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Last Updated: 12 July 2007
Eastern and Southern African Trade & Anor V
Hassan Basajjabalaba & Anor- HCT-00-CC-CS-0512-2006 [2007]
UGCommC 30 (13 April
2007)
THE REPUBLIC OF UGANDA
IN
THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-CS-0512-2006
|
1. |
Eastern and Southern African |
|
2. |
Trade and Development Bank Plaintiff |
Versus
1. Hassan Basajjabalaba (Aka Hassan
Basajja)
2. Aisha Basajja Defendants
13 April
2007
BEFORE: THE HONOURABLE MR. JUSTICE
YOROKAMU BAMWINE
R U L I N G
The
plaintiff’s claim against the defendants jointly and severally is
for specific performance of the terms of the Deed Guarantee
dated
10/7/2002 entered into between the plaintiff and the defendants;
general damages for fraud and misrepresentation; costs and
interest.
When the case came up for a scheduling conference on
2/4/2007, Mr. Kavuma – Kabenge for the defendants raised an
objection regarding
jurisdiction. He contended that the parties in
their dealings agreed that the Guarantee would be governed and
construed in accordance
with the laws of England and that any dispute
would be resolved through arbitration.
He also contended that
the amended plaint is not accompanied by a list of documents, list of
witnesses and the summary of the case
as the law under 0.6 r. 1 (2)
of the Civil Procedure Rules requires. He therefore invited me to
find that this Court has no jurisdiction
over the matter and that the
suit is in any case incompetent. In support of his argument on
jurisdiction, Mr. Kabenge cited to me
two cases:
Fonville
V Kelly 111 and Others [2002] 1 EA 71 and Tononoka Steels Ltd V East
& Southern African Trade & Development Bank
[2002] 2 EA
536.
Mr. Sogi Katende and Mr. Arthur Sempebwa,
learned counsel for the plaintiff, have invited me to over-rule the
three objections and
set down the suit for a scheduling conference.
They filed written submissions on the matter. It is, therefore, not
necessary to repeat
their arguments verbatim.
I have addressed
my mind to the arguments of all counsel on the matter. The Deed of
Guarantee which the plaintiff is suing on is on
record as annexture
‘B’ to the plaint. Clause 12 thereof provides as follows:
"12. Governing Law: This Guarantee shall be governed by and construed in accordance with the laws of England."
From the pleadings, therefore, the law of
England is the applicable law to the transaction. The issue is
whether the Ugandan Courts
have jurisdiction to hear and determine
the dispute between the parties.
The Constitution of Uganda
(Article 132) read together with the Judicature Act (S. 14 (2)) grant
the High Court original jurisdiction
in all matters. The contract Act
(cap. 73, S. 2 (1) thereof) allows for the application of the common
law of England that relates
to contracts as modified by the doctrines
of equity; public general statutes in force in England on the 11th
August, 1902; and the Acts of Parliament of the United Kingdom
mentioned in the Act.
Under the principles of Common Law of
England that relate to contracts, which principles do apply to our
very own situation, I reckon,
English Courts are mandated to
determine disputes as long as the person served with summons to file
a defence is within England.
I cannot see why, as a general
principle, the same would not apply to our Courts.
I have looked
at the two authorities cited to me by Mr. Kabenge in support of his
argument.
The first one, Fonville V Kelly,
supra, is a case that started in the High Court of Kenya. Kenya has
comparable jurisprudence in matters of contract. The Court in
that
case held that where the parties to a contract expressly agreed that
the contract was to be governed by a particular law, that
law was the
proper one to be applied. I agree. In that case, the subject matter
of the suit was a breach of the Stock Purchase Agreement.
Clause 12
of the agreement provided that the contract would be construed in
accordance with the law of the State of Florida, USA
and that the
venue of the proceedings would be Orange County, Florida. The
jurisdiction of the Kenyan Courts was therefore ousted
with regard to
any dispute arising from the agreement. In the instant case, the Loan
Facility Agreement and the Guarantee agreement
do not provide that
the venue of the proceedings would be in England. The mere fact that
the law applicable to the transaction was
the law of England would
not in itself be ground to shift the venue of the trial to England
unless the parties so wish. If the parties
felt that Ugandan lawyers
would not serve them to their satisfaction, as would their English
counterparts, they (the parties) would
be at liberty to fly in
lawyers of their choice. I do not think that it would be necessary to
fly in English Judges as well. In my
view, the case cited to me is
distinguishable on facts and inapplicable to the instant case.
The
second case, Tononoka Steels Ltd, supra, is
relevant to the facts herein. The appellant borrowed money from the
respondent. Thereafter, a dispute arose and the appellant
sued the
respondent. The respondent argued that the law applicable was English
law by virtue of a clause to that effect in the contract,
and the
trial Court (in Kenya) agreed with that argument. The Court decided
that it had no jurisdiction in the matter. On appeal,
the appellate
Court reversed the lower Court decision. Lakha JA’s observation is
instructive herein. He stated:
"Whatever else may or may not be the effect of this clause, in my judgment, it does not oust the jurisdiction of this Court. The learned Judge, in holding as he did, that the jurisdiction of the Court was ousted, was, with respect, clearly in error."
