THE REPUBLIC OF UGANDA
IN THE CONSTITUTIONAL COURT OF UGANDA AT KAMPALA
CONSTITUTIONAL PETITION NO. 22 OF 2009
1) UGANDA FREIGHT FORWARDERS ASSOCIATION
2) UGANDA CLEARING INDUSTRY AND PETITIONERS
2) GREAT LAKES PORTS LTD
CORAM: HON. JUSTICE C.K.BYAMUGISHA, JA/CC
HON. JUSTICE A.S.NSHIMYE, JA/CC
JUDGMENT OF THE COURT
This Constitutional petition was filed jointly by two petitioners, namely, the Uganda Freight Forwarders Association and the Uganda Clearing Industry and Forwarding Association (hereinafter referred to as the “petitioners”), on behalf of their members. They brought the petition under the Constitutional Court (Petitions and References) Rules, 2005. The object of the petition is to challenge the constitutionality of a contract dated 4th March, 2009, which the Government of the Republic of Uganda entered into with the 2nd respondent for the establishment and management of an Inland Dry Port at Tororo.
In the petition, it is alleged that: -
2. The act of the respondents in entering into the said monopoly contract is inconsistent with and in contravention of article 40 (2) of the Constitution of Uganda, which protects the fundamental right of all persons in Uganda to carry on any lawful occupation, trade or business. The petitioners shall seek interpretation of the said article and contend that the meaning, purpose and effect of the said article are to prohibit the creation of a government- imposed monopoly over any lawful business or trade in Uganda.
3. The actions of the 1st respondent, by effectively granting monopoly rights to the 2nd respondent in respect of substantially all the clearing, forwarding and handling business available in Uganda, contravene article 43 (1) of the Constitution which stipulates that human rights must not be enjoyed to the prejudice of the rights of other persons. The 2nd respondent is effectively being granted an exclusive right to carry on the business of clearing, forwarding and handling in Uganda at the expense and to the prejudice of the petitioners, all of whom are currently lawfully and competitively engaged in various aspects of the same business.
4. The impugned actions of the respondents, in entering into the said contract, are inconsistent with and in contravention of articles 21 (1) which stipulates that all persons are equal under the law in all spheres of life, including economic life. Your petitioners allege that by granting the said monopoly rights to the 2nd respondent, the 1st respondent is effectively forcing all the petitioners to compete to obtain sub contracts or business opportunities from the privileged 2nd respondent, all in a position of artificial and enforced inequality.
5. Uganda has only two routes to the sea, through the ports of Dar es Salaam and Mombasa with the latter is a much shorter and more cost effective route. The petitioners shall contend that the action of granting monopoly rights over the Mombasa route to the 2nd respondent and condemning all other industry players to the longer and more expensive Dar es salaam route is in contravention of articles 21 (1) of the Constitution which stipulates that all persons are equal under the law in all spheres of life, including economic life.
6. The actions of the 1st respondent in granting the said monopoly rights to the 2nd respondent constitute a threat to the jobs and livelihood of thousands of persons who are currently collectively employed by the membership of the petitioners. This is inconsistent with and contravenes the right to life as protected by article 22 (1) of the Constitution, which includes the right to earn a livelihood.
7. The petitioners have individually and collectively invested millions of dollars in establishing their respective businesses in Uganda including investments in land, buildings, equipment and vehicles. The monopoly rights granted to the 2nd respondent threaten to wipe out the cumulative investments of the petitioners and/or render them valueless. This amounts to a violation of the constitutional protection against deprivation of property as provided by article 26 (2) of the Constitution.
8. The action of the government in granting the said monopoly rights to the 2nd respondent is arbitrary since it is not done under any law providing for the grant of monopoly rights in the clearing, handling and forwarding industry. The petitioners contend, consequently, that it is not demonstrably justifiable in a free and democratic society.
