Court name
Commercial Court of Uganda
Case number
Miscellaneous Application 819 of 2019
Judgment date
24 January 2020
Title

GUANGZHOU DONGSONG ENERGY GROUP (U) LTD v MS FANG MIN (Miscellaneous Application 819 of 2019) [2020] UGCommC 4 (24 January 2020);

Cite this case
[2020] UGCommC 4

  THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION

                           MISC.  APPLICATION   NO. 819 OF 2019

(ARISING FROM   HCT-00-CC-CS-318-2016)

GUANGZHOU DONGSONG ENERGY GROUP (U) CO. LTD::::APPLICANT

VERSUS 

MS FANG MIN ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::RESPONDENT

 

BEFORE:  THE HON. JUSTICE DAVID WANGUTUSI

R U L I N G:

This Application filed by Guangzhou Dongsong Energy Group (U) Co. Ltd called the Applicant against Fang Min herein after referred to as the Respondent seeks;

 

  1. A review of the Judgment in HCCS No. 318 of 2016 to the extent that it cancels the transfer of Exploration License No. 1178 and Mining Lease No. 1393 from Uganda Hui Neng Mining Ltd to the 2nd Defendant and subsequently to the Applicant.

 

The Application is grounded on the following;

  1. That the judgment ordering cancellation of transfer of Exploration License No. 1178 to the 2nd Defendant and its subsequent transfer together with the mining lease No. 1393 to the 6th Defendant was null and void;

 

  1. That the cancellation of transfer of license and stay of activities under the afore mentioned license were matters already dealt with in Miscellaneous Application No. 500 of 2016 arising out of HCCS No. 318 of 2016.

 

  1. That the order of cancellation of transfer of the Exploration License and subsequently to the 6th Defendant was a mistake or error of law apparent on the face of the record.

 

The background to this Application is discerned from the pleadings of HCCS No. 318 of 2016 in which Fang Min the Respondent herein sued Uganda Hui Neng Mining Limited (Nominal Defendant) Guangzhou Dongsong Energy Group Co. Ltd, L.V Weidong, Mao Jie and Yang Junjia. On these five the Respondent through an amendment added the 6th Defendant who is the present Applicant.

 

In the suit the Respondent contended that the 2nd, 3rd  , 4th , 5th and 6th Defendants had fraudulently expropriated the 1st Defendant’s property and committed fraud on the minority shareholder, the Respondent in this case, for which she sought amongst other orders, the cancellation of the mining lease transferred  to the 2nd Defendant on the basis that it was procured through fraud.

 

She also sought an order cancelling the transfer of the exploration license from the 1st Defendant to the 2nd Defendant and that it be reinstated to the 1st Defendant.

 

The Applicant raised an objection against the prayers for cancellation of the transfer of the exploration license in Misc. Application No. 500 of 216. The gist of the Application was that the Court did not have jurisdiction to hear the suit because of the prayers the Respondent sought.

 

The Applicant successfully argued that jurisdiction to hear complaints against decisions of the Commissioner were vested in the Minister under section 118 (2) and (3) of the Mining Act No. 9 of 2003 and not the High Court.

 

For clarity I reproduce section 118;

“(1) Any person aggrieved by any decision of the Commissioner may within thirty days after being notified of the decision, request in writing, an administrative review of the decision by the Minister.

(2) The Minister may, within sixty days after receipt of a request for administrative review under this section confirm, set aside or vary the decision complained of

(3) The Minister shall give reasons in writing for his or her decision on a review   under this section.”

 

Based on those provisions the Court found that a suit  challenging issuance  or transfer of a license could not be brought directly to Court.  It was also Court’s finding that the complaint to the Minister was supposed to be filed within thirty days and that if the complainant was not satisfied with the decision of the Minister to proceed to Court within forty five days.

 

Having found that those procedures had not been followed, the Court upheld the Applicant’s objections and the prayers seeking cancellation of the transfers were struck off.