The case, though cited to me by the defendants’
counsel, clearly favours the plaintiff herein. It is a case from a
Sister Republic,
with comparable jurisprudence. The decision, though
not binding upon the High Court of Uganda, is pleasantly persuasive.
The Kenyan
Courts applied English law in Kenya. I do not see why we
would not do the same in a situation where, as we are told, the
guarantee
agreement was entered into in Uganda; the defendants are
Ugandans; and the money was used (or misused) by a Ugandan Company.
The
convenience of the case would dictate that the case be heard and
determined here, in the absence of any prior agreement, between
the
parties, to the contrary. I would therefore find no merit in the
objection and over rule it.
Mr. Kavuma-Kabenge’s other
argument relates to arbitration. Counsel is of the opinion, that in
accordance with the Arbitration and
Conciliation Act of this country,
the Court should be compelled to refer the matter to arbitration,
presumably in England. It would
appear that counsel is basing his
argument on Annexture ‘A’ to the plaint, Article 24, which states
that any dispute between
the parties to that agreement should be
settled by an Arbitration Tribunal. In my view, this argument should
also fail. Annexture
‘A’ is a loan facility agreement between the
plaintiff and a company, Basajjabalaba Hides and Skins Ltd, a limited
liability
company. The same has nothing to do with the defendants
herein, who are being sued on another agreement, a Guarantee Deed,
they signed
with the plaintiff, Annexture ‘B’ to the plaint. My
careful perusal of the annextures to the pleadings shows that
annexture ‘B’,
unlike annexture ‘A’, does not have any clause
in it to do with arbitration. Any arbitration conducted in the matter
would, in
my view, be procedural rather than contractual. I would
also over-rule this objection.
The final objection relates to
the alleged unsustainability of the plaint. It is alleged that the
plaintiff did not attach a summary
of facts and evidence, and the
necessary lists of documents and witnesses. The plaintiff’s counsel
deny it. There are two aspects
to this matter. The first one is that
both parties agree that the law applicable to the dispute is the law
of England. 0.6 r. 1 (2)
is a local law, not the law of England. Be
that as it may, it would appear to me that the law envisioned by the
parties in the Guarantee
Deed is the substantive law of contract, not
the procedural law relating to filing of pleadings. Since this point
was not argued
before me, I beg to offer no further comment on
it.
The other aspect relates to the point raised by Mr. Kavuma-
Kabenge about alleged non-filing of some documents.
I have looked
at the very first plaint filed herein on 21/8/2006. It had the
impugned attachments. The defendants do not seem to dispute
that. The
problem appears to be with the subsequent amendment. The Court record
shows that even the amended plaint has all the required
lists. It is
not clear to me whether or not the same were smuggled on to the
record after the point had been raised by Mr. Kavuma-Kabenge.
If this
is so, God should forgive litigants and/or their lawyers with such
dishonest inclinations. There is of course the possibility
that the
copy supplied to the defendants, unlike the Court copy, did not,
deliberately or otherwise, have the impugned attachments.
It is a
matter of great regret that at the time of hearing, Court did not
make any verification as to whether or not the Court record,
like Mr.
Kabenge’s, lacked the impugned attachments. In view of this doubt,
Court is unable to make a definite finding of fact
on the matter. Be
that as it may, the plaintiff filed the first plaint with all the
requisite lists. They were served on the defendants.
Within the time
allowed by law, the plaintiff amended its plaint, making a very minor
alteration to the original plaint. The rest
remained the same. In my
view, mindful as I’m, that one of the intentions of amending 0.6 of
the Civil Procedure Rules was to avoid
surprises or ambushes in
matters of this nature, the defendants cannot plead surprise in this
case. The case cited to me, Sule Pharmacy Ltd V The
Registered Trustees of the Khoja Shia Itana Shari Jamat (Misc.
Application No. 147/1999 arising out of HCCS No.
30/99 – unreported) covered this kind of situation.
Applying the ratio decidendi in that case to the facts herein,
and given that the Constitution of Uganda mandates Courts to
administer justice without un due
regard to technicalities, I’m
inclined to over-look the omission, if any, in the greater interests
of justice and in accordance
with Article 126 (2) (e) of the
Constitution.
In the result, the objections are overruled.
The case shall be set down for a scheduling conference where the
possibility of Alternative
Dispute Resolution (ADR), particularly
mediation, and the possibility of staying proceedings pending
exploration of ADR, shall be
explored.
Costs herein shall
abide the outcome of the main suit. It is so ordered.
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.RTF of original document