Wakilii

Vantage Mezzanine Fund II Partnership & Vantage Mezzanine Fund II Proprietary Limited v Commissioner Land Registration & 7 Others (Miscellaneous Application 2484 of 2023)

High Court · [2023] UGCommC 2484 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim measures of protection arising from an arbitral award, seeking orders restraining respondents from taking actions affecting applicants' security interests pending enforcement proceedings
Decision
Application granted with interim orders restraining 1st and 8th Respondents from taking actions affecting applicants' security interests pending enforcement of arbitral award

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that while Section 6 of the Arbitration and Conciliation Act does not apply to post-award interim relief as arbitral proceedings terminate upon rendering of a final award, the High Court retains inherent jurisdiction under Section 98 of the Civil Procedure Act and Section 33 of the Judicature Act to grant interim measures necessary for the ends of justice. The court granted orders restraining the Commissioner Land Registration from proceeding with cancellation of mortgage entries and the Uganda Registration Services Bureau from registering documents affecting the applicants' security interests, pending determination of the enforcement proceedings.

Outcome

Application granted with interim orders restraining 1st and 8th Respondents from taking actions affecting applicants' security interests pending enforcement of arbitral award

Facts

The applicants advanced a USD 10 million mezzanine facility to the 2nd respondent under a Mezzanine Term Facility Agreement dated December 11, 2014. The 3rd to 5th respondents provided corporate guarantees and the 6th respondent provided a personal guarantee. The 2nd to 7th respondents secured the facility with legal and equitable mortgages over various properties and share pledges. Following default, a dispute arose and was referred to ICC arbitration in London. On July 31, 2023, the arbitral tribunal rendered a final award in favour of the applicants. On October 4, 2023, an addendum to the award was issued. The applicants then filed proceedings seeking recognition and enforcement of the award. Meanwhile, the 2nd, 6th and 7th respondents filed a complaint with the Commissioner Land Registration seeking cancellation of mortgage entries, alleging the 1st applicant as a partnership lacks capacity to hold property. The 4th and 5th respondents also filed board resolutions altering shareholding in favour of the 2nd and 6th respondents. The applicants sought interim orders preventing interference with their security interests pending enforcement of the award.

Issues

  1. Whether the court has jurisdiction to grant interim protective measures after an arbitral award has been rendered but before enforcement.
  2. Whether Section 6 of the Arbitration and Conciliation Act applies to post-award interim relief.
  3. Whether the court can exercise inherent jurisdiction under Section 98 of the Civil Procedure Act to grant interim relief in aid of arbitration enforcement.
  4. Whether the applicants have capacity and locus standi to bring the application.
  5. Whether the application is premature or speculative given that the Commissioner Land Registration has not yet made a final decision.
  6. Whether the 1st and 8th Respondents should be restrained from exercising statutory powers.

Orders

  • An order issues preventing 1st Respondent from taking any actions or conducting any proceedings in respect of the Certificates of Title that the 2nd to 7th Respondents mortgaged to the Applicants, that would affect the Applicants' rights and the merits of the Final Arbitral Award and its Addendum pending court's determination of the Application for recognition and enforcement of the arbitral award.
  • The proceedings currently pending before the 1st Respondent in respect of the complaint by the 2nd, 6th and 7th Respondents are stayed pending the determination of the main suit.
  • An order issues preventing the 8th Respondent from taking any actions, registering any documents, making any alterations to the Register or effecting any changes in the ownership, governance and management of the 2nd to 5th Respondents that relate to or may in any way impede the Applicants' rights set out in the Final Arbitral Award and its Addendum pending court's determination of the Application for recognition and enforcement of the Arbitral Award.
  • An order issues suspending the registration and validity of the board resolutions dated 14th August 2023 and 6th September 2023 registered by the 8th Respondent on 12th September 2023 and returning 4th and 5th Respondents' respective shareholding to the position it was before the passing and/or registration of the said resolutions until disposal of the main suit.
  • All parties bear their costs for this application.

