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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)

High Court · [2023] UGCOMMC 137 · 2023 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim measures of protection pending enforcement of international arbitral award
Decision
Interim measures granted preserving the Applicants' security interests pending determination of the application for recognition and enforcement of the arbitral award

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that Section 6 of the Arbitration and Conciliation Act does not apply post-award, but the court retains inherent jurisdiction under Section 98 of the Civil Procedure Act and Section 33 of the Judicature Act to grant interim measures protecting enforcement of an arbitral award. The Commissioner Land Registration's powers under Section 91 of the Land Act can result in cancellation of entries without recourse to court, making the application not premature. The court granted interim orders preventing the 1st Respondent from proceeding with title cancellation and restraining the 8th Respondent from registering documents affecting the Applicants' security interests pending determination of the application for recognition and enforcement.

Outcome

Interim measures granted preserving the Applicants' security interests pending determination of the application for recognition and enforcement of the arbitral award

Facts

The Applicants advanced a USD 10,000,000 mezzanine facility to the 2nd Respondent, secured by mortgages over properties, share pledges, and corporate and personal guarantees from the 3rd to 7th Respondents. Following default, the parties proceeded to ICC arbitration in London, and on 31 July 2023, an arbitral award was rendered in the Applicants' favour. The Applicants filed Arbitration Cause No. 72 of 2023 seeking recognition and enforcement. Meanwhile, the 2nd, 6th and 7th Respondents lodged a complaint with the 1st Respondent (Commissioner Land Registration) seeking cancellation of the mortgage entries on grounds that the 1st Applicant, being a partnership, lacked capacity to hold property. The 4th and 5th Respondents also passed board resolutions altering their shareholding, which the 8th Respondent (Uganda Registration Services Bureau) registered. The Applicants sought interim orders to prevent any dealings with the mortgaged properties and share pledges pending determination of their application to enforce the arbitral award.

Issues

  1. Whether the court has jurisdiction to grant interim measures of protection under Section 6 of the Arbitration and Conciliation Act after a final arbitral award has been rendered.
  2. Whether the Applicants have capacity and locus standi to bring this application.
  3. Whether the application is premature given that proceedings before the Commissioner Land Registration are at an information-gathering stage.
  4. Whether the court should exercise its inherent powers under Section 98 of the Civil Procedure Act to preserve the subject matter of arbitration pending enforcement of an award.
  5. Whether the interests of justice require restraining the 1st and 8th Respondents from taking actions that may affect the Applicants' security interests.

Orders

  • An order preventing the 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 pending the 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 stayed pending the determination of the main suit.
  • An order 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 may impede the Applicants' rights set out in the Final Arbitral Award pending court's determination of the Application for recognition and enforcement.
  • An order 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' shareholding to the position before the passing and registration of the said resolutions until disposal of the main suit.
  • All parties to bear their own costs of this application.

Rules and key headnotes

Arbitration & ADR — Interim Measures — Post-Award Protection — Scope of Section 6 of the Arbitration and Conciliation Act
Section 6 of the Arbitration and Conciliation Act does not extend to the grant of interim measures after a final arbitral award has been rendered and arbitral proceedings have terminated, as interim protective measures are designed to protect parties during the pendency of proceedings and may be modified or revoked once circumstances justifying them have ceased to exist.
Civil Procedure — Inherent Powers — Jurisdiction to Protect Enforcement of Arbitral Awards
Where a party alleges that actions are being undertaken that affect the ability to enforce an arbitral award, the court may invoke its inherent powers under Section 98 of the Civil Procedure Act and Section 33 of the Judicature Act to render reliefs in the interest of justice, notwithstanding that the statutory provision for interim measures under Section 6 of the Arbitration and Conciliation Act does not apply post-award.
Civil Procedure — Preliminary Objections — Right to Effective Remedy
All persons seeking to vindicate a right are entitled to an effective remedy comprising both the procedural right to effective access to a fair hearing and the substantive right to adequate redress, and the court may make a variety of reliefs to preserve an application for registration or recognition of an arbitral award by granting reliefs preventing any act or omission that may impair enforcement of the resultant award.
Land & Property — Commissioner's Powers — Section 91 of the Land Act — Prematurity of Applications to Restrain Exercise of Statutory Powers
Under Section 91 of the Land Act, the Commissioner Land Registration may cancel entries on the register of titles without recourse to court or any other forum, and these powers may be exercised even when court proceedings are ongoing. Accordingly, an application to restrain the Commissioner from proceeding is not premature where there is a real likelihood of mortgage or other entries being cancelled in the exercise of such statutory powers.
Civil Procedure — Joinder of Parties — Necessary Parties to Interim Applications
A party may join another party whose presence is necessary for the comprehensive determination of a matter of contention, especially where the party joined would be the one against whom the order sought would be enforced. Although a statutory body may not be a necessary party to an application for registration of an arbitral award, it is a necessary party to an application for interim orders that would require a positive action or deterrence from a certain course of action by that body.
Administrative Law — Restraining Statutory Bodies — Public Functions and Private Rights
A distinction ought to be drawn between an injunction affecting only parties to litigation and an injunction affecting the general public. Where an injunction affects parties joined to the matter who will argue out their rights in the main cause, it does not unbearably constrain the exercise of statutory functions, unlike cases seeking to suspend the operation of a law where a balancing act is required between private rights and public interest.
Arbitration & ADR — Enforcement of Awards — Interim Relief Against Third Parties
Where there is a need to preserve the status quo so that enforcement of an arbitral award is not impaired or rendered difficult or impossible, reliefs can be obtained even against third parties not privy to the arbitral agreement, award or the proceedings in the main cause for registration and enforcement if the interests of justice so require.

