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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-MA-0173 OF 2006
(Arising out of
HCT-00-CC-CS-0137-2006)
ATTORNEY GENERAL
EX – RELATOR
:::::::::::::::::::::::::::: APPLICANT
1. COTTON
DEVELOPMENT ORGANISATION (CDO)
2. UGANDA GINNERS & COTTON
EXPORTERS
ASSOCIATION LTD
VERSUS
UGANDA COTTON KLUB (U) LTD ::::::::::::
RESPONDENT
BEFORE: THE HONOURABLE MR. JUSTICE YOROKAMU
BAMWINE
R U L I N G:
This application is
of some unusual nature in the sense that it lacks any comparable precedent in
this country.
It was brought by way of Chamber Summons under 0.37 rr 2
and 9 of the Civil Procedure Rules and S. 98 of the Civil Procedure Act and,
I’m advised, S. 33 of the Judicature Act, Cap 13. It seeks an order of a
temporary injunction against the Respondent restraining
it from continuing to
carry out its business in breach of law, in particular the construction of a
ginnery in Pallisa District.
It is also prayed that costs be provided
for.
The application is supported by the affidavits of Joseph Matsiko,
the Ag. Director of Civil Litigation in the Attorney General’s
Chambers
and one Jolly Sabune, the Managing Director of the first relator.
The
Respondent has also filed an affidavit through Edmund Wakida, Company Secretary
of the Respondent.
The main suit is a relator action by the Attorney
General at the instance and request of COTTON DEVELOPMENT ORGANISATION [CDO] and
UGANDA GINNERS & COTTON EXPORTERS ASSOCIATION LTD.
The substance of
the Applicants’ claim in the main suit is that CDO is the Regulator of the
Cotton industry in Uganda. That
the Respondent is in breach of the regulatory
provisions of the Cotton Development Act and the entire provisions of the Cotton
(Amendment)
Regulations, S.1. No. 39 of 2005 and the Establishment of Zones and
Isolated and Segregated Areas Regulations, S.1. No. 40/2005.
As I will show
presently, the Respondent’s argument is that the Regulations above are
unconstitutional in that they are inconsent
with the Parent
Act.
Counsel:
Mr. Nester Byamugisha for Applicants.
Mr.
Andrew Bashaija and Precious Ngabirano for the Respondents.
In as far as
this application is concerned, the grounds in support of it are not any
different from those stated in the main suit.
They are that:
1. The
Applicant has filed the main suit at the instance and relation of Uganda Cotton
Organisation (CDO) and Uganda Ginners and
Cotton Exporters Association Ltd
(UGCEA) who are the regulator and dealers in the cotton industry vide the
Cotton Development Act;
No 30 of 2000, the Cotton (Amendment) Regulations S.1.
No. 39 of 2005 and the Cotton Establishment of Zones and Isolated and
Segregated
Areas, Regulations (S.1 No. 40 of 2005), the Respondent has
deliberately carried out and continues to carry out activities in the
industry
with impunity, fragrantly and blatantly in breach of the law and regulations
implemented by CDO and arrangements between
the individual ginners and UGCEA,
Government and CDO.
2. Although CDO is the statutory regulator of the Cotton
industry, the law does not confer on it sanctions effective to restrain
the
Respondent from continuing to breach the law and regulations.
3. The
continued breach of the law by the Respondent will suffer greatly the
activities of the dealers in cotton industry individually
and collectively
through the UGCEA and hamper the regulatory role of CDO thereby drastically
affecting the cotton industry.
4. That CDO or UGCEA do in law lack the
capacity to sue the Respondent seeking an injunction as their cause or action
can only be
based on breach of the law of which at common law, the Applicant is
the only party competent to complain in a Court of law.
5. The Applicant is
satisfied that in the circumstances of this case, it is reasonable to conclude
that the Applicants (sic) continued
unlawful activities will continue unless
and until effectively restrained by the law and nothing short of an injunction
prayed
for will effectively restrain it.
