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Ahlul Bait(A.S) Islamic Foundation (ug) Ltd v Uganda Electricity distribution company Ltd & 2 Ors (HCCS 88 of 2012)

High Court · [2015] UGCOMMC 109 · 2015 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objections to striking out the plaint for non-disclosure of cause of action and limitation
Decision
Preliminary objections dismissed; matter proceeds to full hearing on the merits

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court overruled the preliminary objections. It held that the plaint disclosed multiple causes of action including breach of contract. The suit was not time-barred because written acknowledgment by the First Defendant's Managing Director of the rebate liability caused time to run afresh under s.22 of the Limitation Act. The First Defendant was properly joined as it inherited consumer deposits as liabilities under the divesture instrument, and the rebate amounts constituted consumer deposits.

Outcome

Preliminary objections dismissed; matter proceeds to full hearing on the merits

Facts

In 1997, Uganda Electricity Board (UEB) invited investors to extend electricity to commercially viable sites on agreed terms. The Plaintiff entered into an agreement with UEB in 1998 to construct a power line from Lugolole to Ikulwe at a cost of $331,770, with repayment through monthly rebates over six years. Works were completed and handed over to UEB on 25 August 2000. In 1999, the Electricity Act disbanded UEB and created three successor companies including UEDCL, to which assets and liabilities were transferred under SI 28/2002. UEB remained in place for winding up. By the time of disbanding, rebates had not been paid. The Plaintiff demanded refund in 2003. Correspondences continued without payment. The Plaintiff filed suit in March 2012, later amending to add the Second and Third Defendants. The First and Second Defendants raised preliminary objections that the plaint disclosed no cause of action and was time-barred.

Issues

  1. Whether the plaint discloses a cause of action.
  2. Whether the suit is barred by law under the Limitation Act.
  3. Whether the First Defendant (UEDCL) is properly joined as a party to the suit.
  4. Whether the suit against the Second Defendant (UEB in receivership) is time-barred.

Orders

  • Preliminary objection overruled.
  • Suit to be fixed for hearing.
  • Costs to abide the outcome of the suit.

Rules and key headnotes

Civil Procedure — Preliminary Objections — Disclosure of Cause of Action — Test
A plaint discloses a cause of action where it shows that the plaintiff enjoyed a right, the right has been violated, and the defendant is liable. If any of those essentials is missing, no cause of action has been shown. The plaint must be looked at in its entirety to determine whether it discloses a cause of action.
Civil Procedure — Limitation — Acknowledgment of Debt — Effect on Limitation Period
Under s.22 of the Limitation Act, where a right of action has accrued to recover a debt and the person liable acknowledges the claim in writing, the right is deemed to have accrued on the date of acknowledgment and time begins to run afresh from that date. Acknowledgment need not identify the amount of the debt and may acknowledge a general indebtedness, provided the amount can be ascertained by extraneous evidence.
Contract Law — Successor Liability — Vesting of Rights and Obligations
Under s.30(c) of the Public Enterprise Reform and Divesture Act, all contracts and agreements are binding on and enforceable by, against or in favour of a successor company as fully and effectively as if the successor company had been the person by whom they were entered into. A successor company is bound by the rights and obligations attached to properties vested in it.
Commercial Law — Consumer Deposits — Definition and Application
A deposit means the act of giving money or other property to another who promises to preserve it or to use it and return it in kind, or the money or property so given. An amount spent by a party on infrastructure construction that is handed over to another party on terms requiring repayment in instalments amounts to a consumer deposit and falls within liabilities inherited by a successor company under divesture legislation.
Civil Procedure — Joinder of Parties — Purpose and Propriety
The purpose of joining parties to a suit is to enable the court to determine effectively and finally all the issues in controversy arising within the suit. Where matters raised are of an evidential nature, they can only be properly determined when the parties have been heard, and each party must have an opportunity to be heard without prejudice to either.

Legislation cited (18)

Cases cited (13)

  • Auto Garage and Others v Motokov (No. 3) [1971] EA 514
  • Kebirungi Justine v Road Taylors Side and Others (CACA No. 121 of 2003)
  • Hilton v Salton Steam Laundry [1946] KB 81
  • Madhivani International S.A v Attorney General (SCCA No. 23 of 2010)
  • Erukana Kuwe v Raishranban Darugi (CACA No. 21 of 2002)
  • Hussein Hemidai v UEB (HCCS No. 584 of 2003)
  • Charles Lubowa and 4 Others v Makerere University (SCCA No. 2 of 2011)
  • National Insurance Corporation vs. Span International Ltd [1997 - 2001]
  • Ismail Serugo v KCC and Another (CA No. 2 of 1998)
  • Tororo Cement Co. Ltd v Frokina International Ltd (SCCA No. 2 of 2001)
  • Mavunwa Edison and Amiti Tom v Uganda Electricity Generation Co. Ltd (CACA No. 96 of 2004)
  • Dungate v Dungate [1965] 3 All ER 818
  • Nyamarere v UEB (in liquidation) (CACA No. 55 of 2008)

Full judgment

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

Ahlul Bait(A.S) Islamic Foundation (ug) Ltd v Uganda Electricity distribution company Ltd & 2 Ors (HCCS 88 of 2012) [2015] UGCommC 109 (9 September 2015)
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.