Wakilii

Mulagwe v Bank of Uganda (Civil Miscellaneous Appeal 27 of 2022)

High Court · [2023] UGCOMMC 66 · 2023 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from ruling of Deputy Registrar granting garnishee order absolute
Decision
Garnishee order absolute for UGX 168,482,970 upheld; Appellant's claim for enhanced amount dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that Bank of Uganda lawfully converted foreign currency seized from judgment debtor into Uganda Shillings under its statutory mandate to avoid demonetization losses. The applicable exchange rate is the rate at the time of breach of contract (2003), not the date of the garnishee order nisi. Appeal dismissed; garnishee order absolute for UGX 168,482,970 upheld.

Outcome

Garnishee order absolute for UGX 168,482,970 upheld; Appellant's claim for enhanced amount dismissed

Facts

The Appellant obtained judgment against Lanex Forex Bureau Limited for USD 160,000 plus taxed costs of USD 12,800. In November 2005, Bank of Uganda seized various foreign currencies from Lanex Forex Bureau's premises totaling approximately UGX 200,000,000. In December 2013, following a court restraining order, Bank of Uganda converted the foreign currencies to Uganda Shillings at the prevailing rate, resulting in UGX 168,482,970. The Appellant obtained a garnishee order nisi seeking to attach these funds. The Deputy Registrar granted a garnishee order absolute for UGX 168,482,970. The Appellant appealed, arguing the conversion was illegal and that the amount should be enhanced to UGX 220,539,678 based on the exchange rate at the date of the garnishee order nisi in 2022.

Issues

  1. Whether the Respondent illegally converted foreign currency held pursuant to court order into Uganda Shillings.
  2. Whether the appropriate exchange rate for conversion was the rate at the date of conversion (2014) or the rate at the date of the garnishee order nisi (2022).
  3. Whether the learned Registrar erred in awarding UGX 168,482,970 instead of UGX 220,539,678.

Orders

  • Appeal dismissed.
  • Decision of the learned Deputy Registrar upheld.
  • Garnishee order absolute for UGX 168,482,970 confirmed.
  • Costs of the appeal awarded to the Respondent.

Rules and key headnotes

Banking & Finance — Central Bank Powers — Currency Conversion — Statutory Mandate
Under Section 17(1) and (2) of the Bank of Uganda Act Cap 51, the Bank of Uganda is mandated to express, record and settle all monetary obligations in Uganda Shillings, and has lawful authority to convert foreign currency it holds into Uganda Shillings in exercise of its statutory functions.
Banking & Finance — Currency Conversion — Exchange Rate — Date of Application
Where a central bank holds foreign currency seized from a judgment debtor pursuant to its supervisory role, the applicable exchange rate for conversion to local currency is the rate at the time of the breach of contract giving rise to the judgment debt, not the rate at the date of enforcement proceedings, absent illegality, fraud or malice on the part of the central bank.
Administrative Law — Central Bank Independence — Constitutional Mandate
Under Article 162 of the Constitution of Uganda, the Bank of Uganda has autonomous powers in the exercise of its functions including currency management and is not subject to direction, and may lawfully convert foreign currency to avoid demonetization losses in exercise of its mandate to maintain monetary stability.
Civil Procedure — Appeals — Time Limits — Appeals from Registrar
Under Section 79(1)(b) of the Civil Procedure Act Cap 71, an appeal against the decision of a Registrar must be entered within seven days from the date of the order of the Registrar.

Legislation cited (8)

Cases cited (1)

  • Di Ferdinando v Simon, Smits [1920] 3 KB 409

Full judgment

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

Mulagwe v Bank of Uganda (Civil Miscellaneous Appeal 27 of 2022) [2023] UGCommC 66 (8 September 2023)
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.