Wakilii

Coil Limited and Another v Attorney General and I&M Bank (U) Limited (Miscellaneous Application No. I95 of 2025)

Court of Appeal · [2025] UGCA 235 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application before a single Justice of the Court of Appeal for a stay of execution and injunction pending appeal (arising from Civil Appeal No. 1666 of 2023)
Decision
Application allowed; injunction granted restraining the respondents from liquidating the performance guarantee pending determination of Civil Appeal No. 1666 of 2023

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The single Justice dismissed both preliminary objections: the application was not res judicata (it was first made and dismissed in the High Court, then properly brought to the Court of Appeal under Rule 42), and although a setting-aside order is a negative order that cannot be stayed, the application was saved by its prayer for injunctive relief. On the merits he found the pending appeal arguable (the High Court order had finally determined the suit without hearing evidence, making it a decree appealable as of right), that encashment of the UGX 5.47 billion performance guarantee would cause irreparable injury to goodwill and pledged property, that the balance of convenience favoured the applicants, and that there was no undue delay. The application was allowed.

Outcome

Application allowed; injunction granted restraining the respondents from liquidating the performance guarantee pending determination of Civil Appeal No. 1666 of 2023

Facts

In August 2018 the applicants, in a joint venture, contracted with the Ministry of Water and Environment to construct the Wadelai Irrigation Scheme infrastructure in Nebbi District. As a condition of performance they took out a bank performance guarantee of UGX 5,478,439,792 from the 2nd respondent (I&M Bank) in favour of the Ministry. The project was delayed; the applicants attributed the delays to additional works ordered by the employer, floods in 2022–2023, and hostility from local community members. The Ministry demanded liquidation of the guarantee. The applicants sued in HCCS No. 1530 of 2023 for fraud and breach of contract and obtained an interim injunction from the Assistant Registrar (HCMA No. 2837 of 2023) restraining encashment pending hearing of a temporary injunction application. On the 1st respondent's appeal (HC Misc. Appeal No. 0040 of 2023), a High Court judge set aside that interim injunction. The applicants appealed to the Court of Appeal (CACA No. 1666 of 2023). After the Ministry renewed its demand by letter of 23 April 2025, the applicants brought this application for a stay of execution and injunction.

Issues

  1. Whether the application for stay of execution is barred by the doctrine of res judicata.
  2. Whether the High Court order setting aside the Assistant Registrar's interim injunction was a negative, self-executing order incapable of being stayed.
  3. Whether the applicants established a pending appeal with a likelihood of success.
  4. Whether the applicants would suffer irreparable injury, or the appeal would be rendered nugatory, if a stay of execution and injunction were not granted.
  5. Where the balance of convenience lies.
  6. Whether the application was instituted without undue delay.

Orders

  • An order of injunction doth issue restraining the Respondents from enforcing and/or liquidating the performance guarantee referenced I&M/LD/Ext 137-06/23 issued to the Applicants by the Second Respondent in favour of the Ministry of Water and Environment until the final determination of C.A.C.A No. 1666 of 2023.
  • Costs of the application shall abide by the outcome of the Appeal.

