Wakilii

Banco Arabe Espanol v Bank Of Uganda (Civil Appeal 8 of 1998)

Supreme Court · [1999] UGSC 24 · 1999 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Second civil appeal from a Court of Appeal decision that had reversed a High Court order setting aside dismissal and reinstating a suit under Order 23 rule 2(2) of the Civil Procedure Rules.
Decision
Court of Appeal orders set aside; High Court order reinstating the suit restored; suit to proceed to trial on the merits.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On a second appeal, the Supreme Court considered whether the Court of Appeal wrongly interfered with the High Court's discretion to set aside dismissal and reinstate a suit under Order 23 rule 2(2) of the Civil Procedure Rules, after the plaintiff lodged a bank guarantee instead of the ordered cash security for costs. The Court held that counsel's mistaken belief that a guarantee would suffice, together with delays in international money transfer, amounted to sufficient cause, and that the trial judge had exercised her discretion judicially. On an appeal against a discretionary decision the appellate court's role was to ask whether discretion was exercised judicially, not to re-evaluate the evidence to substitute its own conclusion. Appeal allowed; Court of Appeal orders set aside and the High Court reinstatement restored.

Outcome

Court of Appeal orders set aside; High Court order reinstating the suit restored; suit to proceed to trial on the merits.

Facts

Banco Arabe Espanol, a Spanish bank, lent the Uganda Government USD 1,000,000 under a 1989 loan agreement guaranteed by Bank of Uganda. After the Government defaulted, the bank sued the Government and Bank of Uganda to recover the loan. The suit against the Government was dismissed as time-barred but proceeded against Bank of Uganda. On Bank of Uganda's application, the High Court ordered the appellant to deposit UGX 20,000,000 cash as security for costs within thirty days. The appellant instead lodged a bank guarantee from Tropical Africa Bank, which the Registrar rejected as not being cash, and the suit was dismissed. The appellant applied to set aside the dismissal, deposing that its counsel mistakenly believed a guarantee would suffice, and that bureaucratic procedures and delays in international money transfers from Spain prevented timely cash payment; it had also filed an application for extension of time before the dismissal. The High Court reinstated the suit, finding sufficient cause. The Court of Appeal reversed, holding no sufficient cause was shown and that the alleged delays were an afterthought.

Issues

  1. Whether the Court of Appeal failed in its duty, as first appellate court, to re-appraise and re-evaluate the affidavit evidence supporting the application for reinstatement of the suit.
  2. Whether the Court of Appeal wrongly interfered with the High Court's exercise of discretion to set aside the dismissal of, and reinstate, the suit under Order 23 rule 2(2) of the Civil Procedure Rules.
  3. Whether sufficient cause was shown for the appellant's failure to furnish the ordered cash security for costs within the prescribed time.
  4. Whether a mistaken belief of counsel that a bank guarantee would suffice in place of an ordered cash deposit can constitute sufficient cause.

Orders

  • Appeal allowed with costs in the Supreme Court and in the Court of Appeal.
  • Orders of the Court of Appeal set aside.
  • Orders of the High Court setting aside the dismissal and reinstating the suit restored, and the trial of the suit to continue.
  • Cost of the application in the High Court awarded to the respondent as thrown-away costs.

