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Benas Uganda Limited and Another v Originaddis Investments Limited (Miscellaneous Application No. 2408 of 2024)

High Court · [2025] UGCOMMC 156 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend a summary suit arising from a commercial distributorship dispute
Decision
Applicants granted leave to defend main suit; matter to proceed to full trial

Observed later treatment

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Holding

The court granted the applicants unconditional leave to appear and defend the summary suit. The applicants raised triable issues of fact and law including disputes over the total amount owed, whether payments were made on behalf of the respondent, the existence of a tenancy agreement, the personal liability of the second applicant as a director, terms of the distributorship relationship, withholding tax obligations, and liability for expired goods.

Outcome

Applicants granted leave to defend main suit; matter to proceed to full trial

Facts

The respondent supplied goods worth UGX 179,598,900 to the first applicant under a distributorship agreement. The respondent claimed the applicants paid only UGX 43,390,000 leaving a balance of UGX 136,598,900. The applicants contended they made additional payments directly to the respondent and on its behalf to third parties, and that deductions should be made for withholding tax, expired goods worth UGX 5,988,080, returns from supermarkets worth UGX 7,752,444, and unpaid rent of UGX 26,013,000 under an alleged tenancy agreement. The respondent disputed most of these alleged payments and denied the existence of a tenancy agreement. The second applicant claimed he acted only as director of the first applicant, not in his personal capacity.

Issues

  1. Whether the Applicants have raised sufficient grounds to warrant the grant of unconditional leave to appear and defend Civil Suit No. 1287 of 2024?
  2. What remedies are available to the parties?

Orders

  • The Applicants are hereby granted unconditional leave to appear and defend Civil Suit No. 1287 of 2024.
  • The Applicants are ordered to file and serve their Written Statement of Defence within fourteen (14) days from the date of this Ruling.
  • Costs of this application shall be in the cause.

Rules and key headnotes

Civil Procedure — Summary Suits — Leave to Defend — Test for Granting Unconditional Leave
For leave to appear and defend a summary suit to be granted under Order 36 of the Civil Procedure Rules, the applicant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law. A triable issue arises when a material proposition of law or fact is affirmed by one party and denied by the other, capable of being resolved through judicial examination.
Civil Procedure — Summary Procedure — Scope and Limitations — When Summary Procedure is Appropriate
Summary procedure is resorted to in clear and straightforward cases where the demand is liquidated and there are no issues for determination by the court except for the grant of the claim. Where the amount claimed is in dispute and triable issues of fact and law exist, the matter falls outside the ambit of Order 36 of the Civil Procedure Rules.
Civil Procedure — Summary Suits — Defence Must Not Be Sham or Vague
The defence raised by an applicant seeking leave to defend must not be averred in a manner that appears to be needlessly bald, vague or sketchy. A triable issue must be differentiated from mere denial. The defence raised must not be a sham intended to delay the plaintiff from recovery of money.
Commercial Law — Distributorship Agreements — Disputes Over Payments and Deductions
Where parties dispute the total amount owed under a distributorship agreement based on alleged payments to third parties on behalf of the supplier, deductions for expired goods, withholding tax obligations, and claims for unpaid rent, and where no written agreement exists to clarify the terms, these disputes raise triable issues of fact requiring a full trial with testimonial evidence.
Company Law — Corporate Veil — Lifting the Corporate Veil — Personal Liability of Directors
Where a respondent contends that a director should be personally liable for a company's debts by lifting the corporate veil, this raises a triable issue of law and fact requiring full trial. Section 18 of the Companies Act empowers the High Court to lift the corporate veil where the company or its directors are involved in fraud.

Legislation cited (6)

Cases cited (8)

  • Oriental Insurance Brokers Ltd v Transocean (U) Limited (Supreme Court Civil Appeal No. 55 of 1995)
  • Mako Warehouse Co. Ltd v Total Uganda Ltd (High Court Miscellaneous Application No. 1031 of 2021)
  • Zzimwe Hardware & Construction Enterprises Ltd v Barclays Bank (U) Ltd (High Court Miscellaneous Application No. 114 of 2008)
  • Children of Africa v Sarick Construction Ltd (High Court Miscellaneous Application No. 134 of 2016)
  • Maluku Interglobal Trade Agency Ltd v Bank of Uganda [1985] HCB 65
  • Jamil Ssenyonjo v Jonathan Bunjo (High Court Civil Suit No. 180 of 2012)
  • Twentsche Overseas Trading Co. Ltd v Bombay Garage [1958] EA 741
  • Churanjila & Co. v A.H Adam [1950] 17 EACA 92

Full judgment

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

Benas Uganda Limited and Another v Originaddis Investments Limited (Miscellaneous Application No. 2408 of 2024) [2025] UGCommC 156 (13 March 2025)
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.