China Road & Bridge Corporation v Welt Machinen Engineering Limited (Civil Appeal 13 of 2019; Civil Appeal 14 of 2019) [2022] UGSC 8 (2 February 2022)

Full Case Text

# THE REPUBLIC OF UGANDA

# IN THE SUPREME COURT OF UGANDA

# AT KAMPALA

# (CORAM: ARACH-AMOKO; MWONDHA; MUGAMBA; MUHANGUZI; CHIBITA, JJSC.)

**CONSOLIDATED CIVIL APPEALS NO. 13 & 14 OF 2019**

**CHINA ROAD & BRIDGE CORPORATION :::::::::::: APPELLANT**

**VERSUS**

# WELT MACHINEN ENGINEERING LIMITED :::::: RESPONDENT

### AND

### CHINA ROAD & BRIDGE CORPORATION :::::::::::: APPELLANT

#### **VERSUS**

# 1. WELT MACHINEN ENGINEERING LIMITED

### 2. ATTORNEY GENERAL ::::::::::::::::::::::::::::::::::::

(Appeal from the decision of the Court of Appeal of Uganda at Kampala before Hon. Justice A. C. Owiny Dollo, DCJ, Hon Justice Cheborion Barishaki JA, and Hon. Justice Percy Tuhaise, JA, dated 21st June 2019, Civil Appeal)

### **JUDGMENT OF CHIBITA**

### Introduction.

This is a second appeal arising from the judgment and orders of the Court of Appeal in Civil Appeals Nos. 52 of 2017 and 88 of 2018.

### **FACTS OF THE CASE**

These appeals have a long and checkered history. However, due to the multiplicity of the proceedings involved, i.e. two High Court suits, approximately 8 Miscellaneous applications, 2 appeals in the Court of Appeal, I have chosen to give a systematic version of the events leading to these appeals for better understanding and resolution of the same.

In 2013, the Uganda National Roads Authority (UNRA) awarded a contract to the China Road & Bridge Corporation (hereinafter referred to as the appellant company) to construct the Moroto-Nakapiripirit Road. Subsequently, the appellant company approached the Nakapiripirit District administration for permission to excavate building stones (granite) from Kamusalaba rock (hereinafter referred to as the suit rock) in Nakapiripirit for purposes of constructing the aforesaid road.

On the 13th day of May 2013, Nakapiripirit District Local Government entered into a hire of land agreement wherein the appellant company was given authority to mine stones from the suit rock at a consideration of 50,000,000/= (Fifty Million Uganda Shillings only) for the construction of Moroto-Nakapiripirit road. The said agreement was signed by Ilukol Jobs Lomenen, the Principal Assistant Secretary/ Acting Deputy Chief Administrative Officer (Ag. DCAO) on behalf of the District. Eric Onen, the Chief Administrative Officer

$\mathsf{Z}$

(CAO) signed as a witness, alongside Lorukale Paul, the LC V Councillor, Lorengdwat Sub county, and Oclery Emmanuel, DNRO.

$\mathcal{L}^{(0)}(x)$

Ilukol Jobs Lomenen (Ag. DCAO) also signed another document on behalf of the District titled, "Owner's Statement on Reinstatement of the Rock and Land" spelling out the terms upon which the suit land shall revert to Nakapiripirit District Local Government.

On 4th June, 2013, after the appellant company had started the process of quarrying the granite stones, Welt Machinen Engineering Ltd, (hereinafter referred to as the $1^{st}$ respondent), obtained a prospecting license within the same area.

The 1st respondent company also obtained location licenses No. 1194 and 1195 on the 16th of August, 2013 from the Ministry of Energy and Mineral Development. These were said to confer unto the 1st respondent exclusive rights to excavate granite stones from the suit rock.

Armed with these location licences, the 1st respondent company sought to have the appellant company terminate its excavation on ground that it was the rightful and exclusive holder of the rights to excavate the same. The $1^{st}$ respondent was not successful.

The 1st respondent (then plaintiff) as a result sued the appellant company (then $1^{st}$ defendant), Ilukol Jobs Lomenen ( $2^{nd}$ defendant), and Nakapiripirit District Local Government (3rd defendant) in the High Court of Uganda at Soroti vide HCCS No. 16 of 2014 for trespass.

