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Petrocity Enterprises Uganda Limited v Mota -Engil Engenharia Construcao SG and Another (Miscellaneous Application 891 of 2021)

High Court · [2021] UGCOMMC 169 · 2021 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for attachment before judgment in support of summary suit for debt recovery
Decision
Application for attachment before judgment dismissed with costs to the respondents

Observed later treatment

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Holding

The court dismissed the application for attachment before judgment. The applicant failed to adduce credible evidence showing a real risk that the respondents would dissipate or remove assets with intent to obstruct execution of any decree. The applicant did not meet the duty of full and frank disclosure required in ex parte applications. Additionally, the court noted that all execution proceedings were suspended under COVID-19 judicial contingency measures, rendering attachment before judgment impractical.

Outcome

Application for attachment before judgment dismissed with costs to the respondents

Facts

The applicant instituted a summary suit seeking recovery of UGX 2,142,574,468 from the respondents for fuel supplied on credit. The applicant alleged that the 2nd respondent (a subcontractor) had arranged for the 1st respondent to pay the applicant directly, but later instructed the 1st respondent to stop such payments. The applicant claimed that without attachment before judgment, it would be unable to execute any decree because the respondents had no known unencumbered assets in Uganda. The 1st respondent denied any contractual obligation to the applicant and stated it had stopped payments after discovering it had overpaid the 2nd respondent. The 2nd respondent disputed the debt amount, asserting it had already paid UGX 3,871,814,192 and that only UGX 1,157,000,000 was undisputed. Both respondents opposed the application, stating they had not acted to dissipate assets.

Issues

  1. Whether the applicant established a prima facie case justifying attachment before judgment.
  2. Whether there was credible evidence showing a real risk that the respondents would dissipate or remove assets with intent to defeat execution of any decree.
  3. Whether the court should grant an order for attachment before judgment during the period of suspension of execution proceedings under COVID-19 contingency measures.

Orders

  • Application dismissed.
  • Costs awarded to the respondents.

Rules and key headnotes

Attachment Before Judgment — Requirements for Grant
For an order of attachment before judgment to issue under section 94 of the Civil Procedure Act and Order 40 rule 1 of the Civil Procedure Rules, the applicant must establish: (a) that the claim is prima facie valid and bona fide; (b) that there is credible evidence showing the respondent is removing or there is a real risk the respondent is about to remove assets from the jurisdiction or is otherwise dissipating assets in a manner clearly distinct from the usual or ordinary course of business or living so as to render future tracing remote; and (c) that the applicant is prepared to pay damages if the order should not have been issued.
Attachment Before Judgment — Purpose and Limits
Attachment before judgment is a harsh remedy granted to prevent a defendant from dissipating assets with the intention or effect of frustrating enforcement of a prospective judgment. It is not granted to give a claimant advance security for the claim or to convert an unsecured debt into a secured debt, and should be made only in exceptional cases.
Duty of Candour and Full Disclosure in Ex Parte Applications
An applicant seeking an order of attachment before judgment must make full and frank disclosure of all relevant and material facts, including likely defences and matters adverse to the application. The duty of candour requires the applicant to consider what any interested person would wish to adduce if present and to place that material before the judge. An affidavit based on information without disclosing the source is defective and may not support the application.
Evidence Required to Show Risk of Dissipation
To show a real risk of dissipation of assets, the applicant must disclose all relevant evidence showing assets are being divested or dissipated. Mere allegations that a respondent has no known unencumbered property or general fears of non-satisfaction of a future judgment are insufficient. The court must be furnished with objective facts supporting the inference that the respondent is acting or will act with intent to obstruct or delay execution of any decree.
Suspension of Execution Proceedings — COVID-19 Contingency Measures
Where execution proceedings are suspended by judicial circular during a period of emergency, an application for attachment before judgment cannot be granted, as attachment before judgment is analogous to execution after judgment in terms of effect and requires the court's supervision to be effective. An order for attachment before judgment creates control over property in custodia legis and requires ongoing judicial supervision which cannot be provided during a suspension period.

Legislation cited (5)

Cases cited (10)

  • Lister v Stubbs [1890] All ER 797
  • Bahman (Prince Abdul) Bin Turki Al Sudairy v Abu Taha [1980] 3 All ER 409
  • Polly Peck International plc v Nadir (No 2) [1992] 4 All ER 769
  • Fourie v La Roux [2007] UKHL 1
  • The Niedersachsen [1983] 1 WLR 1412
  • Uganda Electricity Board (In Liquidation) v Royal Van Zanten (U) Ltd (Miscellaneous Application No. 251 of 2006)
  • Rex v Kensington Income Tax Commissioners, Ex parte de Polignac (Princess) [1917] 1 KB 486
  • Re Stanford International Bank Ltd [2011] Ch 33
  • Siporex Trade SA v Comdel Commodities [1986] 2 Lloyd's Rep 428
  • Kabwimukya Aristella v John Kasigwa [1978] HCB 251

Full judgment

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

Petrocity Enterprises Uganda Limited v Mota -Engil Engenharia Construcao SG and Another (Miscellaneous Application 891 of 2021) [2021] UGCommC 169 (13 July 2021)
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.