Wakilii

NICOZ Uganda Ltd v Bank of Uganda & Anor (Civil Suit No. 372 of 2009)

High Court · [2014] UGCOMMC 201 · 2014 Preliminary Objection Upheld AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Preliminary objection to plaintiff's suit for enforcement of contractual rights
Decision
Suit dismissed for failure to disclose a cause of action against the proper parties

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the plaint disclosed no cause of action against the defendants. The defendants, acting as liquidator and receiver under the Financial Institutions Act, signed the share sale agreement on behalf of Greenland Bank Ltd (In Liquidation) and FIBA (U) Ltd (In Receivership), not in their personal capacities. The proper parties to the suit were the entities in liquidation and receivership, as distinct legal entities, not the defendants executing statutory duties. The preliminary objection was upheld and the suit dismissed with costs.

Outcome

Suit dismissed for failure to disclose a cause of action against the proper parties

Facts

The plaintiff, NICOZ Uganda Ltd, filed suit against the defendants claiming Uganda Shillings 300,000,000 as compensation relating to land in Masaka District. The plaintiff alleged that on 27 October 2000, the first defendant, acting as liquidator of Greenland Bank Ltd (In Liquidation), and the second defendant, acting as receiver of FIBA (U) Ltd (In Receivership), sold all shares held by those entities in Greenland Insurance Company (99.78%) to the plaintiff pursuant to a share sale agreement. The defendants raised a preliminary objection contending that they were not privy to the contract sued upon, as they had signed the agreement in their statutory capacities on behalf of the entities in liquidation and receivership, not as personal contracting parties.

Issues

  1. Whether the plaintiff has a cause of action against the defendants in light of whether the defendants were privy to the contract sued upon.
  2. Whether the plaint discloses a cause of action against the defendants.
  3. Whether a liquidator and receiver acting under statutory authority are personally liable for contractual obligations entered into on behalf of entities in liquidation or receivership.

Orders

  • Preliminary objection upheld.
  • Suit dismissed with costs to the defendants.

Rules and key headnotes

Civil Procedure — Cause of Action — Test for Disclosure
The question of whether a plaint discloses a cause of action must be determined upon perusal of the plaint alone together with any attachments thereto, with the assumption that the facts pleaded or implied therein are true.
Civil Procedure — Cause of Action — Elements Required
To establish a cause of action, the plaintiff must show that he or she enjoyed a right, the right was violated, and the defendant is liable for the violation.
Banking & Finance — Liquidators and Receivers — Contractual Liability
A liquidator or receiver acting under the Financial Institutions Act who executes a contract on behalf of a financial institution in liquidation or receivership is not personally liable as a party to that contract. The proper parties to be sued are the entities in liquidation or receivership, which remain distinct legal entities.
Banking & Finance — Central Bank Powers — Execution of Instruments
Under section 31(2)(d) of the Financial Institutions Act, the Central Bank has power to execute any instrument in the name of a financial institution when it has taken possession of that institution, but this does not make the Central Bank a party to contracts so executed.
Contract Law — Privity of Contract — Parties to a Contract
Only parties to a contract may be sued for breach of that contract. Where an agent or statutory officer signs a contract on behalf of a principal, the principal is the party to the contract and bears liability, not the agent or officer executing the agreement.

Legislation cited (5)

Cases cited (8)

  • Robert Mwesigwa and 135 Others v Bank of Uganda (High Court Civil Suit No. 588 of 2003)
  • Attorney General v Oluoch [1972] EA 362
  • Jerav Shariff & Co v Chotai Fancy Stores [1960] EA 373
  • Ismail Serugo v Kampala City Council and the Attorney General (Constitutional Appeal No. 2 of 1998)
  • Auto Garage & others v Motokov (No 3) [1971] EA 514
  • Hasmani v National Bank of India Ltd [1937] 4 EACA 55
  • Sullivan v Ali Mohammed [1959] EA 239
  • Ngamita Peroza & Others v Bank of Uganda The Liquidator of The Co-operative Bank Ltd (High Court Miscellaneous Application No. 695 of 2002)

Full judgment

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

NICOZ Uganda Ltd v Bank of Uganda & Anor (Civil Suit No. 372 of 2009) [2014] UGCommC 201 (9 May 2014)
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.