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Last Updated: 19 March 2007
Uganda Cotton Klub Ltd Vs Cotton Development Org. HCT-00-CC-MC-0023-2006 [2007] UGCommC 1 (8th January 2007)
THE REPUBLIC OF UGANDA
IN
THE HIGH COURT OF UGANDA AT KAMPALA
COMMERCIAL COURT
DIVISION
HCT-00-CC-MC-0023-2006
UGANDA COTTON KLUB LTD. ................. ................. APPLICANT
VERSUS
COTTON DEVELOPMENT ORGNISATION ..................
RESPONDENT
8th January 2007
BEFORE: HON MR. JUSTICE LAMECK N. MUKASA
RULING:
This is an exparte
application brought under section 36 of the Judicature Act and Order
46 A Rule 4 of the Civil Procedure Rules as
amended by the Civil
Procedure Rules ( Amendment) (Judicial Review) Rules S.I 75/2003 for
leave to apply for review of the decision
of the Respondent, Cotton
Development Organisation, of 17th November 2006. The
Applicant, M/S Uganda Cotton Klub Ltd, intends to apply for the
following orders:-
|
(a) |
An order of certiorari quashing the decision of the Respondent dated 17th November 2006, canceling the applicant’s Cotton dealing, ginning and lint export certificate. |
|
(b) |
An order of Certiorari quashing the Respondent’s decision of 17th November 2006 on the "wrapping material" for the bales of the duly licensed lint exporter. |
|
(c) |
An order of Prohibition against the Respondent from imposing quotas on the Applicants Cotton purchases in a particular zone. |
|
(d) |
An Order of Prohibition against the Respondent from imposing a maximum Cotton purchase price. |
|
(e) |
An Order of Prohibition against the Respondent from continuing to bar the Applicant from contracting farmers to plant cotton and / or to purchase the same from the entire country. |
|
(f) |
An order of Mandamus against the Respondent to grant/renew the Applicant’s Ginning and Lint Export licenses and quality certificates. |
|
(g) |
An order that the Respondent pays general and aggravated damages for its said actions and the lost earning occasioned by the above actions. |
|
(h) |
A declaration that the Respondent Order/ zonal restrictions imposed on the Applicant Company on purchase of cotton in so far as it not relate to maintaining cotton varieties and quality is a restrain on free trade, ultra vires, unlawful and restrains the growth of the Applicant’s business by/and or unduly subjects crop farmers to whims of monopolitic zonal licences. |
|
(i) |
A declaration that all the decisions complained of were taken and made by and/or with the participation of the Managing Director in the person of Mrs. Jolly K. Sabune whose office tenure in the Respondent is ultravires, hence the decisions are null and void abinitio. |
|
(j) |
An order of costs against the Respondent. |
Section 36 of the Judicature Act empowers the
High Court upon on application for Judicial review to grant any one
or more of the following
reliefs:
(a) An order of mandamus requiring any act to be done;
(b) An order of prohibition, prohibiting any proceedings or matter;
(c) An order of certiorari, removing any proceedings or matter into the High Court;
(d) An injunction to restrain a person from acting in any office in which he or she is not entitled to act;
(e) A declaration or injunction not being an injunction referred to in (d) above.
As a preliminary stage the applicant is
required under Order 46 Rule 4 of the Civil Procedure Rules’ to
obtain leave of Court before
making the application. While
considering the application the High Court’s duty is to investigate
the proceedings of the lower
Court, or tribunal or public authority
on any of the following grounds apparent on the record:-
|
(a) |
Taking into account, matters, which it ought not to have taken into account. |
|
(b) |
Not taking into account matters, which it ought to have taken into account. |
|
(c) |
Lack or excess of jurisdiction, |
|
(d) |
Conclusion arrived at is so unreasonable that no reasonable authority could ever come to it. |
|
(e) |
Rules of natural justice have been violated, or |
|
(f) |
Illegality of procedure or decision. |
See Sam Murumbe & Anor Vs Mukere
Chacha (1990) TLR 54, Kaye Saul V/S UWA H. C. Misc. App No 35 of
2003.
The law is that if any of the above
factors appear on record to be offended court should grant leave for
the full investigation to
be conducted. At this preliminary stage the
courts only duty is to determine whether the applicant has
established a prima facie
case to sustain the grounds upon which he
relies to seek the judicial review. Leave will be granted when the
applicant, has shown
that there is a point which merits an
investigation on a full hearing. See Kikanda Butema Farmers
Ltd Vs I.G.G. C.A C.A. No 35 of 2002
This application
is supported by a Statement setting out the particulars of the
applicant, the relief sought and the grounds upon
which it is sought.
