Wakilii

Ojok & 87 Ors v Torres Advanced Enterprises Solution LLC (Miscellaneous Application No. 73 of 2018)

Industrial Court · [2018] UGIC 32 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for security for costs pending determination of underlying labour dispute
Decision
Security for costs ordered; respondent to deposit UGX 150,000,000 or provide bank guarantee pending determination of underlying labour dispute

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that Order 40 Rule 1 of the Civil Procedure Rules applies to companies as well as natural persons. Where a foreign company's major contract is ending and it has not adequately demonstrated that it will remain within the jurisdiction or possess sufficient assets to satisfy a potential decree, the court may order security for costs. The respondent was ordered to furnish security of UGX 150,000,000 in cash or by bank guarantee.

Outcome

Security for costs ordered; respondent to deposit UGX 150,000,000 or provide bank guarantee pending determination of underlying labour dispute

Facts

The applicants, 88 workers, brought a labour dispute against their employer, Torres Advanced Enterprise Solution LLC, a foreign company with a five-year contract with the American Embassy in Uganda ending in October 2018. The applicants sought an order requiring the respondent to pay UGX 1,000,000,000 as security pending determination of the underlying labour dispute. The applicants contended that the respondent would leave Uganda after the contract ended and would have no assets within the jurisdiction to satisfy any award. The respondent argued it had multiple business engagements in Uganda, including local contracts and assets such as vehicles, an office, and bank accounts. The court found the respondent had not adequately demonstrated it would remain in the jurisdiction or possess sufficient assets after October 2018.

Issues

  1. Whether the respondent should be ordered to furnish security for costs pending determination of the underlying labour dispute.
  2. Whether Order 40 Rule 1 of the Civil Procedure Rules applies to artificial persons such as companies.
  3. Whether the court is satisfied that the respondent is likely to leave the jurisdiction, thereby obstructing execution of any decree.

Orders

  • Application allowed.
  • Respondent to furnish court with security in the form of either cash of UGX 150,000,000 or a bank guarantee in the same amount.
  • Respondent to enter an undertaking to pay damages worth the bank rate interest that will have accumulated on either the cash deposited or the bank guarantee.
  • No order as to costs.

Rules and key headnotes

Civil Procedure — Security for Costs — Application of Order 40 Rule 1 CPR to Artificial Persons
Order 40 Rule 1 of the Civil Procedure Rules, which provides for security for costs, applies to artificial persons such as companies and not only to natural persons.
Civil Procedure — Security for Costs — Test for Granting Security
In deciding whether to grant security for costs under Order 40 Rule 1, the court must balance the need to preserve the applicant's interest and protect the integrity of court orders against the need to protect the rights of innocent third parties who may be affected by the order.
Civil Procedure — Security for Costs — Foreign Company Leaving Jurisdiction
Where a foreign company's major contract is ending and it has not adequately demonstrated that it will remain within the jurisdiction or possess sufficient assets to satisfy a potential decree, the court may order security for costs to prevent obstruction or delay in execution of any decree.
Civil Procedure — Security for Costs — Burden of Proof on Respondent
Where a respondent asserts it has local contracts and assets sufficient to satisfy a decree, it bears the burden of proving the existence and value of such contracts and assets, particularly where it is a foreign company whose major business engagement is ending.

Legislation cited (1)

Cases cited (5)

  • Abby Mugimu v Luciano Basabasa (1991) HCB 70
  • Ivan Ssebaduka v Warid Telecom Ltd (Miscellaneous Application No. 204 of 2014)
  • Coil Ltd v Transtrade Services Ltd (Miscellaneous Application No. 14 of 2016)
  • Customs and Exercise commissioner Vs Ancor Foods Ltd (1999 1 WLR 1139)
  • Uganda Electricity Board v Royal Van Canteen (U) Limited (Miscellaneous Application No. 025 of 2006)

Full judgment

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

Ojok_&_87_Ors_v_Torres_Advanced_Enterprises_Solution_LLC_(Miscellaneous_Application_No._73_of_2018)_[2018]_UGIC_32_(5_September_2018)
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.