Wakilii

Salim Mohamedali and Others v Mohammed Alibhai and Others (Miscellaneous Application No. 273 of 2026)

High Court · [2026] UGHCCD 153 · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction and interim governance relief arising from a company petition alleging unfair prejudice to minority shareholders
Decision
Application granted with temporary injunctions issued, neutral interim manager to be appointed, and forensic audit ordered pending determination of the main company petition

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Holding

The High Court granted a temporary injunction restraining respondent directors from dealing with company assets, funds, and records pending determination of a minority shareholder petition alleging unfair prejudice. The court held that minority shareholders established a prima facie case of governance failures, that damages would be inadequate to remedy loss of corporate transparency and asset dissipation, and that the balance of convenience favoured preservative relief. The court further held that it has jurisdiction under Companies Act s.246 to appoint a neutral interim manager and order a forensic audit where necessary to prevent injustice and preserve the subject matter of a shareholder dispute.

Outcome

Application granted with temporary injunctions issued, neutral interim manager to be appointed, and forensic audit ordered pending determination of the main company petition

Facts

The applicants are minority shareholders in three family-owned companies (3rd, 4th and 5th respondents) suing through their attorney. They allege that the 1st and 2nd respondents, who control the companies' day-to-day affairs, have engaged in unfairly prejudicial conduct including breach of fiduciary and statutory duties, failure to convene Annual General Meetings over an extended period, denial of access to company information and records, and mismanagement of company assets and rental income through unauthorized dealings and withdrawals. The applicants filed a substantive company petition seeking accountability, production of records and an audit. They brought this application for interim relief to preserve the companies' assets, funds and records pending determination of that petition. The respondents deny the allegations and assert that the companies are long-standing family businesses properly managed in accordance with the Companies Act, with annual returns filed and dividends paid. They contend that board meetings have been convened, any delays were due to practical challenges, and there is no mismanagement or risk to company assets.

Issues

  1. Whether the Applicants have established a prima facie case with serious and triable issues?
  2. Whether damages would be an adequate remedy in the circumstances of this dispute?
  3. Whether the balance of convenience favours the grant of the temporary injunction?
  4. Whether this Court is empowered to grant tailored interim governance relief, including the appointment of a neutral interim manager and the ordering of a forensic audit pending determination of the main petition?

Orders

  • Temporary injunction granted restraining the 1st and 2nd Respondents from selling, transferring, charging, mortgaging, leasing, licensing, encumbering, alienating, wasting or otherwise disposing of any movable or immovable assets of the 3rd, 4th and 5th Respondents pending determination of the main petition.
  • Temporary injunction granted restraining the 1st and 2nd Respondents from withdrawing, transferring, diverting, dissipating or otherwise dealing with the funds, rental income and bank accounts of the 3rd, 4th and 5th Respondents otherwise than in the ordinary course of business and subject to proper authority, full disclosure and accounting, pending determination of the main petition.
  • Temporary injunction granted restraining the 1st and 2nd Respondents from destroying, concealing, altering, removing, transferring out of the jurisdiction or otherwise interfering with the books of account, financial statements, management accounts, bank statements, tax records, tenancy schedules and agreements, minutes, resolutions, asset registers, electronic records and any other corporate records of the 3rd, 4th and 5th Respondents pending determination of the main petition.
  • Parties directed to agree to and appoint an interim neutral manager to oversee and preserve the affairs of the 3rd, 4th and 5th Respondents with powers to collect and bank income, preserve company assets and records, maintain the ordinary course of business, and render periodic reports to Court. If parties fail to agree within 30 days, they shall submit a shortlist of 3 credible potential managers to the court for appointment.
  • Order for a forensic audit into the accounts, financials and general affairs of the 3rd, 4th and 5th Respondents to be conducted by an independent auditor agreeable to the parties, at the cost of the companies. If parties fail to agree on a forensic auditor within 30 days, they shall submit a shortlist of 3 credible forensic audit firms to the court for appointment. Forensic audit to be conducted within 6 months and report tabled before the court.
  • Costs of the application to be in the cause.

Rules and key headnotes

Company Law — Minority Shareholder Rights — Prima Facie Case for Temporary Injunction
At the interlocutory stage, a minority shareholder seeking a temporary injunction need not prove their case to finality but must demonstrate the existence of serious triable issues that are not frivolous and deserve investigation at trial. Allegations of sustained failures in corporate governance, including non-convening of Annual General Meetings over an extended period, denial of access to company information, unilateral control of company affairs, unauthorized financial dealings, and conflict of interest by directors, constitute serious triable issues sufficient to establish a prima facie case.
Company Law — Shareholder Remedies — Adequacy of Damages in Governance Disputes
Damages are not an adequate remedy in a shareholder dispute concerning preservation of company assets, integrity of corporate records, and proper governance of companies. A shareholder's interest extends beyond quantifiable financial loss to include the maintenance of a transparent and properly managed corporate structure, which cannot easily be reduced to monetary terms. Where the substratum of the dispute involves accountability and access to information, damages are inherently inadequate because they do not restore transparency or rectify governance failures.
Civil Procedure — Interlocutory Injunctions — Balance of Convenience in Company Disputes
In determining whether to grant a temporary injunction in a company dispute, the court must adopt the course carrying the least risk of injustice. Where serious allegations of lack of transparency, concentration of control, and potential financial impropriety are raised against directors, the greater risk of injustice lies in refusing preservative relief. Injunctions restraining dealings outside the ordinary course of business and protecting company records do not halt company operations and impose no undue hardship on directors if the companies are being managed properly. A party acting lawfully and transparently should not be prejudiced by orders requiring adherence to proper accounting, preservation of assets, and maintenance of records.
Company Law — Unfair Prejudice — Interim Appointment of Neutral Manager
The court has jurisdiction under Companies Act s.246 to appoint a neutral interim manager to oversee and preserve the affairs of a company pending determination of an unfair prejudice petition. The appointment of a neutral and independent manager, as opposed to placing control in the hands of one faction, mitigates the risk of factional control and promotes impartial oversight. Where allegations involve lack of transparency, concentration of control, and potential financial impropriety, a purely prohibitory injunction may not be sufficient to safeguard the company, and a neutral interim manager provides a practical mechanism for preserving assets, ensuring proper accounting, and maintaining business continuity under independent supervision.
Company Law — Unfair Prejudice — Forensic Audit as Interim Relief
The court may order a forensic audit as interim relief in an unfair prejudice petition where allegations involve financial irregularities, undisclosed transactions, and lack of accountability. An independent forensic audit serves to preserve evidence, clarify the financial position of the companies, and assist the court in the eventual determination of the dispute. The ordering of a forensic audit is a measured and proportionate response to allegations of financial impropriety and is justified as part of a coherent framework of interim protection.

Legislation cited (9)

Cases cited (6)

  • Kiyimba Kaggwa v Hajji Abdul Nasser Katende [1985] HCB 43
  • Amrit Goyal v Hari Chand Goyal & Others (Miscellaneous Application No. 438 of 2001)
  • Cole v Premiere Care Holdings Ltd [2021] EWHC 1595 (Ch)
  • Garofalo v Crisp & Others [2024] EWHC 1737 (Ch)
  • Mission Capital plc v Sinclair [2008] EWHC 1339 (Ch)
  • Pringle & Others v Callard [2007] EWCA Civ 1075

Full judgment

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

Salim Mohamedali and Others v Mohammed Alibhai and Others (Miscellaneous Application No. 273 of 2026) [2026] UGHCCD 153 (4 May 2026)
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.