9. The actions of the Permanent Secretary in granting the license to create an inland port in Uganda is illegal because the power to designate customs areas is exclusively vested by the East African Community Customs Management Act in the Commissioner General of the Uganda Revenue Authority. The petitioners will contend that an illegal action by a government officer which violates constitutional rights is not demonstrably justifiable in a free and democratic society.
10. The contract signed between the Government and the 2nd respondent is in contravention of Uganda’s obligations under the Protocol on the Establishment of The East African Community Customs Union Act which prohibits, inter alia, any agreement with the intent or effect of preventing, restricting or distorting competition within the community. The petitioners will contend that entry into such an illegal agreement is not demonstrably justifiable in a free and democratic society.
11. The individual and collective meaning and effect of all the above cited constitutional provisions and legal provisions are that Uganda is a free market economy where all persons are entitled to enjoy full economic freedom to enter into and engage in any lawful trade or business. The Government has no right or power to grant monopoly right to any single individual or entity in respect of any lawful business or trade, or render nugatory and valueless the investments of persons already engaged in such business or trade, by restricting the right to participate in that trade or business to a single individual or entity.”
The petitioners prayed for the following declarations and orders:-
(ii) This Honourable Court be pleased to grant an order of redress canceling the contract between the 1st and 2nd respondent or such other order as it deems appropriate to secure protection of the petitioners’ rights.
(iii) This Court is pleased to grant costs of this petition to the petitioners.”
The respondents filed answers to the petition in which they denied that the said contract was a monopoly and was inconsistent with Articles 40(2), 43(1), 21(1), 22(1) and 26(2) of the Constitution as alleged by the petitioners. Consequently, they prayed for its dismissal with costs. The detailed reasons are set out in a number of affidavits filed in support of their respective responses including the ones sworn by Mr. James Byenjeru Tukahirwa, Secretary to the Contracts Committee in the Ministry of Tourism, Trade and Industry; Mr. Bafirawala Elisha, a State Attorney in the Attorney General’s Chambers; Mr. Tabuley Jad Johnson, a director of Freight Cargo Ltd, a member of the 1st petitioner; Ms Prossy Musoke, a director of Kampala Maritime Freight Services Ltd and Captain Patrick Nelson Wamala Musoke, the Managing Director of the 2nd respondent.
The petitioners were represented by M/S Byenkya, Kihika & Company Advocates while M/S Muwema, Mugerwa & Company advocates represented the respondents. They filed written submissions.
The issues agreed upon for determination by this Court were:-
1. Whether the petition is properly before Court.
2. Whether the contract of 4th March 2009 between the Government of the Republic of Uganda and the 2nd respondent created a monopoly in favour of the 2nd respondent.
3. Whether the act of entering into the said contract is inconsistent with and contravenes either all or any of articles 42, 43(1), 21(2), 22(1) and 26 (2) of the Constitution.
4. Remedies if any.
Whether the petition is properly before the Court
This issue was raised by learned counsel for the 2nd respondent as a preliminary objection to the petition. It is the contention of the 2nd respondent’s counsel that the petition is not properly before this Court and ought to be dismissed with costs. Counsel for the petitioners on the other hand maintained that the objection is misconceived and without merit. Both counsel made lengthy submissions and cited several authorities in support of their positions. We have carefully considered the submissions as well as the authorities cited. In our view, they raise a number of questions which we have summarized as follows:
(i) Whether the petition is a Representative/group petition or not.
(ii) If so, what is the effect of non-compliance with Order 1 rule 8?
(ii) Under which provisions of the Constitution was the petition filed?
(iii) Whether the petitioners had the capacity to file the petition or not.
(v))Whether Rule 17 of the Constitutional Court (Petitions and References) Rules, 2005, prohibits preliminary objections in Constitutional petitions.
(i)Whether the petition is a representative/group petition or not.
