Almutazim Tour & Travel Limited v Multazam Travels-SMC Limited (Company Complaint 11325 of 2022) [2023] UGRSB 13 (20 January 2023)


### THE REPUBLIC OF UGANDA

### IN THE MATTER OF THE COMPANIES ACT NO 1 OF 2012

# **AND**

# IN THE MATTER OF ALMUTAZIM TOUR AND TRAVEL

# **LIMITED**

### **COMPANY COMPLAINT NO.11325 OF 2022**

### ALMUTAZIM TOUR AND TRAVEL LIMITED::::::::::::::::::APPLICANT

#### **VERSUS**

#### MULTAZAM TRAVELS-SMC LIMITED::::::::::::::::::::::::::::::::::::

# **RULING**

### (Before Muliisa Solomon, Registrar of Companies.)

# **A. BACKGROUND**

- 1. On 10<sup>th</sup> December 2015 the Petitioner was incorporated as a company limited by shares dealing in the business of taking Muslims to perform Hijja and Umrah activities to the holy places of Mecca and Medina. - 2. In about July 2020, the Petitioner got to know that certain individuals then unknown to him were running adverts on a certain radio station under the name Multazam Travels to take Muslims for Umrah to the holy places of Mecca and Medina. - 3. The Petitioner complained to the radio station and the respondents abandoned the company name and started advertising under Multazam Travels-SMC Limited but pronouncing it as the


Petitioners company name of Almutazim Tour and Travel Limited. This is because the words Multzam and Almutazim have the same meaning in Arabic all referring to specified part of the Kaaba in Mecca.

- 4. On 8th August 2022, the Respondent was incorporated as a company limited by shares to carry on the business of Hajj and Umrah services i.e.; Islamic Pilgrimages to Mecca and Madinah as per the special resolution passed on 17th October 2022 and registered on 18th October 2022 and the Amended Memorandum and Articles of Association registered on 18th October 2022. - 5. The Petitioner contends that from the Memorandum and Articles of Association of the two companies the purpose and intended business location is not only similar but also the same and also that the Respondent Company was registered to confuse the Muslim Community and that they are one and the same as the Petitioner which has been in the business of transporting Pilgrims to Mecca for a period now exceeding 5 years. - 6. That the actions of the respondent have caused huge losses arising out of passing off, and if the Respondent's company name is maintained on the register, the two will not be capable of being distinguished by the authorities in Saudi Arabia because the two words of ALMUTAZIM and MULTAZAM refer to the same thing in Arabic. That the guides in these holly places speak Arabic and these two companies are normally a transliteration of the Arabic words. This is to facilitate easy identification and guidance in case a person is lost from their group and losing their lives. The purpose and the place of business of these two companies is the same and this is likely to cause confusion as it has already done. - 7. The Petitioner requests for such directives under Section $40(2)$ of the Companies Act for the proprietor of Multazam Travels-SMC Limited to change their name to avert losses arising out of passing off and others mentioned above.


8. The Petitioner was represented by Bazirengede Muhamadi and the Respondent did not appear for the hearing but filed a defence to the Petition as instructed in the summons.

### **B. ISSUES**

- a) Whether the name Multazam Travels-SMC Limited is similar to Almutazim Tour and Travel Limited. - b) What are the available remedies. - **C. DETERMINATION**

Issue 1: Whether the name Multazam Travels-SMC Limited is Similar to Almutazim Tour and Travel Limited.

- **9.** The Petitioner alleges that the words Multazam and Almutazim have the same meaning in Arabic all referring to the specific part of the Kaaba in Mecca. - **10.** The Petitioner submitted that the existence of both names on the company register creates confusion to the Muslim community that the two companies are one and the same as they are both involved in the business of transporting pilgrims to Mecca. - 11. Further that the guides in the Holly places speak Arabic and since the names mean the same thing, there's no easy identification and guidance in case a person is lost from their group during pilgrimage hence causing confusion and death since getting lost in the holly places is one of the major causes of death to the pilgrims. - 12. The Petitioner also relied on the letter from Uganda Bureau of Haj Affairs written on 01st December 2022 where the Secretary General confirmed that Petitioner and Respondent are similar and their existence is likely to confuse the Uganda Bureau of Hajj Affairs and the general public.


- 13. The Petitioner in conclusion made request for such directives under Section 40(2) of the Companies Act for the Proprietor of Multazam Travels-SMC Limited to change their name to avert losses arising out of Passing off. - 14. The Respondent in defence asserted that the two are distinct names with different meanings and that the allegation that the respondent intends to mislead is not true. - 15. That the allegations of the petitioner that the target operation base is the same to warrant a change of the respondent's name is unfair and this shall cause untold loss to the company as there are so many companies operating the same business and have little the same but distinct names. - 16. Further that the economy they operate is a free market economy that the petitioner cannot dominate in exclusion of the respondent by petitioning the Registrar General to scrap off the Respondent's name off the register for fear of competition.

# D. ANALYSIS

17. The question before me is whether MULTAZAM TRAVELS-SMC LIMITED is confusingly similar to ALMUTAZIM TOUR AND TRAVEL LIMITED. There are two sections of the Companies Act that apply in resolution of this question. Section 36 (2) and 40 (2) of the Companies Act. I will reproduce them. The first is section 36 of the Companies Act 2012 which deals with reservation of a company names. It provides;

"36. Reservation of name and prohibition of undesirable names

$(2)$ No name shall be reserved and no company shall be registered by a *name, which in the opinion of the registrar is undesirable.* ...." (*Emphasis mine*)

18. The question of inquiry here is whether the name Multazam Travels-SMC Limited was reserved in error, particularly on grounds of similarity with Almutazim Tour and Travel Limited. If this is answered in the affirmative, the remedy lies under section $40(2)$ of the Companies Act, which states as follows:

"40. Change of name.

