Wakilii

Bachwenkojo v Shengli Engineering Construction Co (U) Ltd (Miscellaneous Application No 44 of 2022)

High Court · [2023] UGHC 4 · 2023 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for attachment before judgment and security order arising from civil suit
Decision
Application partly allowed with respondent ordered to furnish security in reduced amount

Observed later treatment

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Holding

Court held that an attorney with a power of attorney authorising institution of suits has valid authority to sue on behalf of the donor. The court ordered the respondent foreign company to furnish security in the form of a bank guarantee of UGX 100,000,000 within 30 days to prevent the risk of a decree becoming infructuous, though the court rejected the applicant's request to attach performance guarantees held by a third party.

Outcome

Application partly allowed with respondent ordered to furnish security in reduced amount

Facts

The applicant and respondent had executed a lease agreement allowing the respondent (a Chinese construction company working on a road project) to extract rock materials from land jointly owned by the applicant. After the lease expired, the respondent allegedly continued extraction without authority, leading the applicant to file Civil Suit No. 05 of 2022 claiming mesne profits, declaratory orders, injunction and damages valued at UGX 100,000,000. The respondent contended it had a lease extension signed by the applicant. The applicant then brought this interlocutory application seeking to attach the respondent's performance guarantees with UNRA or alternatively for the respondent to furnish security of UGX 3,000,000,000, arguing the respondent was domiciled in China, was winding up operations in Uganda, had no known assets in Uganda, and that Uganda had no reciprocal enforcement treaty with China.

Issues

  1. Whether the applicant's attorney had authority to institute the suit.
  2. Whether the respondent should be ordered to furnish security for the applicant's claim.

Orders

  • The respondent's objection to the applicant's attorney's authority was overruled.
  • The respondent shall furnish security in the form of a bank guarantee issued by any commercial bank in Uganda in the sum of UGX 100,000,000 within 30 days from the date of this ruling.
  • Costs of this application shall abide by the outcome of Civil Suit No. 05 of 2022.

Rules and key headnotes

Civil Procedure — Power of Attorney — Authority to Institute Suits
Where a power of attorney expressly grants authority to institute suits, defend suits and represent the donor in all suits regarding protection of legal and equitable rights in specified property, the donee has valid authority to commence legal proceedings on behalf of the donor.
Civil Procedure — Power of Attorney — Revocation — Principal-Agent Relationship
A validly executed and registered power of attorney creates a principal-agent relationship. The principal's decision to personally execute a transaction that could have been delegated to the attorney does not operate as implied revocation. A power of attorney can only cease to have effect when formally revoked in writing, or upon death or incapacity of either party, or upon expiry of a specified term.
Civil Procedure — Attachment Before Judgment — Requirements Under Order 40 CPR
Under Order 40 Rule 1 of the Civil Procedure Rules, a defendant may be called upon to furnish security where the court is satisfied by affidavit or otherwise that the defendant, with intent to delay the plaintiff or obstruct or delay execution of any decree, has absconded, is about to abscond, or has disposed of or removed property from the court's jurisdiction, or is about to leave Uganda in circumstances affording reasonable probability of obstructing execution.
Civil Procedure — Attachment Before Judgment — Third Party Rights
A court cannot order attachment of property or guarantees held by or for the benefit of a third party who is not a party to the application and has not been given an opportunity to be heard. Performance guarantees issued in favour of a third party beneficiary cannot be divested without affording that beneficiary notice and hearing.
Civil Procedure — Security for Judgment — Proportionality
Where a plaintiff seeks an order for the defendant to furnish security before judgment, the amount of security must bear reasonable proportion to the value of the claim as pleaded. Security worth billions cannot be justified where the plaintiff's own pleadings value the claim at UGX 100,000,000.
Civil Procedure — Foreign Companies — Security for Judgment
The object of provisions on attachment before judgment and provision of security is to prevent attempts by a defendant to evade justice and avoid a decree that may be passed, serving as a guarantee against a decree becoming infructuous for want of available property. Where a foreign company registered in Uganda has unclear domiciliation and unsubstantiated assertions about asset ownership, the court may order security to prevent issuing decrees in vain.

Legislation cited (7)

Cases cited (2)

  • Makubuya Enock Willy T/A Pollaplast v Songdoh Firms Ltd & Anor (HCMA No. 312 of 2018)
  • Custom & Excise Commissioner v Ancor Foods Ltd (1999) 1 WLR 1139

Full judgment

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

Bachwenkojo v Shengli Engineering Construction Co (U) Ltd (Miscellaneous Application No 44 of 2022) 2023 UGHC 4 (17 January 2023)
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.