Wakilii

Maersk Agency Uganda Limited v Munywevu & Another (Miscellaneous Application 1177 of 2021)

High Court · [2022] UGHC 153 · 2022 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application arising from Civil Suit No. 0528 of 2021 disputing the jurisdiction of the High Court based on an exclusive foreign jurisdiction clause
Decision
Application challenging jurisdiction dismissed; main suit to proceed before the High Court Commercial Division

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the application was filed within time but the applicant submitted to the jurisdiction of the High Court by failing to file a notice of intention to defend alongside its jurisdictional challenge. The exclusive jurisdiction clause designating the English High Court was unenforceable because it was a hybrid clause imposed on a consumer-like party of weaker bargaining power, and enforcing it would effectively deprive the respondents of their day in court due to prohibitive costs of foreign litigation relative to the low value of the dispute.

Outcome

Application challenging jurisdiction dismissed; main suit to proceed before the High Court Commercial Division

Facts

The applicant, a Ugandan subsidiary of an international shipping company, contracted with the first respondent in November 2020 to transport cargo from England to Uganda for the second respondent. The first respondent paid all charges upfront and provided shipping documents. Due to alleged delays by the applicant, goods were not cleared until May 2021, four months late. The applicant then retained the goods claiming UGX 4,219,798 storage charges and USD 9,599.95 port costs. The respondents sued for breach of contract and wrongful detention. The applicant filed this application on 16 September 2021 seeking dismissal for lack of jurisdiction based on an exclusive jurisdiction clause in the bill of lading designating the English High Court. A default judgment had already been entered against the applicant on 1 October 2021 for failure to file a defence.

Issues

  1. Whether the application challenging jurisdiction was filed out of time.
  2. Whether by failure to give notice of intention to defend the proceedings, the applicant submitted to the jurisdiction of the court.
  3. Whether the exclusive foreign jurisdiction clause in the bill of lading should be enforced.

Orders

  • Application dismissed.
  • Costs awarded to the respondents.

Rules and key headnotes

Civil Procedure — Jurisdictional Challenges — Time Limits for Filing
Under Order 9 rule 3(1)(a) and (g) read with Order 8 rule 1(2) of the Civil Procedure Rules and section 34(1)(a) of the Interpretation Act, the time allowed for filing a jurisdictional challenge is fifteen days from the date of service of summons, computed by excluding the day of service and including the day of filing.
Civil Procedure — Jurisdictional Challenges — Mandatory Notice of Intention to Defend
A proper jurisdictional challenge under Order 9 rule 3(1) of the Civil Procedure Rules requires both the filing of a notice of intention to defend the proceedings and an application for a declaration of lack of jurisdiction, both within the time allowed for filing a defence. The conjunction 'and' in the rule must be construed conjunctively, requiring both elements to be satisfied. Failure to file a notice of intention to defend constitutes submission to the court's jurisdiction.
Civil Procedure — Submission to Jurisdiction — Acts Inconsistent with Challenge
Whether a defendant's conduct amounts to submission to jurisdiction is determined by whether the conduct demonstrates an unequivocal, clear and consistent intention to submit. Conduct occurring before intimation of a jurisdictional challenge is more likely to constitute submission; conduct during a pending challenge is unlikely to do so. Applications motivated to forestall default judgment do not constitute submission where filed while a jurisdictional challenge is pending.
Contract Law — Exclusive Jurisdiction Clauses — Hybrid or Asymmetric Clauses
Hybrid or asymmetric jurisdiction clauses, which restrict one party (typically a consumer or weaker party) to suing in a particular foreign jurisdiction while allowing the other party (typically a commercial entity) to commence proceedings in any court of competent jurisdiction, indicate an imbalance of bargaining power and will be scrutinised for manifest injustice or unfairness when enforcement is sought.
Contract Law — Exclusive Jurisdiction Clauses — Manifest Injustice Exception
An exclusive foreign jurisdiction clause will not be enforced where giving effect to it would lead to manifest injustice, including where the cost of litigation in the foreign forum would in all probability exceed the value of the dispute to a prohibitive extent, thereby effectively depriving the plaintiff of their day in court. Manifest injustice is established where one party would be unable to afford to litigate their valid individual claim in the foreign jurisdiction due to the expenses and burdens of foreign litigation.
Contract Law — Exclusive Jurisdiction Clauses — Standard Form Contracts
Courts are more inclined to enforce exclusive jurisdiction clauses in fully negotiated business-to-business agreements than in non-negotiated standard contracts where one party was potentially disadvantaged. Courts will frown upon standard inclusion of foreign forum selection clauses when it is highly foreseeable that the other party will face considerable obstacles in bringing suit in that forum.
Administrative Law — Jurisdiction — Discretion to Decline Jurisdiction
The High Court of Uganda jealously guards its jurisdiction and retains discretion whether or not to order a stay of proceedings even where exclusive jurisdiction is conferred on a foreign court. The court will consider not only whether parties have unequivocally submitted to foreign jurisdiction but also whether it is proper and just for the Ugandan court to entertain the suit. The court will suspend or dismiss proceedings only where enforcement would not lead to manifest injustice or be manifestly contrary to Ugandan public policy, among other exceptions.