This was the main objection. Counsel for the 2nd respondent contended that being a group action, the petition was improperly before this court for failure by the petitioners to obtain leave from court before filing it as required by Order 1 Rule 8 (1) of the Civil Procedure Rules. The contention was premised on paragraph 3 of the petition which stated that:
“This petition is filed jointly by the petitioners on behalf of their respective membership to defend their individual and collective constitutional interests”.
Counsel asked Court to note that the said paragraph does not say that the petition was brought to defend the two petitioner’s constitutional interests. According to counsel, it is clear from the said paragraph that the petition is a representative or group petition brought by the petitioners on behalf of a group of people on the list attached to the petition as annextures “A” and “B”. As such, it is a mandatory requirement under Order 1 Rule 18 (1) of the Civil Procedure Rules which is applicable to the proceedings before this Court by virtue of Rule 23 of the Constitutional Court (Petitions and References) Rules,2005, that leave of Court must be sought and obtained prior to filing such action. The purpose of the leave is twofold:(1) for court to satisfy itself that the group has a common interest in the suit; (2) for the court to satisfy itself that the petitioners have the consent of the represented group to file the petition so as to be affected by the outcome of the same. The consent of the represented group is necessary because it would be unfortunate if a person who has not consented to the petition but was included therein is bound undemocratically to the resultant decision including the issue of res judicata or costs if the petition is lost.
To emphasize this point, counsel referred to the affidavit by one Tabuley Jad who has denied that Freight Cargo Masters, one of the members of the 2nd petitioner was consulted and has disassociated himself from the petition. Order 1 rule 8 was therefore intended to do away with situations such as the present one where members of the represented group disassociate themselves from the petition. Since no leave was sought and obtained by the petitioners prior to filing the petition in this Court, the petition is therefore improperly before court and ought to be dismissed. In support of his submissions on this point, Counsel cited the cases of Dr. James Rwanyarare & Others versus Attorney General of Uganda, Constitutional Petition No. 7 of 2002; The Thoubal District Farmers Association for Natural Calamities v The State of Manipur, The Department of Revenue and The Deputy Commissioner Thoubal Government of Manipur, Writ No. 978 of 2004 and Okwonga vs Anywar & The Church of Uganda  HCB 45.
Counsel for the petitioners disagreed. He contended on his part, that the petition is not a representative action. That this was a petition under Articles 50(2) and 137 and the names of the members of the petitioners were disclosed on the list attached thereto. Counsel distinguished the case of Dr. Rwanyarare from the instant case arguing that in that case, unlike in the instant petition, the names and identities of the members of UPC were undisclosed. It is therefore inapplicable to this petition.
We find merit in the objection raised by counsel for the 2nd respondent.
The third paragraph of the petition on which he based the objection reads as follows:
The court upheld the objection and ruled that Dr. Rwanyarare (the first petitioner) should have proceeded under Rule 13 (1) of Legal Notice No.4 of 1996, which provided, like Rule 23 of the Constitutional Court (Petitions and References) Rules 2005, that subject to the provisions of those Rules, the practice and procedure in respect of Constitutional Petitions in this Court shall be regulated as nearly as possible, in accordance with the Civil Procedure Act and Civil Procedure Rules made under that Act relating to the trial of suits in the High Court, with such modifications this Court may consider necessary in the interest of justice and expedition of proceedings.
This is what the court observed in its judgment:
We cannot accept the argument of Mr. Walubiri that any spirited person can present any group of persons without their knowledge or consent. That would be undemocratic and could have far reaching consequences. For example, and as counsel for the respondent rightly submitted, if the first and second respondents lost the action with costs to the respondent but they were unable to raise the costs, how would the respondents recover those costs from the unknown people called Uganda Peoples Congress? What if other members of the Uganda Peoples Congress chose to bring similar petitions against the respondent – would the matter be res judicata? We agree with counsel for the respondent that the first petitioner acted unlawfully to bring the representative action as he did. He could only bring the petition on his own behalf. The group’s petition is incompetent.”
(iii)Whether the petitioners had the capacity to file the petition.
