Civil Appeal 11 of 2009)

Supreme Court · [2010] UGSC 19 · 2010 Appeal Allowed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second appeal from the Court of Appeal's confirmation of the High Court's dismissal of the suit on a preliminary objection of statutory immunity.

Decision

Appeal allowed; orders of the Court of Appeal set aside and the suit remitted to the High Court for hearing on the merits.

The full judgment

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Holding

The Court considered whether the statutory immunity conferred on the Eastern and Southern African Trade and Development Bank by the Act (Cap 53), which gave force of law to Articles 24 and 43 of the Bank's Charter, extended to commercial loan transactions with a private third party. Applying the literal rule and, the enacting words being ambiguous, the preamble and the ejusdem generis rule, the Court held the immunity is functional, restricted to transactions between the Bank and the Government of Uganda, and does not cover commercial dealings with third parties. No presidential waiver was required and the High Court had jurisdiction. The appeal was allowed and the suit remitted for hearing on the merits.

Facts

Concorp International Ltd, a body corporate established in Sudan and registered in Uganda, entered into a loan agreement with the respondent bank on 3 December 1996 to finance construction of an oil refinery in Sudan, secured by the appellant's land at Mukabya Road, Kampala. A further trade-finance loan followed on 3 October 1997, and on 4 October 1999 the parties executed a memorandum of understanding restructuring both loans. A dispute arose from that memorandum, and the respondent instructed an auctioneer and court bailiffs to attach and sell the appellant's land. The appellant sued in the High Court for breach of contract, seeking general damages, a permanent injunction restraining the threatened eviction and sale, and a declaration that the land was not subject to a mortgage in the respondent's favour. The respondent raised a preliminary objection that, under Article 43(3) of its Charter given force of law by Cap 53, it was immune from every form of legal process unless its President waived the immunity, which had not been sought. The trial judge upheld the objection and dismissed the suit and application with costs, and the Court of Appeal affirmed.

Issues

Whether the immunity conferred on the respondent bank by the Act (Cap 53) governs only relations between the Government of Uganda and the bank, or gives the force of law to the immunity provisions of the Charter generally.
Whether the statutory immunity under Cap 53 extends to commercial loan transactions between the respondent and a private third party.
Whether a waiver from the President of the respondent bank was necessary before legal proceedings could be instituted against it, and consequently whether the Ugandan High Court had jurisdiction.

Orders

Appeal allowed.
Orders of the Court of Appeal set aside.
Case remitted to the High Court for hearing on the merits.
Respondent to pay the appellant's costs in the Supreme Court and the Court of Appeal.
Costs in the High Court to abide the outcome of the hearing of the case.

Key headnotes

Statutory Interpretation — Literal Rule — Recourse to the Preamble as an Aid

The intention of the legislature must be deduced from the enacting words of a statute; recourse may be had to the preamble as an interpretive aid only where those enacting words are unclear and ambiguous.

Statutory Interpretation — General Words Restricted to the Fitness of the Matter (ejusdem generis)

General and imprecise words in a statute are to be restricted to the fitness of the matter and construed as particular where the legislative intention is particular.

Immunities — International Organisations — Functional Not Absolute Immunity

The immunity of an international organisation is derived from its constituent treaty or charter and is functional, encompassing only those acts necessary for the execution of the functions and the fulfilment of the institutional purposes with which the organisation is entrusted.

Immunity of Development Bank — Cap 53 — Commercial Transactions with Third Parties

The immunity conferred on the Eastern and Southern African Trade and Development Bank by the Act (Cap 53) is restricted to transactions between the Bank and the Government of Uganda or its agencies and does not extend to commercial transactions between the Bank and a private third party.

Jurisdiction — Waiver of Immunity — Access to the High Court

A waiver of immunity by the President of the Bank is required only for transactions falling within the Bank's official objectives; where the transaction is a commercial dealing with a third party not covered by the immunity, no waiver is necessary and the High Court has jurisdiction over the dispute.

Immunities — Distinction Between Sovereign Immunity and International Organisation Immunity

Sovereign States derive immunity from the principle of reciprocity, which is restricted to acts jure imperii and does not extend to acts jure gestionis; international organisations instead derive immunity from their constituent treaties and its scope is determined by the principle of functionality.

Legislation cited (10)

Eastern and Southern African Trade and Development Bank Act (Cap 53) s.2
Eastern and Southern African Trade and Development Bank Act (Cap 53) s.3
Eastern and Southern African Trade and Development Bank Charter art.4
Eastern and Southern African Trade and Development Bank Charter art.13(1)
Eastern and Southern African Trade and Development Bank Charter art.43
Eastern and Southern African Trade and Development Bank Charter art.46(1)
Arbitration and Conciliation Act (Cap 4) s.6
Civil Procedure Rules (SI 71-1)
COMESA Treaty s.27(2)
COMESA Treaty art.174(1)(2)(a)

Cases cited (7)

Attorney General v Prince Ernest August of Hanover [1957] AC 436
Wethered v Calcutt (1842) 4 Man & G 566
Tononoka Steels Ltd v Eastern and Southern African Trade and Development Bank (2000) 2 EA 536
SA Dhellemea et Masurel v Banque Centrale de Turquie (1963) 45 ILR 85
Mendaro v World Bank 717 F 2d 610
Broadbent v Organisation of American States 628 F 2d 27 (1980)
Giovanni Porru - vs - FAO (UNJY) (1960)

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.