Rules and key headnotes

Civil Procedure — Security for Costs — Setting Aside Dismissal — Sufficient Cause
Where a suit is dismissed for failure to furnish security for costs within the time fixed, the dismissal may be set aside under Order 23 rule 2(2) of the Civil Procedure Rules only where the plaintiff proves it was prevented by sufficient cause from furnishing the security within the time allowed.
Civil Procedure — Sufficient Cause — Mistake or Error of Counsel
A mistaken belief or error on the part of counsel — such as a belief that a bank guarantee would suffice in place of an ordered cash deposit — may constitute sufficient cause and ought not to be visited on the client, particularly where the client showed a genuine intention to comply with the order.
Civil Procedure — Appellate Practice — Interference with Exercise of Discretion
An appellate court will not interfere with a trial court's exercise of discretion unless the trial court misdirected itself and thereby arrived at a wrong decision, or it is manifest from the case as a whole that it was clearly wrong and a failure of justice resulted; a mere difference of opinion is not sufficient ground for interference.
Civil Procedure — Appellate Practice — Appeal Against Discretion Distinguished from Appeal on Findings of Fact
On an appeal against a decision made in the exercise of discretion, the appellate court's task is not to re-appraise or re-evaluate the evidence to reach its own conclusion, but to determine whether there was evidence supporting the trial court's conclusion and whether the discretion was exercised judicially.
Civil Procedure — First Appellate Court — Duty to Re-evaluate Evidence
A first appellate court has a duty to rehear the case and subject the evidence, including affidavit evidence, to fresh scrutiny and reach its own conclusion, bearing in mind that it did not see the witnesses where the matter turns on demeanour.
Evidence — Affidavits — Disclosure of Means of Knowledge
An affidavit that fails to disclose the deponent's means of knowledge or the grounds of his belief, and does not distinguish between matters stated on information and belief and matters within the deponent's own knowledge, is defective and may be rejected.
Evidence — Affidavits — Counsel as Witness for Client
It is undesirable for counsel to swear an affidavit as a witness for his client on contentious technical matters of which counsel is not expected to have personal knowledge.

Legislation cited (6)

Cases cited (33)

  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Patrick Njoroge Nguri v Livingstone Wanji Muthuri (1955) 22 EACA 43
  • Shabir Din v Ram Prakash Anand (1955) 22 EACA 48
  • Peters v Sunday Post Ltd [1958] EA 423
  • Shah v Allu (1947) 14 EACA 45
  • Uganda Development Bank v National Insurance Corporation (Civil Appeal No. 28 of 1995)
  • G.M. Combined (U) Ltd v A.K. Detergents (U) Ltd (Miscellaneous Application No. 760 of 1997)
  • Mbogo and Another v Shah [1968] EA 93
  • Caspair Ltd v Harry Gandy [1962] EA 414
  • In re Helsby [1894] 1 QB 742
  • Coles v Ravenshear [1907] 1 KB 1
  • Baker v Baber [1908] WN 9
  • Kevorkian v Burney [1937] All ER 97
  • Gatti v Shoosmith [1939] 3 All ER 916
  • Bray v Bray [1957] EA 302
  • Haji Nurdin Matovu v Ben Kiwanuka (Civil Application No. 12 of 1991)
  • Alexander Jo Okello v Kayondo & Co. Advocates (Civil Application No. 17 of 1996)
  • Essaji v Solanki [1968] EA 218
  • Bogere Moses and Another v Uganda (Criminal Appeal No. 1 of 1997)
  • Bogere Charles v Uganda (Criminal Appeal No. 10 of 1998)
  • Pandya v R [1957] EA 336
  • Okeno v Republic [1972] EA 32
  • Charles Bitwire v Uganda (Criminal Appeal No. 23 of 1985)
  • Kairu v Uganda [1978] HCB 123
  • Eltawjick Trading Co v Libyan Arab (U) Bank and Another (HCCS No. 138 of 1985)
  • Famous Cycle Agencies (Civil Appeal No. 16 of 1994)
  • Yahaya Kiriisa v Attorney General (Civil Appeal No. 7 of 1994)
  • Jetha vs. Singh (1931) LRKI
  • Devji v Jinabhai (1934) 1 EACA 89
  • Mot v Chanchalbhai (1915) 6 EALR 1
  • H.K. Shah and Another v Osman Ali (1974) 14 EACA 45
  • M.B. Patel v R. Gottifried (1963) 20 EACA 81
  • Halderkumar Mohindra v Mathuradevi Mohindra (Civil Appeal No. 34 of 1952)

Full judgment

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

Banco Arabe Espanol v Bank Of Uganda (Civil Appeal 8 of 1998) [1999] UGSC 24 (15 February 1999)
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.