Wakilii

Zenagalia v Sari Consulting Limited and 2 Others (Criminal Miscellaneous Application No. 91 of 2020)

Industrial Court · [2021] UGIC 32 · 2021 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for security for costs arising from pending labour dispute claim
Decision
Application granted with order for bank guarantee of UGX 500,000,000 to be deposited within 3 weeks

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court granted an application for security for costs against a foreign respondent company. The court held that where a foreign defendant has failed to demonstrate capacity to satisfy a potential decree and has no proven assets or ongoing contracts of sufficient value within the jurisdiction, the court may order a bank guarantee to preserve the integrity of its orders and protect the applicant's interests pending determination of the main suit.

Outcome

Application granted with order for bank guarantee of UGX 500,000,000 to be deposited within 3 weeks

Facts

The applicant filed a labour dispute (LDR No. 229/2019) claiming salary arrears of USD 104,134 against the 1st respondent, a foreign company. The 1st respondent raised a preliminary objection on jurisdiction, arguing that the employment contract provided for arbitration in Rome under Italian law. The Industrial Court overruled the objection. The applicant then sought security for costs, alleging that the 1st respondent was a foreign company with no known assets in Uganda and that its only known business was a consultancy contract for road upgrading works nearing completion. The applicant feared that once paid, the respondent would leave Uganda, making any decree unenforceable. The 1st respondent countered that it had registered a Ugandan subsidiary, maintained bank accounts, and had ongoing contracts with UNRA and the Ministry of Water.

Issues

  1. Whether the respondent, being a foreign company, has sufficient ongoing works or property within Uganda to satisfy a potential decree in the main labour dispute.
  2. Whether the court should order security for costs by way of attachment before judgment or bank guarantee.

Orders

  • The applicant is ordered to deposit into court within 3 weeks from the date of this ruling a bank guarantee of UGX 500,000,000 as security for the respondent to appear and satisfy any decree that may arise from LDR 229/2019.
  • The applicant is required to follow up this case and fix it for hearing so that it is completed by 28th February 2022, failure of which, unless otherwise ordered by this court, this order shall lapse.
  • No order as to costs.

Rules and key headnotes

Civil Procedure — Security for Costs — Attachment Before Judgment — Foreign Defendant
Where a defendant is a foreign company without proven assets or property within the jurisdiction and has failed to demonstrate capacity to satisfy a potential decree, the court may order security for costs by way of bank guarantee to preserve the integrity of court orders and protect the applicant's interests pending determination of the main suit.
Civil Procedure — Security for Costs — Burden of Proof
In an application for security for costs under Order 40 rule 1 of the Civil Procedure Rules, the burden lies on the respondent to rebut the applicant's assertion that the respondent lacks capacity to satisfy a decree by providing concrete evidence of assets, ongoing contracts of sufficient value and duration, or other property within the jurisdiction.
Civil Procedure — Interlocutory Applications — Purpose of Attachment Before Judgment
The purpose of an interlocutory application for attachment before judgment is to preserve a fair balance between the parties and give them due protection while awaiting the final outcome of the proceedings, balancing the need to preserve the applicant's interest with the need to protect the rights of innocent third parties.

Legislation cited (6)

Cases cited (3)

  • Welt Machines Engineering Ltd v China Road and Bridge Corporation and 2 Others (Miscellaneous Application No. 51 of 2015)
  • Makubuya Enock Willy T/A Polla Plast v Songdoh Films (U) Ltd and Another (Miscellaneous Application No. 321 of 2018)
  • Halsbury's Laws of England 4th Edition Volume 37 para 326

Full judgment

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

Zenagalia_v_Sari_Consulting_Limited_and_2_Others_(Criminal_Miscellaneous_Application_No._91_of_2020)_[2021]_UGIC_32_(3_March_2021)
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.