$\overline{3}$

It sought orders that a permanent injunction issues restraining the defendants and or their agents, servant, assignees from trespassing upon the suit land; a declaration that the defendants have no legally recognizable rights to extract/mine granite stones from the suit land; an order of eviction; general damages for trespass on the 1st respondent's location licence area; an order against the defendants to account for the proceeds of the appellant company's unlawful activities; aggravated and exemplary damages; special damages of $8,582,022,000$ = interest and costs of the suit.

$\mathcal{L}^{\text{max}}(\mathcal{L}) \subset \mathcal{L}^{\text{max}}(\mathcal{L})$

Each of the defendants filed a written statement of defence in response to the plaint.

In its defence, the appellant company denied the claims stating that it was entitled to quiet use of the land having entered into a hire agreement with Nakapiripirit District Local Government for the life span of the project. It also filed a counterclaim for trespass in which it sought a permanent injunction against the 1st respondent and alleged fraud on the part of the $1^{st}$ respondent in obtaining the mining licenses.

The particulars of fraud included: the shareholders of the $1^{st}$ respondent i.e. Koriang Aporole, Lyok Pudale Raphael, Akol Charles, Peter Lokoris, Lokongole Loyor and Lokol Joseph claiming proprietorship of the suit land under customary tenure; intimidation on the part of Hon. Lokeris of the leadership of Lorengedwat sub county, Nakapiripirit District etc.

$\overline{4}$

The $2^{nd}$ defendant in his defence denied the claims stating that he acted in his official capacity as Acting Deputy Chief Administrative Officer for Nakapiripirit District which was the rightful owner of the suit rock. He also alleged fraud on the part of the 1st respondent stating that the Lokeris family who were the shareholders of the 1st respondent first purported to customarily own the suit rock whereas not and that when that claim failed they purported to use location licences to forcefully take over the excavation of the rock.

Nakapiripirit District Local Government, the 3rd defendant also denied the claims and stated that the family of Hon. Peter Lokeris, the then State Minister for Energy and Mineral Development had first claimed the suit rock as theirs and that he had used his office to unlawfully obtain location licences with the sole goal of defeating the interests of the $1^{st}$ respondent.

In the joint scheduling memorandum, the agreed issues for trial were as follows;

- 1. "Whether the plaintiff/ $1^{st}$ respondent was the lawful owner of the location licenses for exclusive mining of granite on the suit rock. - 2. Whether the $1^{st}$ defendant/ appellant is trespassing or infringing on the plaintiff's rights. - 3. Whether the second defendant and third party had capacity to enter the agreement to operate Kamusalaba rock land with the $1$ st defendant.

4. Whether the second defendant has $/$ owns reversionary interest in the said Kamusalaba rock.

5. Remedies."

$\mathcal{L}^{\text{max}} \sim \mathcal{L}$

On 14th April, 2016, the High Court of Uganda sitting at Soroti delivered its decision. Wolayo J, resolved the aforementioned issues as follows:

Issue 1. That the $1^{st}$ respondent was the lawful owner of location licenses 1194 and 1195 whose coverage area was limited to the area in Atumtoak village and did not extend to the Kamusalaba Village where the appellant company was excavating.

Issue 2: That the appellant company was not trespassing on the $1st$ respondent's licensed area.

Issue 3: That the rock excavated from Kamusalaba contained granite mineral and that the appellant company required a licence from the Commissioner of Survey and Mines permitting it to mine and crush aggregate stones for road construction. That this meant that the $2^{nd}$ defendant could therefore not purport to have capacity to enter into any agreement to mine on behalf of the 3rd defendant.

Issue 4: that the $2^{nd}$ defendant did not have reversionary interest in Kamusalaba rock.

Wolayo J, made the following orders:

1. "The $1^{st}$ defendant shall render an account of the quantity of aggregates procured from Kamusalaba rock to the Attorney General and pay the Government its monetary value within

reasonable time and not later than 30 days from the date of this order.

