Wakilii

Masaka Construction Co. Ltd v Uganda Revenue Authority (Miscellaneous Application No. 94 of 2016)

High Court · [2016] UGCOMMC 40 · 2016 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from Civil Suit No. 104 of 2016
Decision
Application for temporary injunction refused; applicant may pursue remedies under the East African Community Customs Management Act or against the seller of the goods

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for a temporary injunction restraining Uganda Revenue Authority from disposing of seized agricultural chemicals. The applicant purchased goods from the importer after they had been seized as restricted goods imported in contravention of regulatory requirements. The East African Community Customs Management Act 2004 gives the Commissioner powers to deal with seized restricted goods and takes precedence over domestic legislation. The proper party to challenge the seizure is the importer who committed the breach, not a subsequent purchaser. The application was dismissed as frivolous for lacking a prima facie case with probability of success.

Outcome

Application for temporary injunction refused; applicant may pursue remedies under the East African Community Customs Management Act or against the seller of the goods

Facts

On 4 December 2015, Masaka Construction Co. Ltd entered a sale agreement with Orbit Chemical Industries Ltd to purchase eight containers of agricultural chemicals (Glyphosate Salt 480 G/L) for UGX 400,000,000. The goods were under customs control pending tax clearance. The applicant undertook to pay assessed taxes and demurrage. Uganda Revenue Authority issued a public notice on 19 January 2016 declaring forfeiture of the goods on the ground that they were restricted goods imported in contravention of the Control of Agricultural Chemicals Act and the East African Community Customs Management Act. The importer had failed to obtain requisite registration, packing and labelling before importation. The applicant sought a temporary injunction to restrain URA from disposing of the goods pending determination of the main suit in which the applicant claimed ownership and challenged the legality of the seizure.

Issues

  1. Whether the applicant established a prima facie case with a probability of success for the grant of a temporary injunction.
  2. Whether the applicant would suffer irreparable injury that cannot be adequately compensated by an award of damages.
  3. Where the balance of convenience lies between the parties.
  4. Whether the applicant has locus standi to challenge the Uganda Revenue Authority's seizure of goods originally imported by a third party.
  5. Whether the High Court has jurisdiction to restrain the Commissioner Customs from exercising statutory powers under the East African Community Customs Management Act 2004 over restricted goods seized for contravention of importation regulations.

Orders

  • Application dismissed.
  • Costs awarded to the Respondent.

Rules and key headnotes

Customs Management — Statutory Powers — Precedence of East African Community Law
The East African Community Customs Management Act 2004 takes precedence over domestic legislation with respect to any matter to which its provisions relate, including the seizure and disposal of restricted goods imported in contravention of regulatory requirements.
Sale of Goods — Restricted Goods — Transfer of Title
A person who purchases goods that have been seized as restricted goods under the East African Community Customs Management Act acquires no greater rights than the importer possessed, and the purchaser cannot cure the importer's breach of importation regulations or challenge statutory forfeiture proceedings directed at the importer's contravention.
Customs Management — Restricted Goods — Locus Standi
Where the Commissioner Customs has seized restricted goods on the ground that the importer contravened importation regulations, a subsequent purchaser lacks locus standi to challenge the forfeiture in proceedings other than those expressly contemplated by the East African Community Customs Management Act, and the proper party is the importer who committed the contravention.
Temporary Injunctions — Prima Facie Case — Frivolous or Vexatious Proceedings
An application for a temporary injunction is frivolous where it seeks to restrain a statutory authority from exercising powers expressly conferred by legislation that takes precedence over domestic law, and where the applicant is not the proper party to the proceedings contemplated by the governing statute.
Customs Management — Restricted Goods — Forfeiture and Disposal
Under section 216(2) of the East African Community Customs Management Act 2004, if seized goods are restricted goods imported in contravention of the Act, they shall not be released to a claimant but may be disposed of in such manner as the Commissioner may direct, and the provisions for institution of proceedings for recovery do not apply to prohibited or restricted goods.
Customs Management — Remedies for Claimants — Application to Commissioner or Council
The remedy of a claimant whose goods have been seized as restricted goods under the East African Community Customs Management Act is to apply to the Commissioner or to the Council established under the Treaty Establishing the East African Community for release under section 218, not to commence proceedings in the High Court to restrain the Commissioner's statutory powers.

Legislation cited (14)

Cases cited (10)

  • Giella v Cassman Brown & Co Ltd [1973] EA 358
  • American Cyanamid v Ethicon Ltd [1975] 2 WLR 316
  • David Luyiga v Stanbic Bank (U) Ltd (Miscellaneous Application No. 202 of 2012)
  • Kiyimba Kaggwa v Hajj Nasser Katende [1985] HCB 43
  • Godfrey Sekitoleko and 4 Others v Seezi Peter Mutabazi and Two Others [2001-2005] HCB 80
  • Kampala Nissan Uganda Ltd v Uganda Revenue Authority (Civil Appeal No. 7 of 2009)
  • Victor Construction Works Ltd v Uganda National Roads Authority (Miscellaneous Application No. 601 of 2010)
  • Victor Construction Works Ltd v Uganda National Roads Authority (Miscellaneous Application No. 61 of 2012)
  • Sargent v Patel (1949) 16 EACA 63
  • EA Industries v Trufoods [1972] EA 420

Full judgment

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

Masaka Construction Co. Ltd v Uganda Revenue Authority (Miscellaneous Application No. 94 of 2016) [2016] UGCommC 40 (6 May 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.