Wakilii

Sugar Corporation of Uganda Ltd. v Kanoblic Group of Companies Ltd. (Civil Application 653 of 1996)

High Court · [1997] UGHC 37 · 1997 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal under Order 46 Rules 1, 7 and 8A of the Civil Procedure Rules seeking to set aside a Deputy Registrar's certificate of interest and to correct the calculation of interest from compound to simple interest
Decision
Certificate of interest set aside; garnishee order discharged; refund ordered to appellant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the arbitration award which stated interest at 30% per annum from 1 October 1992 till payment in full did not expressly or impliedly award compound interest. The Deputy Registrar's certificate calculating compound interest was set aside. Where an award specifies an interest rate but does not state that interest is to be compounded, simple interest applies. The decretal amount and simple interest had already been paid in full from security deposited. The garnishee order was set aside and the judgment debtor was entitled to a refund of excess payment.

Outcome

Certificate of interest set aside; garnishee order discharged; refund ordered to appellant

Facts

The respondent obtained an arbitration award in January 1995 for UGX 45,475,341 special damages, UGX 10,000,000 general damages, and interest on both at 30% per annum from 1 October 1992 till payment in full. The appellant unsuccessfully challenged the award and appealed to the Supreme Court. Pending appeal, the appellant deposited UGX 130,443,601 as security. After the Supreme Court dismissed the appeal, this sum was paid to the respondent in settlement. On 3 October 1996, the respondent's counsel wrote to the Deputy Registrar requesting UGX 62,233,667 as additional interest, calculated on a compound basis. The Deputy Registrar issued a certificate of interest on 1 November 1996 certifying this amount as due. The respondent then commenced garnishee proceedings against the appellant's bank account. The appellant, learning of the certificate and garnishee proceedings, brought this appeal to set aside the certificate, arguing that the arbitration award contemplated simple interest only, not compound interest.

Issues

  1. Whether the Deputy Registrar's certificate of interest dated 1st November 1996, which calculated interest on a compound basis, should be set aside.
  2. Whether the interest awarded in Arbitration Award No. 7 of 1994 at 30% per annum should be calculated on a simple interest basis rather than on a compound interest basis.
  3. Whether the garnishee proceedings based on the certificate of interest should be set aside.

Orders

  • Appeal allowed.
  • Deputy Registrar's Certificate of Interest dated 1st November 1996 set aside.
  • Interest on the arbitration award to be calculated at the rate of 30% per annum on a simple interest basis.
  • Respondent/Judgment Creditor ordered to refund UGX 8,403,193 to the Appellant/Judgment Debtor.
  • Order of attachment of the Appellant/Judgment Debtor's account No. 0150107032 with Bank of Baroda (U) Ltd. set aside.
  • Each party to bear its own costs of both the garnishee proceedings and the appeal.

Rules and key headnotes

Arbitration Awards — Interpretation — Interest Calculation
Where an arbitration award specifies an interest rate without expressly stating that interest is to be calculated on a compound basis, the interest awarded is simple interest, not compound interest.
Interest — Judicial Interpretation — Simple vs Compound
A court cannot enforce an order for compound interest where no such order has been made. Consent of the parties subsequent to an award cannot entitle a judgment creditor to compound interest which was not awarded at the time the award was made.
Deputy Registrar — Certificate of Interest — Powers and Limits
A Deputy Registrar's certificate of interest which calculates interest on a compound basis when the underlying judgment or award contemplates simple interest is erroneous and liable to be set aside.
Res Judicata and Acquiescence — Fresh Issues
The failure of a party to raise the question of whether interest should be simple or compound at earlier stages of proceedings does not constitute res judicata or acquiescence where compound interest was not an express issue before the court at those stages.

Legislation cited (7)

Cases cited (2)

  • Patel v Spear Motors Ltd. (Civil Appeal No. 4 of 1991)
  • Re Maira [1989] 1 All ER 229

Full judgment

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Sugar Corporation of Uganda Ltd. v Kanoblic Group of Companies Ltd. (Civil Application 653 of 1996) [1997] UGHC 37 (26 February 1997)
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.