Wakilii

Barclays Bank of Uganda v Jing Hong & Guo Odong (Civil Suit No. 35 of 2009)

High Court · [2012] UGCOMMC 5 · 2012 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection that the plaintiff's suit is barred by res judicata
Decision
Preliminary objection dismissed; suit to proceed on the merits.

Observed later treatment

Treatment recorded in citing cases followed in 2 Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Good law Followed in 2 cases and applied in 0 cases, with no adverse treatment recorded. Citations rising — 14 citing cases on record, 9 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Held that the plaintiff's suit against the guarantors is not barred by res judicata. A contract of guarantee is a separate and severable contract giving rise to a separate cause of action. The previous judgment against the principal debtor established the debt owed but did not adjudicate the liability of the guarantors under the guarantee agreements. A creditor may sue the principal debtor and guarantors separately or simultaneously. The question of whether the guarantors are liable under the guarantee has never been the subject of any controversy in the former suit between the bank and the principal debtor.

Outcome

Preliminary objection dismissed; suit to proceed on the merits.

Facts

The plaintiff bank advanced US$2,450,000 to Jinda International Textiles Corporation Ltd under a credit facility. The defendants executed personal guarantees dated 22 September 2004 and 12 November 2004 guaranteeing repayment of all liabilities of Jinda to the bank. Jinda defaulted on the loan. The bank filed HCCS No. 156 of 2008 against Jinda, and Jinda counterclaimed for the same amount. Judgment was entered against Jinda for US$2,450,000 on 18 February 2010. The suit between the bank and Jinda was subsequently dismissed for non-appearance on 24 August 2011. The bank filed the present suit on 11 February 2009 against the defendants as guarantors to recover the same sum of US$2,450,000. The defendants raised a preliminary objection that the suit is barred by res judicata because the same debt was the subject of the judgment in HCCS No. 156 of 2008.

Issues

  1. Whether the plaintiff's suit is barred by the doctrine of res judicata in light of a judgment entered against the principal debtor in a previous suit.
  2. Whether the liability of guarantors is separate and distinct from the liability of the principal debtor such that a suit against guarantors can proceed independently of a suit against the principal debtor.
  3. Whether the parties in the current suit are the same as those in the former suit, or are litigating under the same title.

Orders

  • Preliminary objection on the ground that the suit is barred by the doctrine of res judicata is overruled.
  • Costs of the preliminary objection awarded to the plaintiff.
  • Suit to proceed to be heard on its merits.

Rules and key headnotes

Res Judicata — Requirements for Application
For the doctrine of res judicata to apply under section 7 of the Civil Procedure Act, the matter directly and substantially in issue must have been heard and finally decided in a former suit between the same parties or parties under whom they claim litigating under the same title in a court competent to try the suit.
Res Judicata — Test for Determining Applicability
The test for determining whether a suit is barred by res judicata is whether the plaintiff in the second suit is trying to bring before the court in another way and in the form of a new cause of action a transaction which has already been presented before a court of competent jurisdiction in earlier proceedings and which has been adjudicated upon. The plea applies not only to points actually adjudicated but to every point which properly belonged to the subject of litigation and which the parties exercising reasonable diligence might have brought forward at the time.
Guarantee — Nature and Characteristics
A contract of guarantee is a secondary agreement in which the guarantor is liable for the debt on default of the principal debtor who is primarily liable. The guarantee is a separate and severable contract giving rise to a separate cause of action by the creditor for the same loan transaction. The liability of the guarantor is ancillary to the contract of the principal debtor but depends on the liability of the principal borrower.
Guarantee — Creditor's Right to Sue Principal and Surety
A creditor is not bound to exhaust his remedy against the principal debtor before suing the surety. On the default of the principal debtor causing damage to the creditor, the surety is, apart from special stipulation, immediately liable to the full extent of his obligation without being entitled to require notice of the default or previous recourse against the principal or simultaneous recourse against co-sureties. The creditor may sue the principal debtor and the guarantor separately or simultaneously in the same action or in separate suits.
Guarantee — Joinder of Parties
A creditor may join as defendants to an action on a guarantee all or any of the persons liable under it whether their liability is joint, joint and several or several. The principal debtor and the guarantor may but need not be sued in the same action. There is generally no need to sue or arbitrate against the principal debtor even if the principal debtor is insolvent. If the liability of the surety is several or joint and several the creditor may sue the surety independently without joining other parties or may sue some or all of them.
Res Judicata — Different Parties and Different Issues
Where a previous suit established the liability of the principal debtor for a debt but the current suit concerns the liability of guarantors under guarantee agreements, the doctrine of res judicata does not apply because the parties are different and the question of whether the guarantors are liable has never been the subject of any controversy in the previous suit. A judgment against the principal debtor only establishes how much is owing but does not conclusively establish against whom the money owing should be enforced.

Legislation cited (1)

Cases cited (11)

  • Karia and Another v Attorney General and Others [2005] 1 EA 83
  • Hon. Piro Santos Eruaga v General Moses Ali and Another (Election Petition No. 1 of 2007)
  • Boutique Shazim Ltd v Norathan Bhatia and Another (CA No. 36 of 2007)
  • Moschi v Lep Air Services Ltd [1973] AC 331
  • Stanbic Bank v Atyaba Agencies (SCCA No. 2 of 2005)
  • Bank of Uganda v Banco Arabe Espanol (SCCA No. 8 of 1998)
  • Bank of Bihar Ltd v Damador Prasad and Another (1969) 1 SCR
  • UCB Corporate Services Ltd v Clyde and Co [2002] 2 All ER (Comm) 257
  • Semakula v Magala and Others [1979] HCB 90
  • Kamunye and Others v The Pioneer General Assurance Society Ltd [1971] EA 263
  • Bank of Uganda v Banco Arabe Espanol (Civil Appeal No. 23 of 2000)

Cases citing this judgment (13)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

↓ Download PDF

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

Barclays Bank of Uganda v Jing Hong & Guo Odong (Civil Suit No. 35 of 2009) [2012] UGCommC 5 (9 February 2012)
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.