From the above, one can see that
the grounds in support of the application do not spell out acts which the
Applicants consider to
be unlawful and therefore actionable. However, the
affidavit of Joseph Matsiko clearly spells out the objectives and duties of CDO
under the relevant law. They are stated in para 5 thereof. In particular, CDO
is stated to be enjoined to register in accordance
with the regulations any
person to undertake the activities laid there under including those complained
of in respect of the Respondent
to wit, dealing in cotton seed, dealing in seed
cotton, establishing and operating a ginnery and dealing in lint cotton and
every
holder of a registration is required to furnish CDO with all manner of
information prescribed by it. It is for instance stated that
for any person to
gin raw cotton or bale lint cotton he/she has to have been registered by CDO in
accordance with the law.
It is averred by the A.G that there are existing
ginners in Bukedi Zone who have over time invested heavily in cotton production
in
that zone and increased production there.
From the pleadings, while
construction of a ginnery in Pallisa has been singled out, the Chamber Summons
does not clearly bring out
the activities on the part of the Respondent which
are the cause of bad blood between the parties to this suit. But if one goes
beyond the Chamber Summons itself and studies the summary of Evidence
accompanying the plaint in the main suit, one is treated to
a multitude of them.
At this stage, these are just allegations.
For purposes of this
application, what the affidavit of Mr. Matsiko brings out clearly is the fact
that there have been high level
consultations between the parties regarding grey
areas in the cotton industry which consultations have yielded no results to the
extent that the A.G. feels that nothing short of a permanent injunction will
effectively restrain the Respondents. Hence the suit.
0.37 r 2 (1) under
which the application is brought provides:
“2 (1) In any suit for restraining the Defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the main suit or not, the Plaintiff may, at any time after the commencement of the suit, and either before or after Judgment, apply to Court for a temporary injunction to restrain the Defendant from committing the breach of contract or injury complained of or any injury of a like kind arising out of the same contract or relating to the same property or right” (emphasis mine).
While in an application under 0.37 r 1
it must essentially be shown that the property in dispute is in danger of being
wasted, damaged
or alienated by any party to the suit, it appears to me that all
that is required under 0.37 r 2 (1) where the instant application
falls is
essentially that there exists a suit for restraining the Defendant from
committing a breach of contract or other injury
of any kind. While such suit is
pending determination, the Plaintiff is at liberty to apply to Court for a
temporary injunction
to restrain the repetition or continuance of the breach or
injury.
In my view, to argue that the application should fail because the
Applicant has not disclosed what kind of injury has been suffered
is to
trivialise the issues in the main suit. I don’t consider that to be fair
given that the plaint can be amended at any
stage of the proceedings to provide
for what may have been omitted, advertently or otherwise.
Turning now to
the application itself, grant of a temporary injunction is a matter within the
discretion of Court. The law requires,
however, that the discretion be
exercised judicially. Thus over the years, the Courts have evolved principles
to consider while
determining whether or not to grant a temporary injunction.
Spry V. P (as he then was) set out the conditions for the grant as being:
“First, an Applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not be granted unless the Applicant might otherwise suffer irreparable injury, which would not be adequately compensated by an award of damages. Thirdly, if the Court is in doubt, it will decide an application on the balance of convenience.”
See: Giella –Vs- Cassman Brown
1973 EA 358.
Both counsel have in this case made very well researched
arguments for and against the orders sought herein. It is not my intention
to
reproduce them here.
I have already outlined the facts in relation to
this application. What I have found to be disputed are questions of law, and to
some extent two particular questions, namely, the question of the A.G’s
involvement in a matter that does not appear to concern
him and the question of
the principles on which I ought to exercise the jurisdiction.
The
jurisdiction of Court is itself not in any serious doubt considering the
provision of S. 38 (1) of the Judicature Act, Cap 13.
