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Damas Mulagwe v Bank of Uganda (Miscellaneous Application 27 of 2022)

High Court · [2023] UGCOMMC 63 · 2023 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the ruling of the Deputy Registrar under Order 50 Rule 8 of the Civil Procedure Rules regarding a garnishee order absolute
Decision
Appeal dismissed with costs; garnishee order absolute for UGX 168,482,970 confirmed

Observed later treatment

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Holding

Held that the Bank of Uganda lawfully converted foreign currency seized from Lanex Forex Bureau into Uganda Shillings under its statutory mandate to avoid demonetization losses. The appropriate exchange rate was the rate at the time of the original breach of contract (2003), not the rate at the time of the garnishee order nisi. The appeal was dismissed and the Deputy Registrar's garnishee order absolute for UGX 168,482,970 was upheld.

Outcome

Appeal dismissed with costs; garnishee order absolute for UGX 168,482,970 confirmed

Facts

The appellant was a judgment creditor seeking to enforce a decree for USD 160,000 plus taxed costs of USD 12,800 against Lanex Forex Bureau Limited. In November 2005, the Bank of Uganda retrieved various foreign currencies from Lanex Forex Bureau's premises during supervisory action. A High Court order dated 14 February 2011 restrained the judgment debtor from accessing these currencies. In December 2013, the Bank of Uganda converted the foreign currencies to Uganda Shillings at the prevailing rate to avoid demonetization losses. The appellant filed a garnishee application, and the Deputy Registrar issued a garnishee order absolute for UGX 168,482,970 on 22 July 2022. The appellant appealed, arguing the conversion was illegal and that the amount should be recalculated at the 2022 exchange rate, yielding UGX 220,539,678. The Bank of Uganda argued it acted within its statutory mandate under Article 162 of the Constitution and sections 17 and 23 of the Bank of Uganda Act to prevent currency loss through demonetization.

Issues

  1. Whether the appeal was filed within time under section 79(1)(b) of the Civil Procedure Act.
  2. Whether the Bank of Uganda illegally converted foreign currency seized from Lanex Forex Bureau into Uganda Shillings.
  3. Whether the appropriate exchange rate for conversion was the rate at the time of conversion (2013/2014) or the rate at the time of the garnishee order nisi (2022).
  4. Whether the learned Deputy Registrar erred in awarding UGX 168,482,970 instead of UGX 220,539,678.

Orders

  • Preliminary objection that the appeal was filed out of time overruled.
  • Appeal dismissed.
  • Decision of the learned Deputy Registrar granting garnishee order absolute for UGX 168,482,970 upheld.
  • Costs of the appeal awarded to the Respondent.

Rules and key headnotes

Civil Procedure — Appeals — Time Limits — Appeal from Registrar's Decision
An appeal against the decision of a Registrar under section 79(1)(b) of the Civil Procedure Act must be entered within seven days from the date of the Registrar's order.
Banking & Finance — Central Bank Powers — Currency Conversion — Statutory Mandate
Under section 17(1) and (2) of the Bank of Uganda Act, the Bank of Uganda is mandated to express, record, and settle all monetary obligations in Uganda Shillings, and has the lawful authority to convert foreign currency it holds into Uganda Shillings.
Administrative Law — Central Bank Independence — Exercise of Statutory Functions
Under Article 162(2) of the Constitution, the Bank of Uganda has autonomous powers in the exercise of its functions and is not subject to direction, including in its exercise of currency management functions to prevent demonetization losses.
Civil Procedure — Garnishee Orders — Valuation — Exchange Rate Applicable
Where a garnishee holds foreign currency arising from supervisory action rather than from a breach of contract against the garnishee itself, the appropriate exchange rate for conversion is the rate at the time of the original breach of contract giving rise to the judgment debt, not the rate at the time of the garnishee order nisi.
Banking & Finance — Currency Management — Demonetization — Preventive Action
A central bank acts within its statutory mandate when it converts old currency notes and foreign currency to prevent losses from demonetization by issuing governments, where such action is taken in accordance with industry best practice and to protect the interests of beneficial owners.

Legislation cited (8)

Cases cited (1)

  • Di Ferdinando v Simon, Smits [1920] 3 KB 409

Full judgment

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Damas Mulagwe v Bank of Uganda (Miscellaneous Application 27 of 2022) [2023] UGCommC 63 (8 September 2023)
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.