The suit then proceeded   for hearing without the prayers for transfer.

 

The suit was heard but the issue of illegality of transfers took center stage because the parties brought it into issue throughout the hearing. Court found that all the resolutions used to effect the transfers were unlawfully obtained.

 

Having so found, it gave recognition to the common legal position that an illegality cannot be left to stand  and made several orders the first being;

  •  

 

Before the hearing of the Application the Respondent raised a preliminary objection. The substance of the preliminary objection was that the Application for review was misplaced because the Applicant had filed an Appeal as well. That in such a situation there could be no review.

 

The Respondent’s Counsel relied on Steven Nyasani Menge vs Rispah Onsase Misc Application No. 4/2018( Environment and Land Court at Kisii). He quoted;

In my view a proper reading of Section 80 of the Act and Order 45 rule 1 and 2 makes it abundantly clear that a party cannot apply for review and appeal from the same Decree and order.”

According to Counsel for the Respondent, the Applicant had to opt for only one of the procedures either to file for review or appeal. He submitted that filing an Appeal rendered the Application for review incompetent.

 

In reply Mr. Kusasira for the Applicant submitted that the position given by the Respondent only applied in situations where the Appeal was filed before the Application for review. He submitted that where an Application for review was filed before the Appeal, such Application was competent. He relied on Hoima District NGO Forum & Others vs Murungi Catherine & Others HCMA 12/13 wherein the Judge relying on Sarka’s Law of Civil procedure held that if the Application for review is presented before the Appeal is preferred Court has jurisdiction to hear it although the appeal is pending.

 

I am convinced by Counsel for the Applicant and in full agreement with my Learned brother in the Hoima case that merely preferring an Appeal does not render an Application for review filed prior to it incompetent.

 

This position was exhaustively dealt with in Kisya Investment Ltd vs Attorney General CA 31 of 1995   wherein their Lordships held;

“A party who has filed a notice of appeal cannot apply for review but if application for review is filed first, the party is not prevented from filing an appeal subsequently even if the review is pending.”

 

I am also in complete agreement with that holding because in many cases the reasons for appeal are not necessarily the same reasons for review. So even if one has filed an Application for review, there might be other reasons that can only be sorted out in an Appeal. It would be unjust to prevent an intending Appellant from pursuing their resolutions.

 

Record shows that this Application was filed on the 23rd of September 2019 while the Notice of Appeal was filed on the 2nd of October 2019. The Notice of Appeal was subsequent to the Application for review. The Application for review could therefore be heard pending the Appeal. The subsequent filing of the Appeal did not affect the legality of the Application for review.

It is therefore competent.

 

It is the Applicant’s contention that once the prayers in respect of cancellation of license were struck off the pleadings, the Court could not make a finding in that regard because she could not resolve what had not been pleaded.

 

Counsel   submitted that such an order amounted to a mistake or an error of law apparent on the face of the record since it reversed the earlier decision of this Court. He relied on Ms Fang Min & Another vs Crane Bank Ltd CA 06 of 2013 which dealt with a similar situation in these words;

“It is clear that the Court of Appeal erred in basing its judgment on a cause of action which was neither pleaded nor argued before court or the High Court. The Court of Appeal also granted reliefs which were not prayed for in the plaint without any amendment of the plaint.”

Counsel for the Respondent contending that the order of cancellation of License was in order relied on  Makula International Ltd vs His Eminence Cardinal Nsubuga & Anor [1982] HCB 11 whose decision frowned at illegalities. The decision is to the effect that no Court will brook an illegality or let an illegality go unpunished.

 

That since Court had found an illegality in the transfers, it could proceed to issue the orders of cancellation.