Under that law, the H.C.
shall have power to grant an injunction to restrain any person from doing any
act as may be specified by
the H.C.
Arguing the question of the A.G’s
involvement, no doubt with a mind to the statutory law of this country, Mr.
Ngabirano argued
that the Applicants have not shown sufficient interest in the
outcome of this matter. He argued that the 2nd relator is a private
liability company; that both relators have a right to sue and be sued and so it
is strange that Government which
licensed a private investor who has invested so
much in this country is now turning against the same investor in collusion with
a
private company, the 2nd relator. In effect, counsel doubts the
bonafides of the A.G’s involvement in this saga.
It would appear to
me that Mr. Ngabirano did not properly appreciate the fact that the suit is
brought basically under the principles
of common law and the fact that it is
more of public interest litigation than private litigation. S. 14 of the
Judicature Act, supra,
mandates this Court, subject to written law, to apply the
common law and the doctrines of equity.
I have understood Mr.
Ngabirano’s argument to be that for the Applicants to succeed in this
application and consequently in
the main suit, they have to demonstrate a
greater personal interest than that of the general public they are seeking to
protect.
That argument finds no favour in this
Court.
Traditionally, common law confines standing to litigate in
protection of public rights to the Attorney-General. It is immaterial
that such
suits are rare in this country. This was re-affirmed by the House of Lords in
Gouriet –Vs- Union of Post Office Workers [1978] AC 435. In short,
the A.G’s discretion in such cases may be exercised at the instance of an
individual or by himself. I have not
come across any local authority that
contradicts or appears to contradict that legal position. The position was in
my view well
articulated by Lord Diplock in IRC –Vs- National
Federation of Self-Employed and Small Businesses Ltd [1981] 2 All ER 93, 107
when he said:
“It would, in my view, be grave lacuna in our system of public law if a pressure group, like the federation or even a single spirited tax payer, were prevented by out dated technical rules of locus standi from bringing the matter to the attention of the Court to vindicate the rule of law and get the unlawful conduct stopped.”
I agree.
My view on this
point is that the line of argument pursued by the Respondents of personal
interest, personal injury or sufficient
interest over and above the interest of
the general public, has more to do with private law as distinct from public law.
In matters
of public interest litigation, and I don’t hesitate to hold
that the cotton industry in Uganda is a matter of public interest,
this Court
will not deny standing to a genuine and bona fide litigant even where he has no
personal interest in the matter. In coming
to this conclusion, I have taken
into account the fact that public litigation is a sophisticated mechanism which
requires professional
handling which a private company or individual may not
easily achieve. Much as the CDO and UGCEA are legally empowered to espouse
their own claims, Court is of the view that it cannot deny the A.G. the platform
to champion the public interest inherent in the
case against the Respondent as
long as the Respondent is doing so in good faith. No bad faith has been shown
herein to deny him
the platform.
As to whether the Applicants have a
prima facie case with a possibility of success, I’m aware that this is one
of the requirements
in an application of this nature. In my view, however, this
need not be so in all cases. I think that any person dissatisfied with
the
status quo should essentially be presumed to have a genuine grievance which can
be remedied through the Courts.
Any such person hopes to win although he
may in the end turn out to be wrong. In my view, the instant case raises very
serious questions
to be tried in that the Respondents have been alleged to be
involved in breaches of the law. Those breaches, if proved, could have
serious
consequences on the future of the cotton industry in this country.
It has
been argued by Mr. Ngabirano that the Regulations are in conflict with the
parent Act. This in my view, is not a matter that
should be investigated and
remedied herein. It’s a matter that belongs to the main suit. Equally so
is the question of the
Applicants’ alleged lack of a cause of action in
the main suit. Determination thereof must await proper arguments to be advanced
in the main suit.
I have considered counsel’s argument that to
allow this application would be to make the final determination of the main suit
in that the Court will be declaring that the Respondents are in breach.
