Wakilii

Hydro Uganda Limited and 3 Others v Rwenzori Hydro (pty) Limited and Others (Civil Appeal 155 of 2023; Civil Application 30 of 2023)

Court of Appeal · [2023] UGCA 155 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for an interim injunction pending determination of a related application for a temporary injunction in the Court of Appeal, arising from a High Court Commercial Division ruling.
Decision
Application for an interim injunction dismissed; preliminary objections upheld.

Observed later treatment

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Holding

The single judge dismissed the application for an interim injunction. She upheld the preliminary objection that there was no valid Notice of Appeal against the 1st to 3rd respondents, because it was not served at the addresses stated in the notice within seven days as required by rule 78 of the Court of Appeal Rules; consequently no appeal existed under rule 76 to support an injunction under rule 6(2)(b). She further found no fresh demand had been made by the 1st to 3rd respondents on the advance payment bonds; the demand notices instead concerned counter-indemnities the 4th respondent (UAP) sought from the applicants. Pursuing an interlocutory injunction on appeal while the High Court suit remained undetermined was vexatious and an abuse of process.

Outcome

Application for an interim injunction dismissed; preliminary objections upheld.

Facts

The applicants, an EPC contractor and related parties, had obtained a partial temporary injunction from the High Court Commercial Division (Mubiru, J) restraining the 4th respondent, UAP Old Mutual Insurance, from paying on two performance bonds, but the trial judge declined to restrain payment on three advance payment bonds for want of proof of fraud or unconscionability. The applicants filed a notice of appeal and a main application (CACA 154 of 2023) seeking an injunction over the advance payment bonds, and brought this application for an interim injunction pending that determination. They alleged fresh demands had been made after the ruling. The 1st to 3rd respondents objected that the notice of appeal was never validly served on them and that they had made no new demand. The demand notices relied upon were in fact issued by UAP against the applicants under personal and general counter-indemnities. A related summary suit (Civil Suit No. 251 of 2023) was pending in the High Court, and HCCS No. 0022 of 2022 remained undetermined.

Issues

  1. Whether there was a valid Notice of Appeal before the Court of Appeal as against the 1st to 3rd respondents, given the alleged failure of service under rule 78.
  2. Whether the 1st to 3rd respondents had made a demand on the advance payment bonds so as to necessitate an interim injunction restraining payment.
  3. Whether an interim injunction against the 4th respondent should issue pending determination of the main application.

Orders

  • The preliminary objections raised by counsel for the 1st, 2nd and 3rd respondents succeed.
  • The application is dismissed.
  • Each party shall bear their own costs of the application.

Rules and key headnotes

Appeals — Notice of Appeal — Service under Court of Appeal Rules r.78
Where a notice of appeal states the addresses of persons to be served, and those persons gave an address for service in the High Court proceedings and gave no other address, the notice must be served at those stated addresses within seven days of lodging; service effected elsewhere does not constitute valid service under rule 78.
Injunctions — Injunction pending appeal — Requirement of a valid appeal
Without a valid notice of appeal, there is no appeal within the meaning of the Court of Appeal Rules, and an application for an injunction under rule 6(2)(b) pending appeal cannot be entertained or sustained against the party against whom no valid appeal exists.
Demand guarantees — Payment on bonds — Fraud and unconscionability exception
Payment on demand guarantees or advance payment bonds may only be restrained where fraud or unconscionability in the call is established; a demand by an insurer against an indemnifier under a counter-indemnity is distinct from a demand on the underlying bond.
Abuse of process — Interlocutory appeals — Exhaustion of High Court remedies
Where a temporary injunction has been denied and the main suit remains undetermined on its merits, pursuing an injunction pending appeal over the interlocutory order is to be discouraged as vexatious and an abuse of the court's process; parties should exhaust their remedies in the lower court.

Legislation cited (5)

Full judgment

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Hydro Uganda Limited and 3 Others v Rwenzori Hydro (pty) Limited and Others (Civil Appeal 155 of 2023; Civil Application 30 of 2023) [2023] UGCA 155 (25 May 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.