Parambot Breweries Uganda Limited (In receivership) v Standard Chartered Bank Uganda Limited and Another (Civil Appeal 279 of 2021)

Observed later treatment

No later-treatment classification is recorded for this judgment.

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

The Court of Appeal held that a company in receivership retains, through its creditors or directors, the power to institute proceedings against its receiver or creditor to challenge the receiver's appointment or other unlawful acts under section 184 of the Insolvency Act. The appellant therefore had locus and the appeal was not an abuse of process. On the merits, the Court found the suit had been dismissed under Order 9 Rule 22 (not Order 17), and that the trial Court's failure to notify the appellant of the hearing date constituted sufficient cause for non-appearance under Order 9 Rule 23. Gaswaga, J erred in refusing reinstatement. The appeal was allowed and the suit reinstated for hearing before another Judge.

Outcome

Appeal allowed; dismissal of suit set aside; HCCS 443 of 2016 reinstated for hearing before another Judge.

Facts

The appellant, a brewery company, obtained several loan facilities from the first respondent bank between 2010 and 2014. Having failed to repay a debt claimed to exceed UGX 7.5 billion, the first respondent appointed the second respondent as receiver in February 2016. The receiver resolved to sell the appellant's assets to reduce indebtedness. In June 2016, the appellant filed HCCS 443 of 2016 contesting the debt amount and alleging breach of contract and fiduciary duty, and seeking a permanent injunction against the sale, obtaining various interlocutory orders. The suit remained unheard until 2020. It was fixed for mention and directions, but on 24 August 2020 only the respondents' counsel appeared, and the Court dismissed the suit for non-appearance. The appellant filed HCMA 380 of 2021 to set aside the dismissal, which Gaswaga, J dismissed. The appellant appealed. The record contained no affidavit of service showing the appellant had been notified of the hearing date.

Issues

1. Whether a company under receivership has locus standi to institute proceedings against its receiver and creditor.
2. Whether the appeal was filed in abuse of court process.
3. Whether the appellant adopted the correct procedure in seeking reinstatement of a suit dismissed for want of prosecution.
4. Whether the trial Judge erred in declining to reinstate the appellant's suit which had been dismissed for non-appearance.
5. Whether the failure of the trial Court to notify the appellant of the hearing date amounted to sufficient cause for non-appearance under Order 9 Rule 23 of the CPR.

Orders

• The High Court in HCMA 380 of 2021 erred when it failed to consider that the failure of the Court to notify the appellant of the hearing date amounted to sufficient cause for non-appearance within the meaning of Order 9 Rule 23 of the CPR.
• The High Court's decision in HCMA 380 of 2021 is set aside and substituted with an order allowing the application and setting aside the dismissal of the appellant's suit.
• The appellant's suit, HCCS 443 of 2016, is reinstated for hearing on its merits before another Judge.
• No order as to costs.

Rules and key headnotes

Legislation cited (14)

• Insolvency Act 2011 s.183(1)
• Insolvency Act 2011 s.184(1)
• Insolvency Act 2011 s.184(2)
• Civil Procedure Rules S.I 71-1 Order 9 Rule 22
• Civil Procedure Rules S.I 71-1 Order 9 Rule 23
• Civil Procedure Rules S.I 71-1 Order 17 Rule 5
• Civil Procedure Rules S.I 71-1 Order 17 Rule 6
• Civil Procedure Rules S.I 71-1 Order 17 Rules 1-4
• Civil Procedure Act Cap. 71 s.98
• Evidence Act Cap. 6 s.101(2)
• Evidence Act Cap. 6 s.103
• Judicature (Court of Appeal Rules) Directions S.I 13-10 Rule 30(1)(a)
• Judicature (Court of Appeal Rules) Directions S.I 13-10 Rule 2(2)
• Judicature (Court Vacation) Rules S.I 13-20 Rule 4

Cases cited (16)

• Kifamunte v Uganda (Criminal Appeal No. 10 of 1997)
• Steel Rolling Mills Ltd v Standard Chartered Bank (HCMA No. 161 of 2019)
• Pharmatek Ind. Ltd vs. Trade Bank (Nig) Plc
• Moss Steamship Co v Whinney [1912] AC 254
• Nigerian Bank for Commerce and Industry and Another vs. Alfijir (Mining) Nigeria Ltd (1999)
• Suleiman Enterprises Ltd v Kensalt Ltd and 3 Others (Mombasa ELC Case No. 71 of 2018)
• Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd (1969) 92 WN (NSW) 199
• Attorney General and Another v James Mark Kamoga and Another (Civil Appeal No. 8 of 2004)
• Benkay Nigeria Ltd vs. Cadbury Nigeria Ltd, 29 of 2oo6
• Seraki v Kotoge (1992) 9 NWLR (pt 264) 756
• Birkett v James [1978] AC 297
• Isadru v Aroma and Others (Civil Appeal No. 3 of 2014)
• Behangana and Another v Attorney General (Constitutional Petition No. 53 of 2010)
• Nakiridde v Hotel International Ltd [1987] HCB 85
• Agnes Nanfuka Kalyango and Others v Attorney General and Another (Civil Appeal No. 64 of 2000)
• Paul Okwir v Charles Olwa Ekwaro (Civil Appeal No. 191 of 2013)

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