Nsimbe Holdings v Attorney General, Inspector General Of Police (Constitutional Petition No. 2 of 2006)

Observed later treatment

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

On a preliminary objection the Constitutional Court held that Nsimbe Holdings Ltd had no legal existence and could not maintain the petition. The merger agreement between Premier Developments Ltd (a wholly-owned NSSF subsidiary) and Mugoya Estates Ltd that formed the company was concluded without the Attorney General's legal advice and placed public funds beyond the control of the Auditor General and Parliament, contravening articles 119(5) and 164(3) of the Constitution. By article 2 the unconstitutional agreement was void, so the company did not exist in law and could neither sue nor be sued. The petition was incompetent and the first preliminary objection succeeded; the remaining objections did not arise.

Outcome

Petition held incompetent; petitioner found to have no legal existence and unable to sue.

Facts

Nsimbe Holdings Ltd was a joint venture company formed to develop the Nsimbe Estate Housing Project. It arose from a merger between Premier Developments Ltd, a special-purpose vehicle wholly owned by the National Social Security Fund (a statutory public body), and Mugoya Estates Ltd, a private company. Under the merger, Mugoya Estates held 51% and Premier Developments 49% of the shares, with NSSF transferring funds into the venture through Premier Developments. After public outcry, the Minister of Finance directed the Auditor General to audit the firm, and the President ordered the Inspectorate of Government to investigate allegations of mismanagement of NSSF and the joint venture. In October 2005 the IGG reported findings of corruption and irregularity in the formation of the company, including that the joint venture agreement had not been submitted to the Attorney General for legal advice. Aggrieved by the findings, Nsimbe Holdings petitioned the Constitutional Court challenging the report and certain statutory provisions. At the hearing the IGG raised preliminary objections, including that the petitioner had no legal existence.

Issues

1. Whether the petitioner, Nsimbe Holdings Ltd, was legally incorporated and had legal existence and locus standi to maintain the petition.
2. Whether the merger agreement forming the petitioner was concluded contrary to articles 119(5) and 164(3) of the Constitution and was therefore void.
3. Whether the petition was maintainable in the absence of a company resolution authorising its filing.
4. Whether the petition, originally filed under a revoked Legal Notice, was a nullity.
5. Whether the Constitutional Court had jurisdiction to grant the prerogative writs sought in the petition.

Orders

• The first preliminary objection succeeds.
• The petition is incompetent, the petitioner being a non-entity that does not exist in law.
• The remaining three preliminary objections do not arise.
• No order as to costs, the petitioner being a non-entity that cannot be ordered to pay costs.

Rules and key headnotes

Legislation cited (12)

• Constitution of Uganda 1995 art.137
• Constitution of Uganda 1995 art.2
• Constitution of Uganda 1995 art.119(5)
• Constitution of Uganda 1995 art.164(3)
• Companies Act (Cap.110) s.16(1)
• Companies Act (Cap.110) s.28(1)
• Companies Act (Cap.110) s.29(1)
• Companies Act (Cap.110) s.3
• Inspectorate of Government Act No.5 of 2002 s.21
• Leadership Code Act No.17 of 2002 s.34(2)(b)
• Public Procurement and Disposal of Public Assets Act
• Constitutional Court (Petitions and References) Rules 2005 No.91

Cases cited (2)

• Makerere Properties v M. R. Karia (HCCS No. 32 of 1994) [1995] 3 KLR 25
• Bugerere Coffee Growers v Sebaduka & Anor [1970] EA 147

Cases citing this judgment (14)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

• Kikungwe and Anor v Attorney General (Constitutional Petition No. 30 of 2006)
• Natanga & 3 Ors v Uganda (Consolidated Criminal Appeal No. 389 of 2017, 386 of 2016 and 369 of 2016)
• Legal Brains Trust (LBT) Ltd v Basajjabalaba & 18 Ors (Constitutional Petition No. 4 of 2012)
• Andrua & Anor v Uganda (Criminal Appeal 17 of 2016) distinguished
• Ambitious Construction Company Ltd v Uganda Broadcasting Corporation (Civil Suit No. 335 of 2012) applied
• Messrs Sendege Senyondo & Co Advocates v Kampala Capital City Authority (Civil Suit No. 147 of 2016)
• Engineer Investiments Ltd v Attorney General & Anor (HCCS 331 of 2012) applied
• GT Bank Ltd v Richline International Ltd & Anor (HC OS 10 of 2014) applied
• Real Gaba Market Property Owner v Kampala Capital City Authority (Civil Suit No. 248 of 2008)
• Equator Touring Services v Kampala City Council (HCCS 763 of 2007)
• Among v Trucks International Ltd (Civil Suit No. 280 of 2010)
• Attorney General v Sabric Building and Decorating Contractors Limited (Misc. Appl. No. 299 of 2012)
• Alpha Gama Engineering Enterprises Ltd v Attorney General (Civil Suit No. 377 of 2009)
• Hon Sam Kuteesa & 2 Ors v Attorney General (Constitutional Reference No. 54 of 2011)

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