Rules and key headnotes

Civil Procedure — Stay of Execution — Res Judicata — Application first made and dismissed in the High Court
An application for stay of execution that was first made in and dismissed by the High Court, and is then brought afresh in the Court of Appeal as required by Rule 42 of the Court of Appeal Rules, is not barred by the doctrine of res judicata.
Civil Procedure — Stay of Execution — Negative Orders — Order setting aside an injunction
A dismissal or setting-aside order is a negative order that does not award any executable remedy and therefore cannot be stayed, save where it carries an award of costs; but an application is nonetheless competent where it is saved by an accompanying prayer for injunctive relief.
Civil Procedure — Stay of Execution and Injunction Pending Appeal — Conditions for grant
An applicant for a stay of execution or injunction pending appeal must establish a pending appeal with a likelihood of success, that irreparable damage will be suffered or the appeal rendered nugatory if relief is refused, where the balance of convenience lies, and that the application was instituted without delay.
Civil Procedure — Likelihood of Success — Court not to delve into the merits of the appeal
At the stage of an application for stay of execution the court should not delve into the merits of the appeal, which are the preserve of the full bench; it is sufficient that the appeal raises real and arguable questions of law, fact, or mixed law and fact.
Civil Procedure — Appeals — Leave to Appeal — Order finally determining the suit is a decree appealable as of right
Where a High Court order has the characteristic and consequence of finally determining the suit without a hearing on the evidence, it constitutes a decree within the meaning of section 2(c) of the Civil Procedure Act and is appealable as of right, so that no leave to appeal is required.
Banking & Finance — Performance/Demand Guarantees — Irreparable Injury — Loss of goodwill and pledged property
The threatened encashment of a substantial performance guarantee secured by a business's pledged properties, with the attendant loss of goodwill and transactional credibility, constitutes irreparable injury of a substantial nature that cannot adequately be atoned for in damages.
Civil Procedure — Injunction Pending Appeal — Conditions identical to stay of execution
The conditions governing the grant of an injunction pending appeal are largely the same as those governing the grant of a stay of execution.

Legislation cited (9)

Cases cited (21)

  • Osman Kassim Ramathan v Century Bottling Co. Ltd (Supreme Court Civil Appeal No. 34 of 2019)
  • Hwang Sung Ltd v M and D Timber Merchants and Transport Ltd (Supreme Court Civil Appeal No. 2 of 2018)
  • Haruna Enterprises (U) Limited and Another v Diamond Trust Bank (U) Limited and Another (Civil Appeal No. 1271 of 2023)
  • National Housing and Construction Corporation v Kampala District Land Board and Another (Supreme Court Civil Appeal No. 6 of 2002)
  • Tropical Commodities Supplies Limited and 2 Others v International Credit Bank Limited (In Liquidation) (High Court Miscellaneous Application No. 379 of 2003)
  • Theodore Ssekikubo and Others v Attorney General (Constitutional Application No. 6 of 2013)
  • Kyambogo University v Isaiah Omolo Ndiege (Civil Application No. 341 of 2013)
  • Kamunye v Pioneer Assurance Ltd [1971] EA 263
  • King's College Budo Staff Savings Scheme Limited v Zaverio Samula and Others (High Court Civil Suit No. 26 of 2020)
  • Muchanga Investments Limited v Safaris Unlimited (Africa) Ltd and 2 Others (Civil Appeal No. 25 of 2002) [2009] KLR 229
  • Parliamentary Commission v Uganda Revenue Authority and Another (High Court Miscellaneous Application No. 219 of 2015)
  • Exclusive Estate Limited v Kenyan Posts and Telecommunication Corporation and Another [2005] 1 EA 53 (CA)
  • Onen Thombo v Saverino (Civil Appeal No. 11 of 2022)
  • Tahar Fourati Hotels Ltd v Nile Hotel (Int) Ltd (High Court Miscellaneous Application No. 614 of 2023)
  • Lawrence Musiitwa Kyazze v Eunice Busingye (Supreme Court Civil Application No. 18 of 1990)
  • In re Overseas Aviation Engineering (GB) Ltd (1962) 3 All ER 12
  • China Henan International Cooperation Group Co. Ltd v Justus Kyabahwa (Civil Application No. 100 of 2021)
  • Junaco (T) Limited and 2 Others v DFCU Bank Ltd (Civil Application No. 145 of 2023)
  • Giella v Cassman Brown & Co. [1973] EA 358
  • Jayndrakumar Devechand Devani v Haridas Vallabhdas Bhadresa and Another (Civil Appeal No. 21 of 1971)
  • Robert Kavuma v Hotel International (Supreme Court Civil Appeal No. 8 of 1990)

Full judgment

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Coil Limited and Another v Attorney General and I&M Bank (U) Limited (Miscellaneous Application No. I95 of 2025) [2025] UGCA 235 (18 July 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.