Wakilii

Junaco (T) Limited and 2 Others v DFCU Bank Limited (Miscellaneous Application 27 of 2023)

High Court · [2022] UGCOMMC 100 · 2022 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for stay of execution pending appeal from a partial judgment in a summary suit arising from loan facility agreements
Decision
Application dismissed with costs; execution of partial decree may proceed pending appeal

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division dismissed an application for stay of execution pending appeal. The applicants, who had obtained leave to appeal a partial judgment for UGX 5,478,421,071, failed to establish essential requirements: they provided no draft memorandum of appeal to assess likelihood of success, failed to demonstrate substantial loss beyond ordinary consequences of losing judgment, and offered no security for due performance of the decree. The court held that satisfaction of a money decree does not ordinarily render an appeal nugatory where the respondent is not impecunious, and execution would not inflict greater hardship than granting the stay.

Outcome

Application dismissed with costs; execution of partial decree may proceed pending appeal

Facts

On 20th March 2018, the first applicant was granted three banking facilities by the respondent bank totalling approximately UGX 8.8 billion (including a Performance Guarantee Limit, an Import Loan Facility, and an Invoice Discounting Facility) to supply water meters to National Water and Sewerage Corporation. The facilities were secured by fixed and floating charges over the first applicant's assets and personal guarantees of the second and third applicants. The respondent, considering the applicants to have defaulted, filed a summary suit seeking recovery of UGX 12,817,499,272. Following an application for leave to defend, the court entered a partial judgment for UGX 5,478,421,071 in favour of the respondent on 25th November 2022 and granted leave to defend the remainder. The applicants filed a notice of appeal on 30th November 2022 and applied for a stay of execution, while the respondent initiated execution proceedings (EMA No. 003 of 2023) and garnishee proceedings (MA No. 002 of 2023).

Issues

  1. Whether the applicants satisfied the conditions under Order 43 rule 4(3) of the Civil Procedure Rules for the grant of a stay of execution pending appeal.
  2. Whether the appeal has a likelihood of success.
  3. Whether the appeal would be rendered nugatory if a stay is not granted.
  4. Whether there is an imminent threat of execution of the decree.
  5. Whether the applicants would suffer substantial loss if the stay is not granted.
  6. Whether the applicants provided security for due performance of the decree.

Orders

  • Application for stay of execution dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Civil Procedure — Stay of Execution — Requirements under Order 43 Rule 4(3) of the Civil Procedure Rules
An applicant seeking a stay of execution pending appeal must satisfy the conditions set out in Order 43 rule 4(3) of the Civil Procedure Rules: furnishing proof that substantial loss may result unless the stay is granted; that the application has been made without unreasonable delay; and that the applicant has given security for due performance of the decree as may ultimately be binding upon him.
Civil Procedure — Stay of Execution — Likelihood of Success on Appeal
The court must be satisfied that the prospects of the appeal succeeding are not remote but that there is a realistic chance of succeeding. More is required than a mere possibility of success. There should be a sound, rational basis, founded on the facts and the law, and a measure of certainty justifying the conclusion that the appellate court will differ from the court whose judgment has been appealed against.
Civil Procedure — Stay of Execution — Substantial Loss — Meaning and Proof
Substantial loss does not represent any particular size or amount but refers to any loss, great or small, that is of real worth or value as distinguished from a loss that is merely nominal. However, substantial loss cannot mean the ordinary loss to which every judgment debtor is necessarily subjected when he or she loses his or her case and is deprived of property in consequence. The applicant must establish factors showing that execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal.
Civil Procedure — Stay of Execution — Money Decrees — Presumption Against Stay
Satisfaction of a money decree does not ordinarily pose the danger of rendering a pending appeal nugatory, where the respondent is not impecunious, as the remedy of restitution is available to the applicant in the event the appeal is allowed. The presumption is that payment made to the respondent in execution of the decree will be reversible in the event of the applicant succeeding on appeal.
Civil Procedure — Stay of Execution — Security for Due Performance of Decree
In granting an order of stay of execution pending appeal, the court must balance the need to uphold the respondent's right to be protected from the risk that the appellant may not be able to satisfy the decree, with the appellant's right to access the courts. Furnishing security for due performance of a money decree denotes providing or depositing the disputed amount. Courts have been reluctant to order security for the entire decretal amount as it is likely to stifle appeals, and have instead preferred to order security for costs.

Legislation cited (7)

Cases cited (11)

  • Lawrence Musiitwa Kyazze v Eunice Businge (Supreme Court Civil Application No. 18 of 1990)
  • Kyambogo University v Prof. Isaiah Omolo Ndiege (Court of Appeal Miscellaneous Civil Application No. 341 of 2013)
  • Theodore Sekikubo and Four Others v Attorney General (Constitutional Application No. 3 of 2014)
  • China Henan International Corporation Group Company Limited v Justus Kyabahwa (Court of Appeal Civil Application No. 101 of 2020)
  • Mabu Commodities Limited v Nakitende (High Court Miscellaneous Application No. 530 of 2020)
  • Andrew Kisawuzi v Dan Oundo Malingu (High Court Miscellaneous Application No. 467 of 2013)
  • Twinamasiko Onesmus v Agaba Aisa and Another (High Court Election Petition No. 702 of 2021)
  • Tropical Commodities Supplies Ltd and Others v International Credit Bank Ltd (in Liquidation) [2004] 2 EA 331
  • Alice Wambui Nganga v. John Ngure Kahoro and another, ELC Case No. 482 of 2017 (at Thika); [2021] eKLR
  • DFCU Bank Ltd v Dr. Ann Persis Nakate Lussejere (Court of Appeal Civil Appeal No. 29 of 2003)
  • Erinford Properties Ltd v Cheshire County Council [1974] 412 All ER 448

Full judgment

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Junaco (T) Limited and 2 Others v DFCU Bank Limited (Miscellaneous Application 27 of 2023) [2022] UGCommC 100 (29 March 2022)
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.