(2) Where, through inadvertence or otherwise, a company on its first registration or on its registration by a new name is registered by a name *which, in the opinion of the registrar, is too similar to the name by which* a company in existence is previously registered, the first-mentioned *company may change its name with the consent of the registrar and, if the* registrar so directs within six months after it is registered by that name, shall change it within six weeks from the date of the direction or such longer *period as the registrar may allow."*

19. Thus section $40(2)$ offers cure for errors that may be made in reserving and registering similar names. Once it is found that the company was reserved in error because it is too similar to the existing name, then the company that registered subsequent to the existing one is required to change name. It should be noted that determination of similarity of names is a matter that the law left to the discretion of the registrar. The language of section 36(2), gives


somewhat ambiguous discretion. It states: "No name shall be reserved and no company shall be registered by a name, which in the opinion of the *registrar is undesirable...."*.

- 20. What is undesirable for one registrar may not be desirable for another. However, a registrar should exercise this discretion judiciously and there are certain considerations that guide registrars in exercising discretion while reserving names. In fact, guidelines have been developed by URSB to define the scope of this discretion. Similarity with existing names is number one on the list of grounds upon which a name should be rejected. - 21. The question for our determination is whether a reasonable registrar should have rejected the name Multazam Travels-SMC Limited on grounds that it appears similar to Almutazim Tour and Travel Limited. In my opinion the name Multazam Travels-SMC Limited was registered in error and is similar to Almutazim Tour and Travel limited. If on application to reserve it, I found Almutazim Tour and Travel limited, I would have reservations reserving it. The only slight difference in the two names is the addition of the word "AL". The other words "Travels" and "SMC" do not show any difference in the eyes of an ordinary person. This is because they are standard terms that can be invoked by any company. The addition of the word "SMC" to a single member company is a mandatory requirement of the law. While the word "Travels" describes the nature of business of the entity and in itself cannot be viewed as a


distinguishing feature. This therefore leaves the word "AL" as the only distinguishing term in the two names, which in my opinion is too narrow to distinguish the entities in the eyes of an ordinary person.

- 22. Moreover, the word "similar" does not mean "same". The online Cambridge Dictionary<sup>1</sup> defines the word "similar" as "looking or being almost, but not exactly, the same:". A registrar should ask himself or herself whether an ordinary person can distinguish between the two names. After asking that question, then he or she can exercise discretion under the law to reject or approve a name. - 23. In my opinion the name Multazam Travels-SMC Limited, though not the same as Almutazim Tour and Travel limited is smilar and should not have been registered. A person of ordinary intelligence in the village professing to the Islamic faith would take the two companies to be the same, or Multazam Travels-SMC Limited, as being the short form of Almutazim Tour and Travel limited. This is not only my opinion; I have consulted our reservation officers and registrars. A significant majority of them said they would not reserve Multazam Travels-SMC Limited should it come to their attention that there is another company registered in the names of Almutazim Tour and Travel Limited which has a similar meaning in Arabic


<sup>&</sup>lt;sup>1</sup> https://dictionary.cambridge.org/dictionary/english/similar. Accessed on the 29/5/19

- 24. Mr. Epunau Andrew, the head of Reservation, Ms. Faith Akia, a Reservation Officer, Ms. Agnes Kagoda, Registration Officer, Ms. Agoro Eunice, a Senior Registration Officer, Mr. Brian Ochora, a Registration Officer all said they would not reserve Multazam Travels-SMC Limited if it comes to their knowledge that Almutazim Tour and Travel limited was already registered. This coupled with the letter dated 02<sup>nd</sup> December 2022 issued by Uganda Bureau of Haj Affairs the regulator of Hajj and Umrah activities in Uganda confirming that the existence of Almutazim Tour and Travel Limited and Multazam Travel-SMC Limited on the register is likely to confuse them and the general public, only leads me to a finding that the company was registered in error on grounds of similarity with an already registered company in both name and pronunciation. - 25. Further, from evidence of both parties, it became apparent to me that the shareholders of the respondent company had premeditation in registering the name Multazam Travels-SMC Limited. Kasirye Nasif Nalumoso, Director and shareholder of the respondent company on 17<sup>th</sup> October 2022 passed a special resolution and registered it on the $18<sup>th</sup>$ day of October 2022 together with amended memorandum and articles of association adding the objective of carrying out business of Hajj and Umarah Services i.e., Islamic pilgrimages to Mecca and Madinah as its main objective which is also the main objective of the Petitioner. From the sequence


of events, and the fact that the respondent included the main objective as that of the petitioner who of the two was first to use it, makes it clear to me that the respondent's shareholder registered their company with intention of riding on the established market of the petitioner. Why didn't they stick to their original main objectives or register a different name?

26. For those reasons and pursuant to section 40 (2) of the Companies Act, 2012, the Director of Multazam Travels-SMC Limited is hereby directed to change the company name within six weeks from the date hereof with no order as to costs.

I so order.

Right of appeal explained.


**Muliisa Solomon**

**Registrar**

20/01/2023