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Liberty Construction Company Limited & Another v African Development Bank & Another (Miscellaneous Application 877 of 2015)

High Court · [2016] UGCOMMC 287 · 2016 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Judicial review application arising from Civil Suit No. 220 of 2011, seeking to quash administrative sanctions imposed by the African Development Bank
Decision
Application dismissed with costs to the respondents. The applicants may seek redress in another forum.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that it has residual jurisdiction to inquire into disputes involving the African Development Bank in its commercial activities, as diplomatic immunity is not absolute where a regional financial institution engages in market activities that affect citizens. However, the court dismissed the application on grounds that the sanctions proceedings were not directly related to the matter sub judice in Civil Suit No. 220 of 2011, which concerned post-termination contractual obligations, not the alleged forgery of bank guarantees that formed the basis of the ADB sanctions. The second respondent, acting in official capacity, retained absolute immunity.

Outcome

Application dismissed with costs to the respondents. The applicants may seek redress in another forum.

Facts

The first applicant, Liberty Construction Company Ltd, entered a construction contract with the Ugandan government in 2007 to execute works on four fish landing centres. The contract was terminated in September 2009 on grounds of fundamental breach after bank guarantees submitted by the applicants were found by Orient Bank to be forgeries. The applicants filed Civil Suit No. 220 of 2011 against the Attorney General claiming post-termination payments totalling over UGX 12 billion. That suit remains pending. In 2015, the African Development Bank, which had funded the contract, initiated sanction proceedings against the applicants based on the alleged forged guarantees. Despite being notified and given opportunities to participate, the applicants refused on grounds that the matter was sub judice. In April 2015, the ADB Sanctions Commissioner barred the applicants from ADB-funded projects for three years. The applicants then brought this judicial review application seeking to quash the sanctions decision, arguing it was illegal and sub judice.

Issues

  1. Whether the High Court has jurisdiction to hear an application made against the African Development Bank given that it enjoys diplomatic immunity.
  2. Whether the Respondents acted illegally by conducting sanction proceedings on a matter that was sub judice before the High Court in Civil Suit No. 220 of 2011.

Orders

  • Application dismissed.
  • Costs to the respondents.

Rules and key headnotes

Diplomatic Immunity — Regional Financial Institutions — Commercial Activities Exception
Diplomatic immunity granted to regional financial institutions such as the African Development Bank is not absolute. National courts retain residual jurisdiction to inquire into disputes involving such institutions where they engage in commercial activities in the marketplace that directly affect citizens, particularly where such activities involve lending, borrowing, and development projects that impact individual livelihoods and rights.
Diplomatic Immunity — Individual Officers Acting in Official Capacity
Individual diplomatic agents and officers of international organizations who act within their official capacity retain absolute immunity from being sued in their personal capacity, unless there is proof that they acted outside their official capacity or abused their power.
Sub Judice Rule — Remote Connection to Pending Proceedings
The sub judice rule protects the integrity of court proceedings by preventing actions that would affect the outcome of pending cases. However, where administrative proceedings by a third party concern a matter that is factually and legally remote from the dispute before the court, such proceedings do not violate the sub judice rule and do not constitute an illegality justifying judicial review.
Grounds for Review — Illegality and Connection to Pending Suit
An applicant seeking judicial review of an administrative decision on grounds of illegality and violation of the sub judice rule must establish that the impugned decision directly impacts the pending court proceedings either overtly or covertly. Where the administrative decision concerns a distinct factual and legal issue not before the court, the ground of illegality will not be established.
Independence of the Judiciary — Protection from External Interference
The principle of independence of the judiciary ensures that courts arrive at decisions in a fair and just manner, free from extraneous overt or covert influences. Once a dispute is before a competent court, other persons, institutions, or organs ought not to do anything that would affect the outcome of the pending proceedings. However, this protection applies only where there is a direct connection between the external action and the matter before the court.

Legislation cited (9)

Cases cited (4)

  • Mbabazi Rovence Natukunda and Loyce Kahunda v Uganda (Criminal Application No. 47 of 2012)
  • Mucunguzi Myers v Sarah Kulata Basangwa (Miscellaneous Application No. 1329 of 2014)
  • Council of Civil Service Unions v Minister for Civil Service [1984] 3 All ER 935
  • Tononoka Steels Ltd v The Eastern and Southern African Trade and Development Bank [2000] 2 EALR 536

Full judgment

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

Liberty Construction Company Limited & Another v African Development Bank & Another (Miscellaneous Application 877 of 2015) [2016] UGCommC 287 (13 June 2016)
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.