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Ren Publishers Limited & Anor V Uganda National Bureau of Standards (MISC. CAUSE NO. 171 OF 2019)

High Court · [2019] UGHCCD 146 · 2019 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by chambers summons for interim measure of protection and preservation pending arbitration
Decision
Interim measures of protection granted pending arbitration

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court granted interim measures of protection restraining the respondent from terminating a contract and from implementing a parallel electronic verification services agreement with other parties pending arbitration. The court found that the applicants established serious issues for determination in arbitration concerning the parties' respective performance obligations under their Memorandum of Understanding, that the applicants would suffer irreparable injury to the tune of approximately 75 billion shillings which could not adequately be atoned by damages, and that the balance of convenience favoured the applicants.

Outcome

Interim measures of protection granted pending arbitration

Facts

On 15 August 2014, the 1st applicant and respondent signed a five-year Memorandum of Understanding for provision of electronic verification services and supply of electronic tags (UNBS E-tags) for verification of standards and detection of counterfeit and substandard products. On 25 May 2016, the respondent granted no objection to a subcontract between the 1st and 2nd applicants for implementation of the UNBS E-tag project. The applicants invested over 75 billion shillings including acquiring premises, purchasing specialised digital printing equipment, installing a centralised ICT verification system, and training personnel. On 4 April 2019, the respondent signed a parallel agreement with Uganda Revenue Authority and SICPA SA for provision of similar electronic verification services. The applicants referred the dispute to arbitration on 8 February 2018. The respondent acknowledged receipt but subsequently proceeded with the parallel contract. The applicants sought interim measures to restrain the respondent from terminating their contract and implementing the parallel agreement pending arbitration.

Issues

  1. Whether the applicants established a prima facie case with a probability of success warranting an interim measure of protection.
  2. Whether the applicants would suffer irreparable injury if the interim measure of protection was not granted.
  3. Where the balance of convenience lay as between the parties.

Orders

  • Application allowed.
  • The respondent, its servants, agents or anyone acting under its authority is restrained from terminating the contract between the 1st applicant and the respondent and the subcontract between the 1st and 2nd applicants until the hearing and determination of the arbitration proceedings.
  • The respondent, its servants, agents or anyone acting under its authority is restrained from implementing and engaging with Uganda Revenue Authority and SICPA SA in respect of provision of electronic verification services and detection of counterfeit and substandard products in Uganda until the hearing and determination of the arbitration proceedings.
  • Costs of the application awarded to the applicants.

Rules and key headnotes

Interim measures of protection pending arbitration — jurisdiction of court
Under section 6(1) of the Arbitration and Conciliation Act, the High Court has jurisdiction to grant interim measures of protection and preservation to restrain a party from conduct that would frustrate or render nugatory an arbitration clause pending the hearing and determination of the arbitral proceedings.
Temporary injunction — test for grant of interim relief
The principles for granting a temporary injunction under section 64(c) of the Civil Procedure Act and Order 41 rule 2 of the Civil Procedure Rules apply equally to the grant of interim measures of protection pending arbitration. The court must be satisfied that the claim is not frivolous or vexatious and that there is a serious question to be tried, but it is not the court's function at this stage to resolve conflicts of evidence or decide complicated questions of law which call for detailed arguments and mature consideration.
Temporary injunction — prima facie case — meaning
To establish a prima facie case with probability of success, the applicant need not prove the case to the hilt. It is sufficient that the court is satisfied that there is a serious question to be tried, that is, an issue which raises a prima facie case for adjudication. The existence of serious disputes concerning the parties' respective performance obligations under a contract constitutes a serious issue for determination sufficient to satisfy this requirement.
Temporary injunction — irreparable injury — meaning and proof
Irreparable injury does not mean physical impossibility of repairing the injury. It means injury or damage that is substantial or material, one that cannot adequately be atoned for in damages. Where an applicant has invested a substantial sum (in this case 75 billion shillings) in specialised equipment and infrastructure for performance of a contract, and the respondent has not undertaken to compensate the applicant for losses if arbitration succeeds, the injury will be material and substantial and no amount of compensation can adequately atone for it.
Temporary injunction — balance of convenience
The balance of convenience lies more on the party who will suffer more if the respondent is not restrained in the activities complained of. An applicant need not show merely that he will suffer detriment, but that he will suffer greater detriment than the respondent would suffer if the injunction is granted.

Legislation cited (5)

Cases cited (9)

  • Pan Afric Impex (U) Ltd v Barclays Bank PLC (High Court Misc. Application No. 804 of 2007)
  • American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504
  • Titus Tayebwa v Fred Bogere and Eric Mukasa (Civil Appeal No. 3 of 2009)
  • Victor Construction Works Ltd v Uganda National Roads Authority (High Court Misc. Application No. 601 of 2010)
  • Equator International Distributors Ltd v Beiersdorf East Africa Ltd and Others (Miscellaneous Application No. 1127 of 2014)
  • Giella v Cassman Brown & Co [1973] EA 358
  • American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504
  • Commodity Trading Industries v Uganda Maize Trading Industries [2001-2005] HCB 119
  • Kiyimba Kaggwa v Haji AN Katende [1985] HCB 43

Full judgment

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

Ren Publishers Limited & Anor V Uganda National Bureau of Standards (MISC. CAUSE NO. 171 OF 2019) [2019] UGHCCD 146 (5 August 2019)
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.