I
don’t accept that argument. The reasons which would lead the Court to
grant an injunction would not in law be the same as
would activate it when
deciding finally whether or not the Plaintiff in the main suit is entitled to
the reliefs sought therein.
That final determination can only properly be made
when the case for the defence has been heard.
As to whether the
Applicants are likely to suffer irreparable injury, my short answer is that this
being a public interest litigation,
it is enough if the Applicants show that a
person’s right has been, is being or is likely to be contravened. These
are plain
and clear words which should admit no controversy. The A.G need not
first see people suffer irreparable injury before he can complain
on their
behalf. To do so would be to misread the provisions of 0.37 r 2 (1) and to
render the concept of public litigation meaningless.
As to where the
balance of convenience lies, I notice that both the investor and the Government
which the A.G. represents in this
litigation need each other. The investor has
brought in heavy investments and the Government stands to benefit from the
investment
if the two can mutually respect each other. The issue as I see it is
whether an investor can set terms of an investment and execute
them regardless
of any Government policy on the sector. That’s a matter I will seek to be
educated on in the main suit.
A lot of emphasis has been placed on the
fact that the Cotton Development Act has penal provisions for persons acting in
contravention
of it. I appreciate the sentiments expressed by the Respondents
on this point. I however find solace in the words of Eve, J. in
Attorney
– General –Vs- Premier Line Ltd [1932] 1 Ch. 303, 313 where he
said:
“The general rule is that where an Act creates an offence and provides a remedy, the only remedy is that provided by the Statute, and had this action been commenced and prosecuted by the relators it is, I think, pretty clear that the objection of the Defendants to the maintenance of this action would have prevailed. For this conclusion I think the case of Institute of Petent Agents –Vs- Lockwood 1894 AC 347 would have furnished sufficient authority. But that is not the nature of this action. The Attorney General has been involved, and he has intervened in order to assert, not only the rights of the three relators joined with him as Co-Plaintiffs, but of the public at large. The public is concerned in seeing that Acts of Parliament are obeyed, and if those who are acting in breach of them persist in doing so, notwithstanding the infliction of the punishment prescribed by the Act, the public at large is sufficiently interested in the dispute to warrant the A.G. intervening for the purpose of asserting public rights, and if he does so the general rule no longer operates: the dispute is no longer one between individuals, it is one between the public and a small section of the public refusing to abide by the law of the land ................”.
I accept that position without
any reservations.
True CDO and UGCEA can sue the Respondents on their own
or even seek convictions in Courts of law. Even if they did, the results
would
benefit them as individuals, not the poor lot of this country whose livelihood
depends on cotton whether on small or large
scale.
Upon filing of this
suit, the Applicants applied for and obtained an interim order restraining the
Respondents from carrying out any
activities pending determination of this
application. That order appears to have brought relative peace to the parties.
In my view,
the greater interests of justice and of the cotton industry as a
whole warrant that this status quo be preserved until Court decides
otherwise.
Upon carefully listening to the able arguments of counsel;
perusing the affidavits on record; and reviewing of the law on the point,
I have
come to the conclusion that this application should be allowed. The only
appropriate remedy is to restrain the Respondents
by an order of injunction at
the instance of the Attorney – General in the terms of the existing
interim order. I grant it.
In view of the heated nature of this case,
Court is of the view that if the parties made a commitment to have the main suit
disposed
of expeditiously, and in any event within four months, the
hullabaloo about the alleged deliberate attempt by officials in government to
frustrate the investor would cease.
I would therefore direct that
circumstances allowing, the main suit be disposed of within four (4) months from
the date of this order
or else the order be reviewed. For its part, Court
commits itself towards that end.
Finally, each party prayed for costs. I
have not found my way to award any given the public interest involved and the
fact that this
is a fairly balanced case where the decision will not only
benefit the parties but the public as a whole. Accordingly, parties will
bear
their respective costs.
I so order.
Yorokamu
Bamwine
J U D G E
21/04/2006
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