Rules and key headnotes

Arbitration & ADR — Interim Measures — Post-Award Relief — Jurisdiction of Court
Section 6 of the Arbitration and Conciliation Act, which permits the court to grant interim measures of protection before or during arbitral proceedings, does not extend to post-award interim relief after arbitral proceedings have terminated by rendering of a final award.
Arbitration & ADR — Termination of Proceedings — When Arbitral Proceedings End
Arbitral proceedings terminate when a final award is given. It would be incorrect to conclude that arbitral proceedings remain ongoing until the award is registered in all potential jurisdictions, as this would create an indefinite extension of proceedings.
Civil Procedure — Inherent Jurisdiction — Power to Grant Interim Relief in Aid of Arbitration
Where actions are being undertaken that affect the ability to enforce an arbitral award, the court retains inherent jurisdiction under Section 98 of the Civil Procedure Act and Section 33 of the Judicature Act to grant interim relief in the interests of justice, even where Section 6 of the Arbitration and Conciliation Act does not apply.
Civil Procedure — Preliminary Objections — Matters Requiring Evidence
Matters that require evidence to be ascertained cannot be entertained as preliminary objections but must instead be reserved for determination in the main suit. A preliminary objection raises a pure point of law based on a commonly accepted set of facts as pleaded by both parties.
Civil Procedure — Joinder of Parties — Necessity for Enforcement of Orders
A party may be joined in interim proceedings even where they are not necessary parties to the main suit, where their presence is necessary for the enforcement of the interim orders sought and to afford them a hearing before a decision affecting them is rendered.
Land & Property — Commissioner's Powers under Section 91 — Effect on Interim Relief Applications
The Commissioner Land Registration's power under Section 91 of the Land Act to cancel entries on the register without recourse to court creates a real likelihood of alteration of title entries even where court proceedings are ongoing. An application for interim relief to prevent such cancellation is therefore not premature where examination proceedings have commenced.
Civil Procedure — Interim Relief — Preservation of Subject Matter Pending Enforcement
Where there is a need to preserve the status quo so that enforcement is not impaired or rendered difficult or impossible, interim relief can be obtained even against third parties not privy to the arbitral agreement or award, if the interests of justice so require and such relief is necessary to ensure an effective remedy.

Legislation cited (12)

Cases cited (37)

  • Yaya Farajallah v Obur Ronald & Ors (High Court Civil Appeal No. 81 of 2016)
  • Lweza Clays & Anor v Tropical Bank & Anor (Supreme Court Civil Appeal No. 31 of 2018)
  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696
  • Ssekabira Herbert v Ssuna Mulema & Anor HCMA 186/2022
  • Charles Sserunjogi v Tony Nkuubi HCOS 7/2019
  • N. A. S. Airport Services v Attorney General [1959] EA 53
  • Rev George Lubega & Anor v Luwero Town Council & Anor HCCS 193/2009
  • Yutta Luda Musoke v Greenland Bank HCCS 506/2001
  • Night Nagujja v Namuwonge Agnes & Ors HCMA 1878/2021
  • Oscar Ssemawere v African Express Airways HCMA 259/2023
  • Kisam Enterprises v Attorney General HCMA 742/2023
  • Byaruhanga Mahmood v Top Finance Bank HCMA 250/2023
  • Centenary Bank v Federation Of Association Of Uganda Exporters Limited & Ors HCMA 474/2023
  • Great Lakes Company Limited v Xsabo Power Limited HCMA 1041/2023
  • AC Yafeng Construction Company Ltd v The Registered Trustees Of Living World Assembly Church & Anor HCMAs 319 and 320 of 2021
  • Ayissa Namiro v Uganda Marines Products Limited & Anor HCMC 78/2015
  • Kagumaho Musana v Rama and 3 Others HCMA 933 of 2019
  • Tullow Uganda Limited & Anor v Jackson Wabyona & Ors HCMA 443/2017
  • Green Meadow Limited v Patrice Namisono HCMA 1368/2022
  • Gids Consults Limited & Anor v Naren Mehta HCMA 864/2022
  • Saggu v Roadmaster Cycles Ltd (2002) 1 EA 258
  • Cwezi Properties v UDB HCMA 1315 of 2022
  • Sarah Nabukenya & Ors v Sulaiman Mukasa & Sons HCMA 193 and 231 of 2022
  • Departed Asians Property Custodian Board v Jaffer Brothers Ltd [1999] IEA 55
  • Uganda National Bureau of Standards vs Ren Publishers Ltd & Multiplex Limited HCMA No. 635 of 2019
  • R v Secretary of State for Transport ex.p Factortame Ltd [1990] 2 AC 85
  • Shell Petroleum Development Company of Nigeria Limited & Another v The Governor of Lagos State & Others 5 ALL NTC
  • ACP Bakaleke Siraj v Attorney General HCMA No. 551 of 2018
  • Kennaway v Thompson [1981] QB 88
  • Alcohol Association Of Uganda & Ors v The Attorney General & Anor HCMC 744/2019
  • Dainford Navigation Inc v PDVSA Petroleo S.A (Moscow Stars) [2017] EWHC 2150 (Comm)
  • Simba Properties Investment Company Limited & Ors v Vantage Mezzanine Fund II Partnership & Ors HCMA 414/2022
  • Jawara v The Gambia (2000) AHRLR 107
  • Behangana Domaro & Anor v The Attorney General (Constitutional Petition No. 53 of 2010)
  • Ochwa Olanya Charles v Attorney General HCCS 41/2012
  • China Citic Bank Corporation Limited v Yan, 2016 BCSC 2332
  • Sunlodges Ltd v The United Republic of Tanzania, 2020 ONSC 8201

Full judgment

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Vantage_Mezzanine_Fund_II_Partnership_&_Vantage_Mezzanine_Fund_II_Proprietary_Limited_v_Commissioner_Land_Registration_&_7_Others_(Miscellaneous_Application_2484_of_2023)_[2023]_UG
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