Legislation cited (10)

Cases cited (29)

  • Aelf MSN 242 LLC v De Surinaamse Luchtvaart Maatschappij NV [2021] EWHC 3482 (Comm)
  • Sage v Double A Hydraulics Limited [1992] TLR 165
  • Deutsche Bank AG London Branch v Petromena ASA [2015] 1 WLR 4225
  • Zumax Nigeria Ltd v First City Monument plc [2016] EWCA Civ 567
  • Winkler v Shamoon [2016] EWHC 217 (Ch)
  • Rashida Abdul Karim Hanali & Another v Suleimani Adrisi (Miscellaneous Civil Application No. 9 of 2017)
  • Miruvor Ltd v Panama-Globe Steamer Lines SA [2007] 1 HKLRD 804
  • SMAY Investments Ltd v Sachdev [2003] 1 WLR 1973
  • Global Partners Fund Limited v Babcock & Brown Limited [2010] NSWCA 196
  • Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460
  • Donohue v Armco Inc [2001] UKHL 64
  • Satyam Computer Services Ltd v Upaid Systems Ltd [2008] EWCA Civ 487
  • Austrian Lloyd Steamship Company v Gresham Life Assurance Society Limited [1903] 1 KB 249
  • Continental Bank v Aeakos SA [1998] 1 WLR 588
  • Royal Exchange Assurance Corporation v Sjotorsakrings Aktiebolaget Vega [1902] 2 KB 384
  • Euromark Ltd v Smash Enterprises Pty Ltd [2013] EWHC 1627 (QB)
  • Bremen v Zapata Off-Shore Co 407 US (1972)
  • Kirchener & Co v Gruban [1909] Ch 413
  • The Fehmarn [1958] 1 WLR 159
  • Raytheon Aircraft Credit Corporation & Another v Air Al-Faraj Limited [2005] 2 EA 259
  • The Eleftheria [1970] P 94
  • Aratra Potato Co Ltd v Egyptian Navigation Co [1981] 2 Lloyd's Rep 119
  • Uganda Telecom Ltd v Rodrigo Chacon t/a Andes Alpes Trading (Miscellaneous Application No. 37 of 2008)
  • Sebagala Electronic Centre v Kenya National Shipping Lines [1997-01] UCLR 389
  • Wissam v Bharti Airtel Limited (Civil Suit No. 1028 of 2017)
  • Larco Concrete Products Ltd v Transair Ltd [1987] HCB 40
  • Petersen v Boeing Co 715 F 3d 276
  • Adams v Cape Industries [1990] Ch 433
  • Blohn v Desser [1962] 2 QB 116

Full judgment

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

Maersk Agency Uganda Limited v Munywevu & Another (Miscellaneous Application 1177 of 2021) [2022] UGHC 153 (4 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.