Legislation cited (12)

Cases cited (40)

  • Yaya Farajallah v Obur Ronald and Others (High Court Civil Appeal No. 81 of 2016)
  • Lweza Clays and Another v Tropical Bank and Another (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 and Another (Miscellaneous Application No. 186 of 2022)
  • Charles Sserunjogi v Tony Nkuubi (High Court Originating Summons No. 7 of 2019)
  • N. A. S. Airport Services v Attorney General [1959] EA 53
  • Rev George Lubega and Another v Luwero Town Council and Another (High Court Civil Suit No. 193 of 2009)
  • Yutta Luda Musoke v Greenland Bank (High Court Civil Suit No. 506 of 2001)
  • Night Nagujja v Namuwonge Agnes and Others (Miscellaneous Application No. 1878 of 2021)
  • Oscar Ssemawere v African Express Airways (Miscellaneous Application No. 259 of 2023)
  • Kisam Enterprises v Attorney General (Miscellaneous Application No. 742 of 2023)
  • Byaruhanga Mahmood v Top Finance Bank (Miscellaneous Application No. 250 of 2023)
  • Centenary Bank v Federation Of Association Of Uganda Exporters Limited and Others (Miscellaneous Application No. 474 of 2023)
  • Great Lakes Company Limited v Xsabo Power Limited (Miscellaneous Application No. 1041 of 2023)
  • AC Yafeng Construction Company Ltd v The Registered Trustees Of Living World Assembly Church and Another (Miscellaneous Applications Nos. 319 and 320 of 2021)
  • Ayissa Namiro v Uganda Marines Products Limited and Another (Miscellaneous Cause No. 78 of 2015)
  • Kagumaho Musana v Rama and 3 Others (Miscellaneous Application No. 933 of 2019)
  • Tullow Uganda Limited and Another v Jackson Wabyona and Others (Miscellaneous Application No. 443 of 2017)
  • Green Meadow Limited v Patrice Namisono (Miscellaneous Application No. 1368 of 2022)
  • Gids Consults Limited and Another v Naren Mehta (Miscellaneous Application No. 864 of 2022)
  • Saggu v Roadmaster Cycles Ltd [2002] 1 EA 258
  • Cwezi Properties v UDB (Miscellaneous Application No. 1315 of 2022)
  • Sarah Nabukenya and Others v Sulaiman Mukasa & Sons (Miscellaneous Applications Nos. 193 and 231 of 2022)
  • Departed Asians Property Custodian Board v Jaffer Brothers Ltd [1999] IEA 55
  • Uganda National Bureau of Standards v Ren Publishers Ltd and Multiplex Limited (Miscellaneous Application 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 (Miscellaneous Application No. 551 of 2018)
  • Kennaway v Thompson [1981] QB 88
  • Alcohol Association Of Uganda and Others v The Attorney General and Another (Miscellaneous Cause No. 744 of 2019)
  • Dainford Navigation Inc v PDVSA Petroleo S.A (Moscow Stars) [2017] EWHC 2150 (Comm)
  • Simba Properties Investment Company Limited and Others v Vantage Mezzanine Fund II Partnership and Others (Miscellaneous Application No. 414 of 2022)
  • Jawara v The Gambia (2000) AHRLR 107
  • Behangana Domaro and Another v The Attorney General (Constitutional Petition No. 53 of 2010)
  • Ochwa Olanya Charles v Attorney General (High Court Civil Suit No. 41 of 2012)
  • China Citic Bank Corporation Limited v Yan, 2016 BCSC 2332
  • Sunlodges Ltd v The United Republic of Tanzania, 2020 ONSC 8201
  • Misc. Cause 205/2021
  • Vantage Mezzanine Fund II Partnership v Simba Properties Investment Co. Ltd and Another (Miscellaneous Application No. 201 of 2020)
  • HCMC 205/2021

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 UGCommC 137 (17 November 2023)
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