Court name
Commercial Court of Uganda
Judgment date
31 May 2013

Parombo Cotton Farmers Ltd v Uganda Ginners & Cotton Exporters Association Ltd (Miscellaneous Application-2013/340) [2013] UGCommC 106 (31 May 2013);

Cite this case
[2013] UGCommC 106

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

 AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 340 OF 2013

(ARISING FROM HIGH COURT CIVIL SUIT NO 217 OF 2013)

PAROMBO COTTON FARMERS LIMITED}.......................................... APPLICANT

VERSUS

UGANDA GINNERS AND COTTON

 EXPORTERS ASSOCIATION LTD} ......................................................RESPONDENT

 

BEFORE HON MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING ON PRELIMINARY OBJECTION TO THE APPLICATION

The Applicant's application was commenced by Chamber Summons under the provisions of section 33 of the Judicature Act, section 98 of the Civil Procedure Act and order 41 rules 1 (a) and (b), 7 (1) (a), order 50 rules (1) (3) and (6) of the Civil Procedure Rules. It is entitled chamber summons for a temporary injunction and seeks an order to issue against the respondent, its officials, of whatever description, agents, assigns and the respondents bankers, restraining them from operating the respondents bank accounts held with such bankers or dealing with them in any manner that permits, allows or authorises debits, withdrawals or transfers of any nature from such accounts; till final disposal of the substantive application and for costs of the application.

When the application was called for hearing, G.S Lule SC appeared for the applicant's while Nestor Byamugisha appeared for the Respondent.

Counsel Nestor Byamugisha objected to the applicant's application whether it is for an interim or temporary injunction. The gist of his objection is that High Court civil suit number 217 of 2013 from which the application arises was filed under order 36 of the Civil Procedure Rules by way of special procedure. It's a special procedure because judgement in default of application for leave to file a defence and defend the action is made within 10 days from the date of service of the specially endorsed plaint on the defendant. Injunctions can be granted under order 36 upon the grant of conditional leave. Thirdly the court can grant the remedy of a summary hearing by consent under rule 9 of order 36 of the Civil Procedure Rules. His submission is that an injunction can only be applied for and granted when there is a pending suit. It is granted pending the hearing of the main suit. He submitted that under order 36 of the civil procedure rules, one can only talk about final determination of the main suit after leave to defend has been granted. The defendant can only be heard after leave. Consequently the applicant's application is premature. The court can grant the necessary orders after granting leave and the application is an abuse of the process of court.

In reply Counsel Godfrey Lule SC was unable to agree with the submissions of the respondents counsel. He contended that an injunction is resorted to where the subject matter of the suit is in danger of being alienated and the applicant believes it to be so. Senior Counsel submitted that there is nowhere under order 36 that an application for an injunction cannot be taken. Moreover the respondents counsel has not provided any authority is for his submission. When cases filed in court, it remains pending until determined. This is also the case with a summary suit.

If this were not so, there would be no provision for the defendant to apply for leave to appear and defend the suit. The case may be adjourned from time to time and indeed may take a while to be heard. For instance an application to preserve the subject matter of the suit can be made. Where the defendant decided to make an application, he cannot be heard to say that his case is not pending. It was prudent to apply for an interim order to preserve the subject matter of the suit.

On a question put by court as to whether the applicant in this application intends to oppose the respondent's application for leave to appear and defend the summary suit, counsel informed court that the applicant will oppose the respondent's application for leave to appear and defend the suit on the merits. Finally counsel submitted that the applicant’s application is maintainable and not defeated.

In rejoinder counsel Nestor Byamugisha submitted that miscellaneous application number 340 of 2013 is for a temporary injunction. A close scrutiny however shows that it is not for a temporary injunction. It seeks an interim order pending determination of itself. An injunction should be pending application for leave to hear the defendant. It does not seek a restraint order pending application for leave to appear and defend and should be dismissed.

I have carefully considered the preliminary objection of the respondents counsel as set out above. Temporary injunctions are governed by order 41 of the Civil Procedure Rules. The applicant's application is made under order 41 rules 1 (a) and (b), 7 (1) (a). As far as the first part of the rule is concerned, it envisages that there is a suit where it is proved by affidavit or otherwise that any property in dispute in the suit is in danger of been wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or that the defendant threatens or intends to remove or dispose of his or her property with a view to defraud his or her creditors. In such cases the court may make an order for purposes of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the court thinks fit until the disposal of the suit or until further orders. It is trite law that an application for a temporary injunction has the main purpose of preserving the status quo.

