Wakilii

Coil Limited v Transtrade Services Limited (MISCELLANEOUS CIVIL APPLICATION No. 0014 OF 2016)

High Court · [2016] UGHCCD 93 · 2016 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for attachment of assets before judgment arising from a pending civil suit
Decision
Application dismissed with costs to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for attachment of assets before judgment. The applicant failed to establish a real risk that the respondent would dissipate or remove assets beyond the ordinary course of business to frustrate enforcement. Mere foreign residence and refusal to settle out of court are insufficient. The applicant failed to provide an undertaking as to damages and failed to show sufficient candour in the ex parte application. The alternative prayer for security was inapplicable to a corporate respondent.

Outcome

Application dismissed with costs to the respondent

Facts

On 8 January 2016, the respondent's motor vehicles rammed into the applicant's electrical generator at Goli Customs in Nebbi District, damaging it beyond repair. The applicant instituted a civil suit for damages. The respondent, a Kenyan-based transport company, had not yet filed its defence. The applicant, concerned that the respondent had no known assets in Uganda, sought an order attaching two motor vehicles before judgment, alternatively an order for the respondent to furnish security. The applicant alleged the respondent's refusal to settle out of court demonstrated intent to circumvent any future judgment. An Assistant Registrar had previously granted an interim attachment order in March 2016, but the applicant alleged the respondent removed the trucks in contempt. The applicant sought a full attachment order from the High Court Judge.

Issues

  1. Whether the applicant was entitled to an order for attachment of the respondent's motor vehicles before judgment.
  2. Whether the applicant established a real risk that the respondent would dissipate or remove assets to frustrate enforcement of a prospective judgment.
  3. Whether the applicant satisfied the requirements for a Mareva injunction.
  4. In the alternative, whether the respondent should be directed to furnish security to satisfy the applicant's claim.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Civil Procedure — Attachment Before Judgment — Requirements for Mareva Injunction
An order for attachment before judgment (Mareva injunction) is granted only in exceptional cases to prevent dissipation of assets with the intention or effect of frustrating enforcement of a prospective judgment. The applicant must establish: (1) a strong case likely to succeed; (2) evidence that the respondent is removing or there is a real risk of removal of assets from the jurisdiction to avoid judgment, or (3) the respondent is dissipating or disposing of assets in a manner clearly distinct from the usual or ordinary course of business; and (4) the applicant is prepared to give an undertaking as to damages.
Civil Procedure — Attachment Before Judgment — Proof of Real Risk of Dissipation
Mere foreign residence or domicile of the respondent is insufficient to justify attachment before judgment. The applicant must provide credible evidence of a real risk of dissipation, such as property and company searches showing assets are being divested or dissipated, or evidence that the respondent is disposing of assets other than in the ordinary course of business.
Civil Procedure — Ex Parte Applications — Duty of Candour
An applicant seeking an ex parte order must observe the utmost duty of good faith and full and frank disclosure. The applicant must present the case fully and fairly, identify key points for and against the application, investigate the nature of the claim and likely defences, and disclose all facts or matters which reasonably could be taken to be material by the judge. The obligation extends to placing before the court what any interested person would, if present, wish to adduce by way of fact or say in answer to the application.
Evidence — Affidavit Practice — Information and Belief
An affidavit based on information which does not disclose the source of that information is defective and may not support an application. A defective affidavit may not be relied upon to support an application.
Civil Procedure — Attachment Before Judgment — Undertaking as to Damages
An undertaking as to damages is almost certainly mandatory for an order of attachment before judgment, unless dispensed with by the court for good reason such as the possibility of stifling the action. The requirement weeds out speculative or tactical applications and provides assurance that the applicant is serious and confident in the justness of its cause. Absent such an undertaking, the court should not grant the order.
Civil Procedure — Attachment Before Judgment — Proportionality and Ordinary Course of Business
An order for attachment before judgment is not meant to prohibit the respondent from dealing with or disposing of assets in the ordinary and proper course of business. The order must be proportionate, and the court must consider the effect on the respondent's ability to conduct its business in the ordinary course, particularly where liability is yet to be determined. The order should not be used to render the applicant a secured creditor or to stifle the respondent's legitimate commercial operations.

Legislation cited (7)

Cases cited (12)

  • Lister v Stubbs [1890] All ER 797
  • Bahman (Prince Abdul) Bin Turki Al Sudairy v Abu Taha [1980] 3 All ER 409
  • Polly Peck International plc v Nadir (No 2) [1992] 4 All ER 769
  • Fourie v La Roux [2007] UKHL 1
  • The Niedersachsen [1983] 1 WLR 1412
  • Uganda Electricity Board (In Liquidation) v Royal Van Zanten (U) Ltd (Miscellaneous Application No. 251 of 2006)
  • Kabwimukya Aristella v John Kasigwa [1978] HCB 251
  • Rex v Kensington Income Tax Commissioners, Ex parte de Polignac (Princess) [1917] 1 KB 486
  • Re Stanford International Bank Ltd [2011] Ch 33
  • Siporex Trade SA v Comdel Commodities [1986] 2 LR 428
  • Customs and Excise Commissioners v Anchor Foods Ltd [1999] 1 WLR 1139
  • Re Bloomsbury International Ltd [2010] EWHC 1150 (Ch)

Full judgment

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

Coil Limited v Transtrade Services Limited (MISCELLANEOUS CIVIL APPLICATION No. 0014 OF 2016) [2016] UGHCCD 93 (10 December 2016)
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.