Liaison Financial Services Limited v SDS & Company Certified Public Accountants (Miscellaneous Application 2160 of 2024)

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

The court held that the arbitration agreement between the applicant and the pension scheme became incapable of performance once liquidation commenced. The Insolvency Act prohibits continuation of proceedings against a company in liquidation and provides its own dispute resolution mechanism. However, the application was premature because the liquidator had not completed verification of the claimed debt. The court directed the liquidator to complete adjudication of the claim and dismissed the application without prejudice to the applicant's right to seek court directions if the liquidator rejects the claim.

Outcome

Application dismissed as premature with directions for completion of debt verification process

Facts

Liaison Financial Services Ltd administered the Uganda Communications Employees' Contributory Pension Scheme from 2005 under agreements entitling it to administration fees. As of December 2016, the applicant claimed outstanding fees of UGX 2,022,412,000, later increasing to UGX 3,367,398,083. SDS & Company was appointed interim administrator in March 2023 and subsequently liquidator. Upon reviewing the scheme's accounts, the liquidator found no supporting evidence to warrant payment of the claimed fees and noted the scheme had already paid UGX 2,820,381,248 in administration fees. The liquidator wrote back the claimed amount and referred the matter to the regulator. The applicant submitted a formal proof of debt claim to the liquidator. The Auditor General advised the liquidator to provide evidence that creditors agreed to the write-back. The liquidator had not completed verification when the applicant brought this application seeking declaration as a creditor and immediate payment.

Issues

1. Whether the court has jurisdiction to entertain the matter in light of an arbitration clause in the administration agreements.
2. Whether the applicant has proved an existing debt against the scheme in liquidation.
3. What remedies are available to the parties.

Orders

• The preliminary objection based on the arbitration clause is overruled.
• The application is dismissed.
• The applicant is directed to submit justification for its claim to the respondent by 30th November 2024.
• The respondent shall respond to the claim by 31st December 2024.
• The respondent is directed to file a copy of its response in court by 10th January 2025.
• In the event the respondent is not satisfied with the applicant's claim, the respondent should seek court directions in accordance with Section 117(1) of the Insolvency Act.
• Each party shall bear their own costs.

Rules and key headnotes

Legislation cited (26)

• Judicature Act s.33
• Judicature Act s.38
• Civil Procedure Act Cap. 282 s.98
• Uganda Retirement Benefits Regulatory Authority Act Cap. 232 s.32(1)
• Uganda Retirement Benefits Regulatory Authority Act Cap. 232 s.32(2)
• Uganda Retirement Benefits Regulatory Authority Act Cap. 232 s.78
• Insolvency Act Cap. 108 s.7
• Insolvency Act Cap. 108 s.8
• Insolvency Act Cap. 108 s.9
• Insolvency Act Cap. 108 s.9(2)
• Insolvency Act Cap. 108 s.10
• Insolvency Act Cap. 108 s.97(1)(a)
• Insolvency Act Cap. 108 s.97(1)(c)
• Insolvency Act Cap. 108 s.117(1)
• Insolvency Regulations SI No. 36 of 2013 r.172(1)
• Insolvency Regulations SI No. 36 of 2013 r.172(2)
• Insolvency Regulations SI No. 36 of 2013 r.176(9)
• Insolvency Regulations SI No. 36 of 2013 r.179(1)
• URBRA Regulations SI No. 44 of 2020 r.17-32
• Civil Procedure Rules SI 71-1 Order 6 r.28
• Civil Procedure Rules SI 71-1 Order 52 r.1
• Civil Procedure Rules SI 71-1 Order 52 r.2
• Civil Procedure Rules SI 71-1 Order 52 r.3
• Arbitration and Conciliation Act Cap. 5 s.3(1)
• Arbitration and Conciliation Act Cap. 5 s.5(1)
• Arbitration and Conciliation Act Cap. 5 s.9

Cases cited (5)

• Uganda Telecom Ltd v ZTE Corporation (Supreme Court Civil Appeal No. 3 of 2017)
• Shimizu Konoike Joint Venture v Abubaker Technical Services Limited (Miscellaneous Application No. 436 of 2024)
• Dickson Muyambi v Vivo Energy (U) Limited (Civil Suit No. 112 of 2019)
• The Republic of Uganda and Rift Valley Railways (Uganda) Limited and RVR Investments (PTY) Limited and Ku Railways Holdings Limited Case No.CL.2020-000477
• Buchier & Anor (as joint liquidators of Leyland Daf Ltd Vs Talbot & Anor (as joint administrative receivers of Leyland Daf Ltd) & Others [2004] 1 All ER 1289 being UKHL 9

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