Counsel for the 2nd respondent submitted that the petition was filed by two unincorporated associations. It ought to be dismissed with costs since it is judicially recognized that unincorporated associations have no legal existence of their own and cannot maintain or defend a suit or a petition in their own names as has been done in this petition.
Counsel for the petitioners disagreed with him. He contended that the petition discloses in its introductory paragraphs that the petitioners are unincorporated associations bringing action in respect of the individual and collective rights of their members. The petitioners formed these unincorporated associations to advance their common interests and to that extent their respective associations are akin to partnerships for the purposes of achieving the objectives of each association. That being the case, he argued, if any provision of the Civil Procedure Rules was to be applied “with necessary modifications” as enjoined by rule 23 of the Constitutional Court (Petitions and Reference) Rules 2005 on which the 2nd respondent relies , then the applicable order is not Order 1 rule 8(1) but Order 30 of the Civil Procedure Rules, which allows suits to be filed in the name of partnerships and unincorporated bodies and provides for disclosure, where necessary, of the identities of the members of such bodies. In his view, the fact that out of the 181 disclosed members of the 2nd petitioner, only one member, Freight Cargo Masters, has disowned the petition, cannot affect the right of the rest to take collective action to protect their individual and mutual business interests or to use the name of their associations in doing so.
Although group petitions are recognized by Article 50 (2) of the Constitution, we do not agree with counsel for the petitioners that the right to bring constitutional petitions is not limited to legal persons. Article 50(2) provides that:
“(2) Any person or organization may bring an action against the violation of another person’s or group’s human rights”.
In order to qualify under the above provision, the organisation must be recognised by law since it is an elementary principle of law that an unincorporated association is not a legal entity capable of suing or being sued. A suit by an unincorporated body is a nullity. See: Campbell Vs Thompson  ALL ER 831, and Fort Hall Bakery Supply Co. Ltd Vs Frederick Muigai Wangoe  E.A 474.
In the Frederick Muigai Wangoe case (supra), the plaintiffs brought an action for recovery of a certain sum of money from the defendant. During the hearing, evidence disclosed that the plaintiffs were an association consisting of forty five persons trading in partnership for gain and that the firm was not registered under the Registration of Business Names Ordinance. Counsel for the defendant thereupon submitted that the action was not properly before the Court, that the association was illegal as section 338 of the Companies Ordinance prohibited an association or partnership consisting of more than twenty persons formed for the purpose of business (other than banking) that has its object the acquisition of gain unless it is registered as a company under the Ordinance. Court held that the plaintiffs could not be recognised as having any legal existence, were incapable of maintaining an action and, therefore, the court could not allow the action to proceed. The action was struck out, with no order as to costs since the plaintiffs had no legal existence in law.
The decision of the Gauhati High Court In India in the case of The Thoubal District Farmers Association for Natural Calamities v The State of Manipur, The Department of Revenue and The Deputy Commissioner Thoubal Government of Manipur,(supra) cited by counsel for the 2nd respondent is of persuasive value to this Court. In that case, the court dismissed the constitutional petition on the ground that the petitioner, being an unregistered Association with no legal capacity, was incapable of maintaining the petition.
The same applies to the decision of the High Court in the case of Okwonga v Anywar & The Church of Uganda (supra), where the Church of Uganda, being an unincorporated association, was struck off the plaint as a defendant because its legal existence was not recognised in law.
As stated earlier, however, the petition was not brought under Article 50 of the Constitution.
Regarding the Order 30 of the Civil Procedure Rules, our view is that the Order does not apply to the petitioners. The Order is entitled:
“SUITS BY OR AGAINST FIRMS AND PERSONS CARRYING ON BUSINESS IN NAMES OTHER THAN THEIR OWN”
It reads in part as follows:
1. Suing of partners in name of a firm.
Any two or more persons claiming or being liable as partners and carrying on business in Uganda may sue or be sued in the name of the firm……………”
The members of the petitioners are not a partnership which is defined by S.2 of the Partnership Act as “ the relationship which subsists between persons carrying on a business in common with a view of profit.”
