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Omer Farming Company Limited v Rehoboth Agricultural Management Services Limited (Miscellaneous Application 1869 of 2022)

High Court · [2024] UGHC 254 Application Granted — Suit Struck Out AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to dismiss a civil suit for want of jurisdiction on grounds of arbitration clause and lis pendens rule
Decision
Civil suit struck out for offending the lis pendens rule and constituting an abuse of court process

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Court held that the applicant's challenge to jurisdiction on arbitration grounds was premature because no written statement of defence had been filed as required by section 5(1) of the Arbitration and Conciliation Act. The court further held that HCCS No. 0899 of 2022 offended the lis pendens rule because the matters in issue were directly and substantially similar to those in pending Civil Appeal No. 293 of 2019, as both involved the same debt claim under the same consulting agreement. The suit was struck out as an abuse of court process.

Outcome

Civil suit struck out for offending the lis pendens rule and constituting an abuse of court process

Facts

The parties executed a consulting agreement in August 2018. The applicant terminated the contract by letter dated 30 January 2019. Prior to termination, on 23 January 2019, the respondent issued a statutory demand for USD $112,157. The applicant filed Miscellaneous Cause No. 21 of 2019 to set aside the statutory demand, which was granted by Justice Ssekaana Musa on 14 June 2019. The respondent appealed that decision in Civil Appeal No. 293 of 2019, which remained pending. While the appeal was pending, the respondent filed HCCS No. 0899 of 2022 claiming USD $121,847 for breach of the same consulting agreement. The applicant then filed this application seeking dismissal of the civil suit on grounds of lack of jurisdiction due to an arbitration clause and the lis pendens rule. The consulting agreement contained an arbitration clause at clause 16.

Issues

  1. Whether the application is improperly before court, incompetent and without merit on the basis that it was not brought under the Arbitration and Conciliation Act.
  2. Whether HCCS No. 0899 of 2022 offends the lis pendens rule.
  3. Whether the application or HCCS No. 0899 of 2022 is an abuse of court process.

Orders

  • HCCS No. 0899 of 2022 is struck out under section 98 of the Civil Procedure Act and section 17(2) of the Judicature Act.
  • Each party shall bear their own costs.

Rules and key headnotes

Arbitration and Conciliation Act — Stay of Legal Proceedings — Preconditions for Court to Refer Matter to Arbitration
A court cannot refer a matter to arbitration under section 5(1) of the Arbitration and Conciliation Act until the defendant has filed a written statement of defence and pleadings have closed. To do so before this stage would be premature and in contravention of the Act.
Arbitration and Conciliation Act — Jurisdiction — Improper Application under General Civil Procedure Provisions
Where a specific statutory regime governs a matter, such as the Arbitration and Conciliation Act, a party cannot invoke general provisions of the Civil Procedure Act to obtain relief specifically addressed by the special statute. The specific legislation takes precedence over general civil procedure provisions.
Lis Pendens Rule — Directly and Substantially Similar Matters — Test
Section 6 of the Civil Procedure Act prohibits a court from proceeding with a suit where the matter in issue is directly and substantially in issue in a previously instituted suit between the same parties. Whether matters are directly and substantially similar is not only a question of framing or construction but must also consider the likely outcome of the matters and whether both proceedings turn on the same underlying facts and contractual relationship.
Lis Pendens Rule — Same Debt Claimed in Different Proceedings
Where a party unsuccessfully claims a debt through insolvency proceedings via statutory demand and the setting aside of that demand is under appeal, filing a subsequent ordinary civil suit to recover the same debt under the same contract offends the lis pendens rule, as the matters in issue are directly and substantially similar.
Abuse of Court Process — Multiplicity of Suits — Same Cause of Action
It constitutes an abuse of court process to institute a fresh civil suit claiming the same debt under the same contract while an appeal concerning the same debt remains pending, as this creates multiplicity of suits and risks inconsistent judgments and double recovery.

Legislation cited (8)

Cases cited (8)

  • MSS XSABO Power Ltd and Others v Great Lakes Energy Company NV (High Court Miscellaneous Application No. 1567 of 2022)
  • Attorney General and Another v Mark Kamoga (Civil Appeal No. 8 of 2004)
  • Babcon Uganda Limited v Mbale Resort Hotel Limited (Civil Appeal No. 6 of 2016)
  • National Social Security Fund and Another v Alcon International Limited (Civil Appeal No. 15 of 2009)
  • AC Yafeng Construction Company Limited v The Living World Assembly and Others (Civil Suit No. 739 of 2021)
  • Springs International Hotel Ltd v Hotel Diplomate Ltd and Another (Civil Suit No. 227 of 2011)
  • Alcon International Ltd v The New Vision Publishing and Printing Company Ltd (Supreme Court Civil Appeal No. 04 of 2010)
  • Tindyebwa Stephen v Alpha International Investments Ltd (Miscellaneous Application No. 0789 of 2005)

Full judgment

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

Omer Farming Company Limited v Rehoboth Agricultural Management Services Limited (Miscellaneous Application 1869 of 2022) [2024] UGHC 254 (30 April 20
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.