Secondly order 41 rules 7 of the Civil Procedure Rules permits the court in an application by any party to a suit on such terms as it thinks fit to make orders for the detention, preservation or inspection of any property which is the subject matter of the suit or as to which any question may arise in the suit.

The contention of the respondents counsel is that order 36 is a self executing order and any remedies including interim remedies may be sought under that order. Order 36 deals with summary procedure on especially endorsed plaint. Rule 4 thereof provides that an application by a defendant served with summons for leave to appear and defend the suit shall be supported by affidavit. It is an agreed fact or at least it is not in dispute that the defendant to the main suit has filed an application for leave to appear and defend the action. The respondent's counsel contended that leave to appear and defend the suit may be given unconditionally or conditionally subject to such terms as the payment of monies into court, giving security, or time or mode of trial or otherwise as the court may think fit. Secondly by consent of the parties the suit may be finally disposed of in a summary manner. The most crucial rule in support of the respondent’s objection is order 36 rule 10 of the Civil Procedure Rules which provides as follows:

"Where leave, whether conditional or unconditional, is given to appear and defend, the court shall have power to give all directions and make all orders as to pleadings, issues, and any further steps in the suit as may appear reasonable or necessary, or may order the suit to be immediately set down for hearing."

If the respondents counsel’s submission is accepted, it would imply that a plaintiff who applies for summary suit cannot file an application for the preservation, or maintenance of the status quo pending the hearing of the suit. The contention is that there would be no hearing unless and until leave to appear and defend the suit has been granted.

I have carefully considered the submissions. Upon the application of the respondent for leave to appear and defend the suit, there is technically a suit pending between the parties. I must emphasise that a suit is defined under section 2 of the Civil Procedure Act to mean all civil proceedings commenced in any manner prescribed. The word "prescribed" means prescribed by the rules. An application for leave to appear and defend the suit is indeed a suit within the meaning of a suit under the Civil Procedure Act. The respondent's counsel further submitted that it would be regular if the applicant was seeking an injunction pending the hearing of the application for leave to appear and defend the suit. In that respect he complains about the manner the order which is sought is phrased. The orders sought are pending disposal of the substantive application.

It is my humble ruling that the submissions of the respondents counsel is on the merits of the applicant’s application. So long as a suit has been filed in does not matter whether it is a summary suit or an ordinary suit. In case a summary suit has been filed, a default judgement cannot be entered where there is an application for leave to appear and defend the suit. In a perfect situation, the application should be heard expeditiously. However with the court saddled with the so many applications and civil suits to determine, it may not be possible to hear an application for leave to appear and defend the suit expeditiously or as fast as may be desired by the applicant. In such cases the court still retains its inherent jurisdiction to hear parties in an application for any interim remedies which are available to parties in an ordinary suit. This includes applications for preservation of property, temporary injunctions etc as the needs of the case and the circumstances of the case may dictate. The orders which are made or the powers prescribed in the rules under order 36 after leave whether conditional or unconditional is granted under rule 10 of order 36 only come into operation after hearing the main application for leave. Specifically order 36 rules 10 of the civil procedure rules makes it possible for the court to invoke the jurisdiction under that rule after granting either conditional or unconditional leave. Supposing that the applicant in the application for leave to appear and defend the suit has not fixed it for hearing, should the plaintiff who is seeking a summary relief be barred from filing an application for preservation orders? I do not think so. Whenever there are proceedings between the parties in the nature of a suit, any of the parties can seek interim relief under order 41 of the Civil Procedure Rules.

In those circumstances, the objections of the respondent in miscellaneous application number 340 of 2013 are misconceived and overruled. Costs shall be in the cause.

Ruling delivered on the 31st of May 2013 in open court

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

G.S Lule appearing with Peter Alan Musoke for the Applicant

Godfrey Sentongo MD represents the applicant in court

Nestor Byamugisha appears for the respondent.

Ginners present in court are:

  1. Richard Barwot ginner of Rhino Camp
  2. Philip Upakawoth from Rhino Camp
  3. Bwambale Adam from Nyakatonzi
  4. Amdan Khan from Rwenzori
  5. Rwatlal Jain from Olan Ginnery
  6. Ogen Bob Alberto from East Acholi Coop Ltd
  7. Narendra Patel from CN Cotton Ltd
  8. Hitesh Panchmatia from Bon holdings Ltd
  9. Wehoganzi Barnard from Bonhold ltd
  10. Mrs Jolly Sabuni MD of cotton development organisation which regulates the cotton subsector.

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

31st May 2013