The petitioners are, on the other hand, described in the opening paragraphs of the petition as follows:
The 2nd petitioner is also an unincorporated association of business entities, with an emphasis on local ownership, similarly engaged in various aspects of clearing and forwarding and cargo handling business .” (Underlining is for emphasis)
(iv) Under which Constitutional provision was the petition filed?
This is a question of fact. Upon perusal of the pleadings, we find that the heading of the petition refers to “The Constitutional Court Petitions and Reference Rules, 2005”.There is no mention of either Articles 137 or 50 of the Constitution. However, under Rule 2 of the Constitutional Court (Petitions and References) Rules, 2005:-
Whether preliminary objections are prohibited by Rule 17 of the Constitutional Court (Petitions and References) Rules 2005.
This question arose from the response by counsel for the petitioners in the opening remarks to the preliminary objection. He contended firstly, that this kind of preliminary objection is expressly prohibited by the very rules on which counsel for the second respondent founded his objection particularly Rule 17 of the Constitutional Court (Petitions and References) Rules,2005. The rule reads:
“ 17 Irregularities.
Counsel for the 2nd respondent in his reply contended firstly that the petitioners’ counsel had misconstrued the meaning of rule 17. The rule does not prohibit preliminary objections in Constitutional matters. The objection or irregularity envisaged there under are those in “any notice or any other document sent by the Registrar to the petition”, but not irregularities in the petition itself, otherwise the Court’s discretion to dismiss petitions that do not disclose a cause of action or those that are legally defective as the instant one, would be curtailed, which would force the Court to listen to all manner of undeserving petitions at the expense of those that are properly before the Court. Counsel submitted further that the Court’s discretion to entertain preliminary objections is derived from its inherent powers as was recognised in Herman Ssemujju –vs- Attorney General,(supra)
Counsel pointed out that even after the passing of the said rules in 2005, this Court has entertained and dismissed petitions on preliminary points of law where the petitions are found to infringe provisions of law as the instant petition. He gave the example of Cheborion Barishaki –vs- Attorney General, Constitutional Petition No. 4 of 2006 to illustrate this point.
We agree with the reasoning of counsel for the 2nd respondent that the objections or irregularities referred to in rule 17 of the Constitutional Courts (Petitions and References) Rules, 2005, do not include objections or irregularities to the petition itself, otherwise the Court’s inherent powers to protect itself from abuse of its process would be curtailed, which would lead to absurdity. This Court has indeed dealt with several preliminary objections and continues to do so even after passing the Rules. Examples include the cases of Dr. James Rwanyarare & Another vs Attorney General, Herman Ssemujju Vs Attorney General, and Cheborion Barishaki vs Attorney General (supra) to mention but a few. In Cheborion Barishaki vs Attorney General, the preliminary objection was that the petition did not raise issues for constitutional interpretation. The Court found that the petition as it stood, save for paragraphs 1(d) and (e), did not raise issues for constitutional interpretation, and struck out the rest of the allegations with costs to the respondent. In the first two petitions, several objections were raised including non-compliance with Order 1 rule 8(1) of the Civil Procedure Rules. Court upheld the preliminary objections and struck out both petitions with costs to the respondent.
Similarly, in the instant petition, we uphold the preliminary objection raised by counsel for the 2nd respondent and we strike out the petition. Since a non existent petitioner can neither pay nor receive costs, there is no order as to costs.
Dated at Kampala this…21st ….day of …November…..2011
JUSTICE OF APPEAL/CONSTITUTIONAL COURT
JUSTICE OF APPEAL/CONSTITUTIONAL COURT
JUSTICE OF APPEAL/CONSTITUTIONAL COURT
JUSTICE OF APPEAL/CONSTITUTIONAL COURT
JUSTICE OF APPEAL/CONSTITUTIONAL COURT