Wakilii

Microfinance Support Centre Ltd v Kurbstone Investments (U) Limited and Others (Miscellaneous Application 2153 of 2025)

High Court · [2026] UGCOMMC 199 · 2026 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside order referring parties to arbitration and to reinstate dissolved company to Companies Register
Decision
Application partly allowed; arbitration referral order set aside; underlying civil suit remitted for hearing; application for reinstatement of dissolved company dismissed

Observed later treatment

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Holding

The Court held that an arbitration agreement becomes inoperative and incapable of performance when one party is a dissolved company. The order referring parties to arbitration was set aside because the first respondent had been dissolved before the order was made. However, the Court declined to reinstate the dissolved company to the Companies Register, finding no exceptional circumstances or compelling public interest to justify judicial revival of a company dissolved following voluntary liquidation.

Outcome

Application partly allowed; arbitration referral order set aside; underlying civil suit remitted for hearing; application for reinstatement of dissolved company dismissed

Facts

The applicant entered into a tenancy agreement dated 24th July 2023 with the first respondent company for business premises and paid USD 24,240 as rent and security deposit. A dispute arose and the applicant filed Civil Suit No. 0388 of 2024. The first respondent objected to jurisdiction based on an arbitration clause in the tenancy agreement. On 5th June 2025, the Court stayed the suit and referred the parties to arbitration. When the applicant attempted to initiate arbitration, it discovered that the first respondent had been dissolved on 27th May 2024, following a voluntary winding-up resolution passed on 20th December 2023. The applicant contended that the dissolution was not disclosed during proceedings and that the arbitration agreement had become inoperative. The second respondent was the sole shareholder and director of the dissolved company.

Issues

  1. Whether the Application raises grounds for review of an order dated 5th June, 2025 referring the parties to arbitration.
  2. Whether there are sufficient grounds for setting aside the order dated 5th June, 2025 referring the parties to arbitration.
  3. Whether the 1st respondent should be reinstated to the Register of Companies.

Orders

  • The Court order dated 5th June, 2025 referring the parties to arbitration is hereby set aside.
  • High Court Civil Suit No. 0388 of 2024 is set for hearing on the 26th day of March, 2026.
  • No orders as to costs.

Rules and key headnotes

Civil Procedure — Review of Judgment — Discovery of New and Important Matter — Constructive Notice
Where a company's voluntary liquidation is publicised through Gazette notice and newspaper publication as required by the Insolvency Act, the law imputes constructive notice to creditors and the public at large, and a party cannot avoid the legal consequences of such publication by asserting lack of actual knowledge; accordingly, the fact of dissolution does not constitute new and important matter within the meaning of Order 46 of the Civil Procedure Rules where the applicant has not demonstrated that despite the exercise of due diligence it could not have discovered the liquidation before the impugned order was made.
Arbitration & ADR — Arbitration Agreement — Operability — Effect of Dissolution of Party
An arbitration agreement becomes inoperative and incapable of being performed within the meaning of sections 5(1)(a) and 9 of the Arbitration and Conciliation Act where one of the parties to the agreement has been dissolved and no longer has legal existence.
Civil Procedure — Inherent Powers of Court — Setting Aside Orders — Sufficient Cause
The Court has inherent power under section 98 of the Civil Procedure Act to set aside its own order where sufficient cause is shown, including where an order referring parties to arbitration was made without knowledge that one party had been dissolved, rendering the arbitration agreement inoperative and incapable of performance.
Company Law — Dissolution — Effect of Dissolution — Legal Capacity
Once a company is dissolved, it is dead and no longer exists; accordingly, a dissolved company cannot be sued or hold any property.
Company Law — Restoration to Register — Dissolved Company — Exceptional Circumstances
There is no statutory power to restore a company which has been dissolved following a liquidation process; the Court may in exceptional circumstances use its inherent jurisdiction to restore a dissolved company, but such power should be exercised exceptionally where the Court is convinced that there are good commercial reasons and very strong public interest considerations, not merely private commercial disputes.

Legislation cited (13)

Cases cited (7)

Full judgment

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Microfinance Support Centre Ltd v Kurbstone Investments (U) Limited and Others (Miscellaneous Application 2153 of 2025) [2026] UGCommC 199 (14 February 2026)
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.