Court name
High Court of Uganda
Case number
Civil Suit-1992/615
Judgment date
11 February 1994

Mukisa Foods Ltd v EastAfrican Development Bank (Civil Suit-1992/615) [1994] UGHC 14 (11 February 1994);

Cite this case
[1994] UGHC 14
Short summary:
Company Law

 

THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
CIVIL SUIT N0.615 OF 1992

MUKISA FOODS LIMITED::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::PLANTIFF

—versus—

EAST AFRICAN DEVELOPMENT BANK:::::::::::::::::::::::::::::::::::::::DEFENDANT
BEFORE: THE HON. MR. JUSTICE I. MUKANZA

RULING:—

The plaintiff in this case is a limited liability company incorporated in the Republic of Uganda and carrying on business in Uganda brought an action against the defendant a Development Bank seeking for a number of declarations against the defendant among which were that as a Ugandan limited liability company the plaintiffs property to wit freehold Register Volume 8 Folios 3,4 and 5 plot Nos. 124, 125 and 126 land at Kawempe Kyadondo and the plaintiffs other property, undertakings shares or equities were never subject to expropriation by the Government of Uganda pursuant to expropriation Decrees of Asian properties passed under Idi Amin or other expropriation laws enacted there after.
When the case came for hearing the learned counsel appearing for the defendant in the names of Sebalu from Sebalu and Lule company advocates raised a preliminary point of law hence this ruling to resolve the matter. He submitted that it was alleged in the plaint that the plaintiffs were a Uganda company as per pargraph3 but that was not true. According to the plaintiffs annexture “M” the annual return for the year 1970. The shareholders of the company paragraph 5, the particulars of the Directors, shareholders and secretaries if one compared the directors and their nationalities one would find that all the names are, almost similar. One Mr. Hassanali is British and held 2400 shares. One Mandatali is Ugandan and held 2160 shares, Badrudin a British and held 1800 shares, Sutuwali is British and held 1800 shares and Parali is British and held 1500 shares. All together the British and non Ugandan held 8040 shares and the Ugandan held 3960 shares. The non Ugandan holding share is 67 percent of the issued shares which is 1200 shares and Ugandans were holding only 33 percent. Looking at this share holding should the company be called Uganda. He submitted that it couldnot be. There has been several Investment Acts starting on in 1964. It was foreign Investment Protection Act. That act speaks of foreign National. It defines foreign National in section 5 as a person who is not a citizen of Uganda. That definition was carried out in the decree Amins Foregn Investment Decree of 1977. It also speaks of Foreign National. The same reference is also made in the Investment Code Statute No.1 of 1981.
In paragraph 4 it read it was registered interlia by Ugandan citizen of Asian extraction on or about the 29th August 1952 and had at all material times remained on the register as Ugandan company. Meaning even at the moment is a Ugandan company. He submitted that it was not from what he had submitted above. And that when the Asian decrees were passed the company which Was composed of 2 Ugandan directors and 4 British directors was not Ugandan company and therefore it was properly taken over or nationalized.
In fact the plaint relies heavily on the letter of repossession as a basis of claiming the right to their property. All the declarations they were seeking on page 1 that these suit properties were not subject to appropriation by the expropriated decree and what they wee referring to is repossession by letter as the authority he contended that the application for these properties ought to have complied with the Expropriated Properties Act No. 9/1982. The Act sets out conditions under which the property could be returned to the former owners. He applied to the plaintiff for the application for the properties. He gave them notice to produce. They produced the application which was dated 20th March 1992. The applicant ought to have complied with section 3 of Act of 1982 which was to the effect that former owners must apply in writing for repossession of popery business. That the properties were properly taken over and if the former owners were applying for them they did not comply with the section. The Act came into force on 24.2.1983. It was not three months and it was nearly nine years. The application was therefore seriously out of time and he had not seen any amendment and not even seen an application for extension of time. There had been some political announcements but those do not ouster the law.
He further submitted that there are other provisions that if the minister is releasing the business to the former owner (section 8 of Act 9 of 1982) he may make an order that the properties be retained by the Government was specifically referred to in section 5 which provides;
“Notwithstanding the provisions of subsection 2 of section 1 and section 2 the property or business affected eith provisions of the Act is applied for by a former owner and such property or business is the subject of a caveat, lien, loan, charge, mortgage or any other registered encumbrance in favour of a bank, financial institution or any other tender as the case maybe, with a view to securing mutually acceptable arrangements for the discharge of any such liabilities or encumbrances.”
He submitted that if those properties were returned to the former owners that arrangement should have been done. The minister never contacted former owner and the bank for mutual acceptable arrangement. Another point he submitted that if in returning property of this nature the law requires that he issues a certificate as provided under section 4 (Act 9 of 1982). In the present case something like letters of repossession had been issued. That was unknown in the law. That the certificate referred to the Act which gave power to the Registrar to amend the certificate of title appropriately. He enquired from his learned friends whether they had known of such amendment and they replied negatively. He finally submitted that the case before the court is not properly before you and the same should be dismissed.
Mr. Kalengera on the other hand submitted that the nationality is that of the company not the nationality of the individual shareholders. He submitted that the plaintiff company in this case is a Ugandan company. The company’s Act section 2(1) defines a company as that is found and registered under the Act. The same Act goes to differentiate between a Ugandan and foreign company in section 369 of the Company’s Act Cap were; it provides interlia all foreign companies incorporated in Uganda are Ugandan companies and not foreign companies. The definition of the company relevant to this case is the Company’s Act. The definitions contained in the Foreign Investment Act 1964, the foreign investment Code 1977 which definition have been relied upon by his learned friend are not relevant to this cases. Such definition would only be relevant in cases of foreign investment for the protection of foreign investors and dividends of assets. It is now settled law that all corporate bodies which are Uganda or foreign were not liable to expropriate in all the