Wakilii

Roko Construction Ltd v Finasi Roko Construction SPV Ltd & Anor (MISC. APPLICATION No. 370 OF 2019)

High Court · [2019] UGHCCD 133 · 2019 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from Company Cause No. 10 of 2019
Decision
Temporary injunctions granted in favour of the applicant. Matter remitted for determination of the main petition.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the applicant satisfied all the conditions for the grant of a temporary injunction. The court found that a clear intention and understanding existed between the parties for the applicant to execute the construction works of the International Specialized Hospital in Uganda at Lubowa as part of a joint venture SPV. The respondents were estopped from denying this arrangement. Altering the status quo by evicting the applicant would cause irreparable injury and risk failure of the entire USD 379 million hospital project. The temporary injunction was granted to preserve the existing arrangements and allow construction to proceed as initially agreed pending determination of the main petition.

Outcome

Temporary injunctions granted in favour of the applicant. Matter remitted for determination of the main petition.

Facts

Roko Construction Ltd and Finasi International FZC incorporated a joint venture SPV company, Finasi/Roko Construction SPV Ltd, to design, finance, build and equip the International Specialized Hospital in Uganda at Lubowa. The SPV entered into a Project Works Investment Agreement with the Government of Uganda on 25 May 2015. Roko took possession of the site from May 2015, carried out preliminary works, mobilised equipment, provided performance security worth USD 7,908,515.60, obtained a Letter of Comfort from bankers, and prepared detailed implementation schedules. Financing of USD 250 million was arranged with various financial institutions. On 10 June 2019, the day construction was to commence, the chairperson of Finasi arrived at the site with police and persons in military attire demanding that Roko hand over the site to Chinese persons and vacate. Roko filed this application seeking temporary injunctions to restrain the respondents from evicting it from the site and interfering with execution of the construction works.

Issues

  1. Whether the applicant satisfied the conditions for the grant of a temporary injunction.
  2. Whether the applicant demonstrated a prima facie case with a likelihood of success in the main cause.
  3. Whether the balance of convenience favoured the grant of an injunction.
  4. Whether the applicant would suffer irreparable injury if the injunction was not granted.
  5. What constituted the status quo to be preserved pending determination of the main petition.

Orders

  • Temporary injunction granted restraining the 1st and 2nd Respondents, their officials, agents or anyone acting under their authority from evicting the Applicant from the site for the International Specialized Hospital in Uganda at Lubowa until the petition is heard and disposed of.
  • Temporary injunction granted restraining the 1st and 2nd Respondents from interfering with the Applicant's execution of the contract works and possession of the site until the petition is heard and disposed of.
  • Temporary injunction granted restraining the 1st and 2nd Respondents from entering into a contract with anyone or engaging any contractor other than the Applicant to build the International Specialized Hospital in Uganda at Lubowa until the petition is heard and disposed of.
  • Costs of the application to abide the outcome of the main cause.

Rules and key headnotes

Civil Procedure — Interlocutory Applications — Temporary Injunctions — Principles
The main purpose of a temporary injunction is to maintain the status quo of the subject matter of the litigation pending determination of the substantive rights of the parties in the head suit. Status quo means the existing state of things or existing condition before a particular point in time.
Civil Procedure — Temporary Injunctions — Status Quo — Determination
In determining whether or not to maintain the status quo, all relevant circumstances surrounding the case have to be taken into consideration. Where the status quo has substantially changed, it is doubtful if an order of injunction will serve any purpose as it could mean preserving the illegality or the breach or the wrongful act.
Contract Law — Formation — Intention to Create Legal Relations — Conduct and Course of Dealing
A clear intention and understanding to be bound can be established by examining the entire course of dealing between parties, including correspondence, draft contracts reviewed and agreed with minor amendments, provision of performance securities and letters of comfort, and consistent conduct over time, even where a formal written contract has not been signed.
Evidence — Estoppel — Estoppel by Conduct
Under section 114 of the Evidence Act, where one person has by declaration, act or omission intentionally caused or permitted another person to believe a thing to be true and to act upon that belief, neither that person nor their representative shall be allowed to deny the truth of that thing in any suit or proceeding between themselves and that person. A party which over time represents to another that it will perform a contract is estopped from denying that arrangement at a late stage after the other party has acted in reliance.
Company Law — Special Purpose Vehicles — Joint Ventures — Obligations of Members
Where a special purpose vehicle company is formed as a joint venture between two parties for the sole purpose of performing a specific project, and the memorandum and articles of association and project agreements establish that one member shall perform the construction works, that member cannot be excluded from performing the contract without breach of the company's founding documents and the terms of the project agreements.
Civil Procedure — Temporary Injunctions — Irreparable Injury
Irreparable injury does not mean that there must be no physical possibility of repairing the injury, but means that the injury must be substantial or material, that is, one that cannot be adequately compensated for in damages. Where exclusion from a major construction contract would result in financial obligations exceeding USD 80 million that the applicant cannot repay and potential liquidation, irreparable injury is established.
Civil Procedure — Temporary Injunctions — Positive Injunctions — Status Quo Preservation
A positive injunction that allows the state of things existing at a particular point in time to remain and continue is appropriate where it preserves arrangements that have existed between parties and prevents disruption of a major project. An injunction to prevent eviction from a construction site and interference with contract execution is a positive injunction that maintains rather than alters the status quo.

Legislation cited (3)

Cases cited (7)

  • American Cyanamid v Ethicon Ltd [1975] AC 396
  • Kiyimba Kaggwa v Hajji A Nasser Katende [1985] HCB 43
  • PK Sengendo v James Ndawula Lumaama & 3 Others (High Court Civil Suit No. 243 of 2003)
  • Erisa Rainbow Musoke v Ahamad Kezaala [1987] HCB 81
  • Gapco v Muwanga T/a Musa & Moses Services (High Court Civil Suit No. 84 of 1998)
  • Geilla v Cassman Brown & Co [1973] EA 358
  • Tony Wasswa v Joseph Kakooza [1987] HCB 79

Full judgment

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

Roko Construction Ltd Vs Finasi_Roko Construction SPV Ltd & Anor (MISC. APPLICATION No. 370 OF 2019) [2019] UGHCCD 133 (4 July 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.