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Steam Investments Limited & 3 Others v Equity Bank Uganda Limited (Miscellaneous Application 1429 of 2022)

High Court · [2024] UGCOMMC 101 · 2024 Application Granted — Suit Struck Out AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend a summary suit arising from a credit facility dispute
Decision
HCCS No. 820 of 2022 struck out; parties directed to proceed with HCCS No. 133 of 2022

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court struck out HCCS No. 820 of 2022 on the ground that it offended the rule of lis pendens under section 6 of the Civil Procedure Act. The matters in issue, the parties, and the pending suit HCCS No. 133 of 2022 met all three tests for lis pendens: the matters were directly and substantially similar, the parties were the same or substantially similar, and the previous suit was pending in a court of competent jurisdiction. The subsequent suit was an abuse of court process.

Outcome

HCCS No. 820 of 2022 struck out; parties directed to proceed with HCCS No. 133 of 2022

Facts

The respondent bank advanced a credit facility of UGX 1,500,000,000 to the first applicant on 10 March 2018, secured by a mortgage, personal guarantees, and receivables. The facility was varied twice, in 2020 and 2021. The first applicant defaulted, alleging frustration due to non-payment by a third party and COVID-19 effects. The first applicant filed HCCS No. 133 of 2022 seeking declarations that it was not indebted and that the mortgage and credit facilities were illegal. Subsequently, the respondent filed HCCS No. 820 of 2022 as a summary suit to recover UGX 3,162,936,609 from all four applicants. The applicants sought unconditional leave to appear and defend HCCS No. 820 of 2022, arguing it offended the lis pendens rule.

Issues

  1. Whether HCCS No. 820 of 2022 offends the rule of lis pendens under section 6 of the Civil Procedure Act.
  2. Whether the Applicants merit the grant of unconditional leave to appear and defend the summary suit.

Orders

  • HCCS No. 820 of 2022 is struck out under section 98 of the Civil Procedure Act and section 17(2) of the Judicature Act.
  • The parties are directed to prosecute HCCS No. 133 of 2022 without further delay.
  • Each party shall bear their own costs.

Rules and key headnotes

Civil Procedure — Lis Pendens — Test for Determining Whether Subsequent Suit Offends Rule
A subsequent suit offends the rule of lis pendens under section 6 of the Civil Procedure Act where: (a) the matters in issue are directly and substantially the same as in a previously instituted suit; (b) the parties are the same or substantially similar, or litigate under the same title; and (c) the previous suit is pending in a court of competent jurisdiction.
Civil Procedure — Lis Pendens — Matters in Issue Must Be Substantially Similar
For matters in issue to be substantially similar, the test examines the entire subject matter of both suits, not merely isolated issues. The court analyzes the pleadings and reliefs sought in both the previous and contested suits.
Civil Procedure — Lis Pendens — Parties Need Not Be Identically Similar
For the lis pendens rule to apply, it is not necessary that all parties in both suits be identically the same. If one party with substantially similar interests appears in both suits, the test is satisfied.
Civil Procedure — Abuse of Process — Subsequent Suit on Same Subject Matter
Where a subsequent suit offends the rule of lis pendens, it constitutes an abuse of court process and must be struck out under section 98 of the Civil Procedure Act and section 17(2) of the Judicature Act.
Civil Procedure — Lis Pendens — Mandatory Nature of Section 6
Section 6 of the Civil Procedure Act is couched in mandatory terms. When a question arises as to the competence of a suit with reference to this section, the court must stay the subsequent suit.

Legislation cited (4)

Cases cited (6)

  • M.M.K Engineering v Mantrust Uganda Ltd (Miscellaneous Application No. 128 of 2012)
  • Maluku Inter Globle Trade Agency V Bank of Uganda (1985) HCB 65 at 66
  • Kotetcha Versus Muhammed (2002) E.A 112
  • Sembule Investments v Uganda Baati Ltd (Miscellaneous Application No. 664 of 2009)
  • Springs International Hotel Ltd v Hotel Diplomate Ltd & Another (Civil Suit No. 227 of 2011)
  • Tindyebwa Stephen v Alpha International Investments Ltd (Miscellaneous Application No. 0789 of 2005)

Full judgment

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

Steam Investments Limited & 3 Others v Equity Bank Uganda Limited (Miscellaneous Application 1429 of 2022) [2024] UGCommC 101 (30 April 2024)
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.