The facts are verified by an affidavit sworn by Edmund Wakida, the
Company Secretary of the Applicant Company.
The brief facts, as I
have gathered from the statement of fact, the affidavits in support
and the annextures thereto are that the
Respondent is a government
corporation responsible or charged with the regulation of Cotton
production, processing, trade, exporting
and all related matters
established by the Cotton Development Act. The respondent is thus a
public authority. The applicant was on
29th March 2005
duly licensed by the Uganda Investment Authority to invest in the
Cotton Ginnery in Pallisa. The license was renewed on
30th
August 2005 for a period not less than five years from the date of
project commissioning. The applicant imported into Uganda a Modern
Cotton Ginnery from USA and set it up at Bulangira in Pallisa at a
cost of US$3,200,000. An agreement dated 19th June 2006
was executed between the Applicant and the Respondent wherein certain
conditions were agreed to be satisfied by each party.
The Applicant
contends that it met the conditions and the Respondent issued to the
Applicant a Ginnery Certification Certificate,
a Cotton Ginning
Registration Certificate and a Lint Cotton Export Certificate all
valid for the 29th August 2006 to 30th November
2006 (2005/2006) season.
The applicant then ginned cotton
totaling over 4000 bales, of approximately 225 kgs each and wrapped
then in polythene. The Respondent
issued quality clearance
certificates and the applicant entered into a contract to supply the
bales to its customer M/s Riftcot Ltd.
By its letter dated 3rd
October 2006 the Respondent prevented the Applicant from exporting
and selling its lint to a willing customer because of the type
of
polythene bale wrapping material chosen by the buyer. By a letter
dated 17th November 2006 the Respondent cancelled the
Applicant’s certificates below:-
|
(i) |
Ginning Certificate S/N 0046 issued on the 29th August 2006 |
|
(ii) |
Ginning Certificate S/N 0035 issued on the 29th August 2006 |
|
(iii) |
Export Certificate S/N 0023 issued on the 29th August 2006 |
|
(iv) |
Quality Certificates for Lot Number E3368-E3398 |
The Applicant contends that it has a large
quantity of cotton in its store ready for export, that when the
export is unreasonably
delayed the quality will deteriorate to the
detriment of the Applicant. That the applicant has invested in this
venture US$5,000,000
and plans to invest up to US$20,000,000 in
Uganda. There was no wrapping condition disclosed in the various
certificates issued by
the Respondent. That the Respondent
unilaterally cancelled the permits and licenses without giving any
hearing to the Applicant thereby
breaching the cardinal rule of
natural justice. The Applicant further contends that Mrs. Jolly K
Sabune’s tenure as Managing Director
had since expired and submits
that the decisions of the Respondent taken and made by and or with
her participation were ultra vires
hence null and void ab
initio.
The Applicant is a foreign investor who was licensed
by the Uganda Investment Authority on 30th August 2005 for
a period not less than 5 years to invest in the Cotton Ginnery in
Palisa. The Applicant set up a Cotton Ginnery at
a cost of
US$3,200,000. The Applicant complied with the conditions agreed upon
in an agreement between the Applicant and the Respondent
dated 19th
June 2006. As a result the Respondents issued the Applicant with a
Ginnery Certification Certificate and Cotton Ginning Registration
Certificate, a Lint Cotton Export Certificate all valid up to 30th
November 2006. Armed with the above certificates the Applicant ginned
cotton totaling over 4,000 bales for which the Respondent issued
the
applicant with the Quality Clearance Certificates E3368 – E3398.
The applicant got an order from a willing foreign buyer but
the
Respondent stopped the export due to the type of wrapping material.
It is the Applicant’s contention that no wrapping conditions
were
disclosed in the certificates issued by the Respondent. Before the
expiry of the certificates the Respondent cancelled all the
certificates on 17th November 2006 thereby making it
totally impossible for the Applicant to export the cotton it had
ginned. The above facts raise an
issue whether the Respondent’s
decision to cancel the Certificates was reasonable in the
circumstances of this case. The applicant
further contends that the
decision was reached without giving it any hearing thereby violating
the well known rule of nature justice
known as Audi Alteram Partem.
It is further contended that the decisions were reached with the
participation of Mrs. Jolly Sabune
whose tenure as Managing Director
of the Respondent had expired. The Applicant contends that such
decisions were null and void ab
nitio, thus illegal.
Considering
all the above I find that the Applicant’s complaint is serious and
needs to be investigated inter parties for a remedy.
This is a proper
case which warrants the leave sought to be granted and it is
accordingly granted.
The order as to costs in the main
application shall bind the costs in this application. I so order.
Hon
Mr. Lameck N. Mukasa
Judge
8/01/2007
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