 

Further relying on section 33 of the Judicature Act Counsel for the Respondent submitted that Court had the duty to come up with remedies that would curtail multiplicity of legal proceedings. That the extra mile the Court took to order cancellation was proper in the circumstances. The provision reads;

 

“The High Court  shall, the exercise in the exercise of the jurisdiction vested in it by the Constitution,  this Act or any written law, grant absolutely or on such terms and conditions as it thinks just, all such  remedies as any of the parties to a cause or matter is entitled to in respect of any legal or equitable claim properly brought before it, so that as far as possible all matters in controversy between the parties may be completely and finally determined and all multiplicities of legal proceedings concerning any of those matters avoided.”

 

While I agree with this submission   I am however of the view that it was applicable where there was no contrary judicial finding. In this case Court had already made a finding that the procedure adopted by the Respondent was illegal. That the route she should have taken was first to raise a complaint to the Minister before proceeding to Court which she had not done.

 

The Court having reached a decision that a wrong procedure had been adopted by the Respondent challenging the issue of the license by the Commissioner, section 33 of the Judicature Act could not be a fall back relief.

 

In my view the error arose because although the pleading on cancellation had been struck out, the parties proceeded throughout the proceedings to contest the illegality of the resolutions and thus the transfers. In that way the Court came up with a finding of illegality which it felt could not stand.

 

The order of cancellation ought to be reviewed if it is an error on the face of the record.

An error on the face of the record calling for review is defined in AIR Commentaries : The Code of Civil Procedure by Manohal and Chitaley Volume 5, 1908, It reads;

 

“That in order that an error may be a ground for review, it must be one apparent on the face of the record, ie an evident error which does not require any extraneous matter to show its incorrectness. It must be an error so manifest and clear that no Court would permit such an error to remain on the record.”

In Batuka K. Vyes vs Surait Borough Municipality & Others (1953) Bom 133 discussing the scope of review the Court had this to say;

No error can be said to be apparent on the face of the record if it is not manifest or self evident and requires an examination or argument to establish it.”

 

In the instant case the Court had earlier in HCMA 500 of 2016 ruled that the jurisdiction to annul transfers lay with the Minister in the first instance and yet later on  after hearing the case and finding illegalities it annulled the transfers.

 

The latter order was in conflict with the first order. It is clear that when two court orders conflict, it creates an error apparent on the record. This position is well established in Said Hemed Said vs Emmanuel Karisa Mailta & Another CA [2000] 2 EA 505 held;

 

Where the Court delivers two conflicting rulings that amounts to an error on the face of the record.”

 

Such an error is too manifest to be left to stand. The Respondent may have to follow the provided procedure if she is to annul the transactions which were done by the Commissioner.

 

Having found an error apparent on the record, I find this a fit and proper case wherein the Judgment should be reviewed.

 

For those reasons the findings and orders for cancellation of the transfer of the Exploration License No. 1178 and the Mining Lease No. 1393 are expunged and set aside.

 

Having found that the Respondent was entitled to compensation as a result of her shares and participation in the setting up of the Nominal Defendant it is ordered;

  1. That the Nominal Defendant is entitled to the benefits derived from the Exploration License
  2. The Plaintiff is entitled to the US $ 8,000,000 frozen conceded to by the 3rd Defendant.
  3. The alleged rectification of shareholding which was done in China was illegally conducted and cannot stand.
  4. That while the Plaintiff could bring a derivative action the fruits of such action would be towards the benefit of the Nominal Defendant through which it would trickle down to the Shareholder.
  5. That the corporate veil of the 2nd and 6th Defendants be lifted to allow for remedies against the Shareholders and Directors.
  6. That the books of accounts of the Nominal Defendant be subjected to an audit so as to arrive at the financial status of the company.
  7. That the sum in (2) above shall attract interest of 8% per annum from date of filing till payment in full
  8. That the counterclaim by the Defendant is hereby dismissed.
  9. That costs are to be borne by the Defendants.

10.Each party to bear own costs of this Application.

 

Dated at Kampala this 24th day of January  2020

 

 

 

HON. JUSTICE DAVID WANGUTUSI

JUDGE