Wakilii

Pan Afric Impex (U) Ltd v Barclays Bank PLC and Anor (HCT-00-CC-MA 804 of 2007)

High Court · [2008] UGCOMMC 18 · 2008 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from main suit (HCT-00-CC-CS-0839-2007)
Decision
Application for temporary injunction dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that Section 6 of the Arbitration and Conciliation Act did not apply as there was no arbitration agreement between the parties to the suit. The applicant failed to establish a prima facie case for a temporary injunction, as the written loan facility agreements did not support an implied term regarding a minimum quantity of coffee, and consideration had moved from the respondents to the applicant. The applicant also failed to show that it would suffer irreparable loss incapable of monetary compensation. The application was dismissed with costs.

Outcome

Application for temporary injunction dismissed

Facts

Pan Afric Impex (U) Ltd had commodity financing agreements with Barclays Bank PLC and ABSA Bank Ltd for trading in coffee. The banks provided finance against coffee stored in a warehouse under a collateral manager, Cotecna. In November 2006, Cotecna reported a substantial shortfall in the coffee stocks. On 27 December 2006, the parties entered into new loan facility agreements to resolve the shortfall, with Pan Afric agreeing to repay ascertained commodity debts over time. During implementation, Pan Afric discovered that only 10% of the expected coffee (approximately 8,913 metric tonnes) was actually available. Pan Afric sought an interlocutory injunction restraining the banks from enforcing the agreements, arguing they were void for mistake of fact and lack of consideration, and relying on ongoing arbitration proceedings in London between the banks and Cotecna.

Issues

  1. Whether Section 6 of the Arbitration and Conciliation Act applied to the facts of the case to warrant an interim measure of protection.
  2. Whether the applicant established a serious question to be tried sufficient to justify a temporary injunction.
  3. Whether the loan facility agreements of 27 December 2006 were void for mistake of fact concerning the quantity of coffee in the warehouse.
  4. Whether the loan facility agreements of 27 December 2006 were void for lack of consideration.
  5. Whether the applicant would suffer irreparable loss if the injunction was not granted.
  6. Where the balance of convenience lay in deciding whether to grant the interlocutory injunction.

Orders

  • Application dismissed.
  • Costs awarded to the respondents.

Rules and key headnotes

Arbitration and Conciliation Act s.6 — Interim Measures — Requirement of Arbitration Agreement Between Parties
A party seeking an interim measure of protection under Section 6 of the Arbitration and Conciliation Act must be a party to an arbitration agreement with the respondent and, if arbitral proceedings have commenced, must be a party to those proceedings.
Interlocutory Injunctions — Test for Grant — Serious Question to be Tried
To obtain a temporary injunction before determination of the main suit, an applicant must first show that there is a serious question to be tried, secondly that it stands to suffer irreparable loss should the injunction not be granted, and in case of doubt the matter may be resolved on the balance of convenience.
Implied Terms — Test for Implication — Necessity and Obviousness
Implied terms can be justified only under compulsion of some necessity. Where there is a written contract expressly setting forth the bargain between the parties, terms are to be implied only under compulsion of some necessity, and only where the term is so obvious that it goes without saying.
Implied Terms — Consistency with Express Terms
An implied term cannot override or be inconsistent with the express terms of a written contract, as to do so would amount to the court rewriting the contract for the parties.
Consideration — Exchange of Promises and Obligations
Where parties make promises to each other and assume certain obligations in a contractual agreement, consideration moves from one party to another notwithstanding that the obligations assumed by one party may be onerous.
Interlocutory Injunctions — Irreparable Loss — Adequacy of Damages
If damages recoverable at common law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted. The applicant must show that the loss they will suffer is incapable of monetary compensation and that the respondents would not be able to meet such compensation.

Legislation cited (2)

Cases cited (5)

  • American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504
  • Tonoka Steels Ltd v The Eastern and Southern Africa Trade and Development Bank [2000] EA 536
  • Luxor (Eastbourne) Ltd v Cooper [1941] 1 All ER 33
  • Lynch v Thorne [1956] 1 All ER 744
  • Shirlaw v Southern Foundries (1926) Ltd and Federated Foundries Ltd [1939] 2 All ER 113

Full judgment

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

Pan Afric Impex (U) Ltd v Barclays Bank PLC and Anor (HCT-00-CC-MA 804 of 2007) [2008] UGCommC 18 (12 February 2008)
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.