Wakilii

Simba Properties Investiment Company Limited and Another v Kirunda and 3 Others (Miscellaneous Application 671 of 2022)

High Court · [2022] UGCOMMC 161 · 2022 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from civil suit challenging validity of mortgage sale advertisement
Decision
Application dismissed and underlying suit struck out

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for temporary injunction and struck out the underlying suit. The matters in dispute were subject to a valid and operative arbitration agreement and ongoing arbitral proceedings. The respondents acted as agents of a disclosed principal and could not be sued personally. The suit was misconceived and based on a misinterpretation of an earlier ruling regarding the mortgagee's capacity to sue.

Outcome

Application dismissed and underlying suit struck out

Facts

The applicants borrowed money from Vantage Mezzanine Fund II Partnership under a Mezzanine Term Facility Agreement dated 11 December 2014, secured by mortgages over multiple properties. Following default, the respondents, acting as advocates and bailiff for the mortgagee, advertised the mortgaged properties for sale in May 2022. The applicants had previously filed Civil Suit No. 988 of 2019, which was dismissed and referred to arbitration by court order on 16 June 2021. Arbitral proceedings commenced at the International Chamber of Commerce in London. The applicants then filed a new suit (Civil Suit No. 424 of 2022) challenging the validity of the mortgage sale on grounds that the mortgagee was non-existent, relying on a ruling in High Court Miscellaneous Cause No. 205 of 2022. The applicants sought a temporary injunction restraining the sale pending determination of the suit.

Issues

  1. Whether the applicants established a prima facie case with a probability of success for the grant of a temporary injunction.
  2. Whether the applicants would suffer irreparable injury if the injunction was not granted.
  3. Whether the balance of convenience favoured the grant of the injunction.
  4. Whether the court had jurisdiction to entertain the suit and application given the existence of a valid arbitration agreement.
  5. Whether the respondents, as agents of a disclosed principal, could be sued in their personal capacities.
  6. Whether the suit and application constituted an abuse of court process.

Orders

  • Application dismissed with costs to the respondents.
  • Underlying Civil Suit No. 0424 of 2022 struck out with costs to the defendants.

Rules and key headnotes

Arbitration — Jurisdiction of Court — Stay of Proceedings — Valid Arbitration Agreement
Where parties have entered into a valid, operative arbitration agreement capable of being performed, and an arbitrable dispute has arisen between them, the court must refer the matter to arbitration and will not exercise jurisdiction over disputes arising out of, relating to, or having connection with the agreement that are subject to the arbitration clause.
Arbitration — Scope of Arbitration Clause — Disputes Relating to Validity and Enforceability
An arbitration clause providing that any dispute arising out of, relating to, or having connection with an agreement, including disputes as to its existence, validity, interpretation, performance, breach, or the consequences of its nullity, encompasses disputes concerning the enforceability of mortgages created as collateral to that agreement.
Arbitration — Court Intervention — Limitation on Jurisdiction
Except as provided in the Arbitration and Conciliation Act, no court should intervene in matters submitted to arbitration, and the court must grant a stay of any proceeding brought before it regarding a dispute that is the subject of a submission to arbitration, unless the arbitration agreement is null and void, inoperative, or incapable of being performed.
Agency — Disclosed Principal — Liability of Agent
A person who acts as another's agent in a transaction, with the knowledge of the plaintiff, is not liable to the plaintiff in respect of that particular transaction. Where an agent acts for a disclosed principal, the agent is not personally liable and only the principal can sue and be sued.
Partnership Law — Registration Requirements — Carrying on Business in Uganda
Registration under the Partnership Act is mandatory only for firms carrying on business in Uganda. Carrying on business connotes regular business activities involving routine and continuous involvement in an activity undertaken for profit, requiring actual presence in the jurisdiction (such as maintaining physical premises) plus a degree of business activity sustained over time. Virtual presence alone does not suffice.
Precedent — Obiter Dicta — Binding Effect
Comments, suggestions, or observations made by a trial judge that were not necessary for resolving the matter in issue are obiter dicta and are not legally binding on other courts. Only the ratio decidendi, being the reason necessary for the decision, constitutes binding precedent.
Legal Profession — Independence of Advocates — Protection from Vexatious Suits
Advocates should not be identified with their clients or their clients' causes as a result of discharging their functions. Advocates must be able to perform all professional functions without intimidation, hindrance, harassment, or improper interference, including freedom from vexatious suits for actions taken in accordance with recognised professional duties. Suing advocates for representing clients constitutes an affront to the right to legal representation.

Legislation cited (10)

Cases cited (19)

  • E.A. Industries v Trufoods [1972] EA 420
  • Fellowes and Son v Fisher [1976] 1 QB 122
  • American Cyanamid Co v Ethicon Limited [1975] AC 396
  • Geilla v Cassman Brown Co Ltd [1973] EA 358
  • GAPCO Uganda Limited v Kaweesa and Another (Miscellaneous Application No. 259 of 2013)
  • Godfrey Sekitoleko and Four Others v Seezi Peter Mutabazi and Two Others [2001-2005] HCB 80
  • Nsubuga and Another v Mutawe [1974] EA 487
  • In the Matter of C Kasozi Ddamba [1980] HCB 115
  • M/S Muwayire Nakana & Co Advocates v Departed Asians Property Custodian Board and Another [1987] HCB 91
  • Gladys Nyangire Karumu v Mohammed Kalisa (Miscellaneous Application No. 731 of 2015)
  • Humphrey Nzeyi v Bank of Uganda and Another (Constitutional Application No. 1 of 2013)
  • One Solutions Ltd v Eastern and Southern African Management Institute (Miscellaneous Cause No. 33 of 2015)
  • Dry Goods Co. v. Lester, 60 Ark. 120, 29 S. W. 34, 27 L. It. A. 505, 40 Am. St. Rep. 102
  • Marson v Morton [1986] 1 WLR 1343
  • H.M.B. Holdings Ltd v Antigua and Barbuda 2021 SCC 44
  • Adams v Cape Industries Plc [1990] 1 Ch 433
  • Morelle v Wakeling [1955] 2 QB 379
  • Friendship Container Manufacturers Ltd v Mitchell Cotts (K) Ltd [2001] 2 EA 338
  • Pheneas Agaba v Swift Freight (Civil Suit No. 1000 of 1999)

Full judgment

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Simba Properties Investiment Company Limited and Another v Kirunda and 3 Others (Miscellaneous Application 671 of 2022) [2022] UGCommC 161 (15 June 2022)
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.