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Abisha Steel Industries (In Receivership) & 2 Others v Exim Bank Uganda Limited (Miscellaneous Application 92 of 2023)

High Court · [2024] UGHC 1083 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for contempt of court arising from alleged disobedience of court orders in Civil Suit No. 5 of 2017
Decision
Application partly allowed; Respondent ordered to file preliminary report within 30 days; failure to comply will result in fine and imprisonment of receiver; no consequential monetary order granted

Observed later treatment

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Holding

Court declined to hold the Respondent in contempt, finding that although the Respondent failed to file a preliminary report as required under the Insolvency Act, it had acted in good faith by filing a detailed account report. Court ordered the Respondent to file a preliminary report within 30 days in compliance with Section 193 of the Insolvency Act and declined to grant consequential monetary orders, as the trial judge had found no financial loss was proved against the bank.

Outcome

Application partly allowed; Respondent ordered to file preliminary report within 30 days; failure to comply will result in fine and imprisonment of receiver; no consequential monetary order granted

Facts

The Applicants sought orders holding the Respondent in contempt for failing to comply with a judgment dated 27 February 2023 in Civil Suit No. 5 of 2017, which ordered the Respondent to file detailed account reports of receivership over the assets of the 1st Applicant within 30 days. The judgment and decree were served on the Respondent in early April 2023. The Respondent instructed the receiver to comply and a detailed account report was filed in court on 12 April 2023 and served on the Applicants on 17 April 2023. The Applicants contended that the report filed was inadequate because no preliminary report as required under Sections 193 and 194 of the Insolvency Act had been filed during receivership or within the court-ordered timeframe. The Applicants sought contempt orders, punitive damages of USD 1,000,000, and a consequential order for payment of USD 8,063,722 representing the insurance value of assets taken over during receivership.

Issues

  1. Whether the Respondent is in contempt of court for failing to comply with orders to file detailed account reports of receivership.

Orders

  • The Respondent should file a preliminary report within 30 days from the date of this ruling in compliance with Section 193 of the Insolvency Act, Cap 108, and avail the Applicants with it within the same period.
  • The Respondents purge themselves of contempt by complying with the order of this court under paragraph (a) above.
  • In the event that the Respondents fail to comply with the court order within the period ordered by this court in (a) above, a fine of UGX 50,000,000/= shall be paid by the Respondents and the Receiver (Mr. Felix Musiime) shall be committed to prison for six months.
  • Each party shall bear their own costs of this application.

Rules and key headnotes

Contempt of Court — Civil Contempt — Elements to be Proved
To prove contempt of court, a complainant must prove four elements: (i) the existence of a lawful order, (ii) knowledge of the order, (iii) the contemnor's ability to comply, and (iv) the contemnor's failure to comply.
Contempt of Court — Civil versus Criminal Contempt — Distinction
Civil contempt occurs when a party fails to obey a court order issued for another party's benefit and usually takes the form of disregarding court orders and judgments. Criminal contempt involves acts deliberately premeditated to diminish public respect due to courts and interferes with the court's ability to function properly.
Contempt of Court — Good Faith Compliance — Exercise of Court Discretion
Where a party alleged to be in contempt shows that it acted in good faith and took reasonable steps towards compliance with court orders, the court has discretionary power to decline from making a finding of contempt against such party, even where full compliance has not been achieved.
Receivership — Statutory Duties — Preliminary Report
A receiver is required under Section 193 of the Insolvency Act to prepare and send a preliminary report on the state of affairs of property in receivership within forty working days after appointment, and failure to file such report constitutes non-compliance with statutory duties even where other account reports are filed.
Consequential Orders — Functus Officio — When Court Cannot Vary Own Decree
A court becomes functus officio after making a final decision disposing of a matter and cannot vary its own decree. Where the trial court made a finding that alleged financial loss was not proved, a subsequent application cannot seek consequential monetary orders based on unproven loss.

Legislation cited (19)

Cases cited (6)

  • Kenya Tea Growers Association v Francis Atwoli & 5 Others [2012] EKLR
  • Attorney General v Times Newspaper Ltd (1992) 1 AC 191
  • Betty Kizito v Dickson Nsubuga & 6 Others (Supreme Court Civil Applications No. 25 & 26 of 2021)
  • Sitenda Sebalu v The Secretary General of the East African Community (Ref. No. 8 of 2012)
  • Mugerwa John Bosco & Another v Xsabo Power Ltd (High Court Miscellaneous Application No. 273 of 2018)
  • Devanti Union Limited v Tonny Kipoi Nsubuga & 2 Others (High Court Miscellaneous Cause No. 193 of 2019)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Abisha Steel Industries (In Receivership) & 2 Others v Exim Bank Uganda Limited (Miscellaneous Application 92 of 2023) [2024] UGHC 1083 (29 November 2
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.