Wakilii

IN RE Uganda Telecom Limited (In Administration) and IN RE Application by UCEPS to vary Deed of Administration of Uganda Telecom Limited (COMPANY CAUSE NO. 30 OF 2019)

High Court · [2020] UGHCCD 180 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by creditor to vary deed of administration and replace administrator of company in administration
Decision
Official Receiver replaced as administrator; new administrator appointed until November 2020

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court declined to vary the administration deed under section 167 of the Insolvency Act 2011 for failure to demonstrate a creditors' resolution. Exercising discretion under section 174(1)(c), the court removed the Official Receiver as administrator and appointed senior counsel Ruth Sebatindira as replacement administrator, considering her extensive insolvency practice experience, leadership record, and ability to work independently in the interests of all stakeholders.

Outcome

Official Receiver replaced as administrator; new administrator appointed until November 2020

Facts

Uganda Telecom Limited was in administration under the Official Receiver, Bemanya Twebaze. Uganda Communications Employees' Contributory Pension Scheme, a creditor of UTL, applied to vary the deed of administration and replace the administrator with Nicholas Mwasame. The Official Receiver did not oppose his removal but contended that the court should choose from the full list of registered insolvency practitioners. The administration of UTL had been extended until November 2020. No creditors' resolution for variation of the administration deed had been passed at the time of filing the application.

Issues

  1. Whether the applicant satisfied the statutory requirements under section 167 of the Insolvency Act for variation of an administration deed.
  2. Whether the court should exercise its discretion under section 174(1)(c) of the Insolvency Act to replace the administrator of Uganda Telecom Limited.
  3. Who should be appointed as the replacement administrator of Uganda Telecom Limited.

Orders

  • Application to vary administration deed under section 167 of the Insolvency Act dismissed.
  • Official Receiver (Bemanya Twebaze) removed as administrator of Uganda Telecom Limited.
  • Senior Counsel Ruth Sebatindira appointed as new administrator of Uganda Telecom Limited for the remaining period until November 2020.
  • New administrator directed to ensure effective and timely administration of UTL and return it to normal operation and profitability by end of administration period.
  • Each party to bear its own costs.

Rules and key headnotes

Company Law — Administration — Variation of Administration Deed — Statutory Requirements
Under section 167 of the Insolvency Act 2011, an application by a creditor for variation of an administration deed can only be entertained by the court if such variation is pursuant to a resolution passed at a creditors' meeting.
Company Law — Administration — Removal and Appointment of Administrator — Court's Discretion
Section 174(1)(c) of the Insolvency Act 2011 confers wide discretion on the court to remove and appoint a new administrator, and such appointment ought to take into account the processes by which an administrator is ordinarily appointed and the requirements of Regulation 162(1) of the Insolvency Regulations.
Company Law — Administration — Selection of Administrator — Criteria
In selecting a replacement administrator, the court considers the administrator's independence, experience in insolvency practice, leadership record, and ability to work objectively in the interests of all stakeholders, and is not bound by a creditor's choice of preferred candidate.
Company Law — Administration — Purpose and Conduct
The purpose of administration is to manage the affairs of the company in distress taking account of the interests of all stakeholders including all creditors, with the view of turning the affairs of the company back to normal and profitability, and the administrator is required to work independently and ensure fast-tracking the return of the company to normalcy within the administration timeframe.

Legislation cited (3)

Full judgment

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IN RE Uganda Telecom Limited (In Administration) and IN RE Application by UCEPS to vary Deed of Administration of Uganda Telecom Limited (COMPANY CAUSE NO. 30 OF 2019) [2020] UGHCCD 180 (2 January 202
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.