$\mathcal{L}^{\mathcal{L}}\left( \mathcal{L}^{\mathcal{L}}\right)$

- 2. A permanent injunction shall issue restraining the $1^{st}$ defendant from mining Kamusalaba Rock. - 3. The Commissioner Geological Survey and Mines take steps to investigate and prosecute future breaches of the Mining Act 2003. - 4. The order dated $9^{th}$ September 2015 attaching the $1^{st}$ defendant's payment of 8.5 Billion/held by UNRA is hereby vacated. - 5. As the plaintiff was successful on three issues while the defendant was successful on two issues, and because it is the plaintiff who brought this action that exposed the irregularities by the 1st defendant, the 1st defendant shall pay $\frac{1}{2}$ of the taxed *costs to the plaintiff.*"

On 18th April, 2016, four days after the delivery of the judgment of the High Court at Soroti, D. B. Bireije, for the Solicitor General wrote a letter to the Ministry for Energy and Mineral Development titled "JUDGEMENT IN THE HIGH COURT SOROTI IN CIVIL SUIT NO. 16 OF 2014 WELT MACHINEN ENGINEERING LTD VERSUS CHINA ROAD AND BRIDGE CORPORATION ILLUKOL JOBS **LOMENEN** $\mathop{\rm AND}\nolimits$ **NAKAPIRIPIRIT DISTRICT** LOCAL GOVERNMENT/THIRD PARTY" seeking technical advice and verification from the Ministry of Energy and Mineral Development on whether Kamusalaba rock that Wolayo J, had decreed to the Attorney General really fell within the Government controlled area or the 1st respondent's licensed area. (See page 445 of record in Appeal No.13 of 2019)

$\overline{7}$

On 13th June, 2016, in response to the Solicitor General's letter, Dr. F. A Kabagambe -Kaliisa, the Permanent Secretary of the Ministry of Energy and Mineral Development spelt out the key findings of the verification were, inter alia, as follows:

- 1. "Part of the Kamusalaba rock falls within the area covered by LL1195 currently covered by the Welt Machinen Engineering Ltd. - 2. The quarry that was used to mine granite/gneiss covered the area covered under location licence No. 1194. - 3. The location licence holder is, therefore, entitled to full compensation for the value of the granite/gneiss that was mined from its licensed area. This finding is derived from section $60(1)$ of the Mining Act, 2003, which provides for rights and duties of Location License holders ......." (See pages 586-588 of record in Appeal No. 13 of 2019)

On the quantities mined from the suit rock, the verification process revealed that the total granite gneiss mined was 727,030.33 tonnes, of which 561,976.48 tonnes were mined from the quarry within Location License, LL1194 whereas 165,053.85 tonnes were mined from outside Location Licensed Area LL1194.

Pursuant to this letter, Welt Machinen Engineering Limited filed a fresh suit in the High Court of Uganda at Kampala vide HCCS No. 278 of 2016, Welt Machinen Engineering Ltd vs. Attorney **General** against the Attorney General ( $2^{nd}$ respondent) as the decree holder or judgment debtor in HCCS No. 16 of 2014.

The 1st respondent's case against the Attorney General was for unjust enrichment, oppression and knowingly attempting to receive monies lawfully due to the $1^{st}$ respondent and a declaration for the full commercial/monetary value due and payable to the $1^{st}$ respondent as a result of illegal mining of granite on the $1^{st}$ respondent's mining area.

In its Written Statement of Defence, the $2^{nd}$ respondent by way of no contest and denial, stated that in reliance upon the expert opinion of the staff of the Department of Mines and Geological Surveys, relinquished all interests in the suit property and conceded to the $1^{st}$ respondent's ownership and entitlement to the monies that had been decreed to it by the High Court of Soroti.

The 1st respondent filed Misc. Appl. No. 700 of 2016, Welt Machinen Engineering Ltd vs. Attorney General, seeking orders that judgment on admission be entered in its favor in accordance with the 1st respondent's prayers and the unequivocal admissions of the 2nd respondent and for the costs to be provided for. Pursuant to this application, the HCCS No. 278 of 2016 was settled, less than a month after it was filed and approximately four months after the delivery of the judgment of the High Court Soroti. Both parties jointly filed a consent judgment on 11th August, 2016, in the following terms.

1. The Defendant /Respondent be paid the sum of Ugx. 10,505,296,659= (Shillings Ten Billion, Five Hundred Five Million, Two Hundred Ninety-Six Thousand, Six Hundred Fifty-

Nine Only) being the value of 165,053.85 tonnes of granite extracted outside location license Area LL1194.

2. The Plaintiff/ Applicant be paid the sum of Ugx. 35,768,678,999= (Shillings Thirty-Five Billion, Seven Hundred Sixty-Eight Million, Six Hundred Seventy-Eight Thousand, Nine Hundred Ninety-Nine Only) being the value of 561,974.48 tonnes of granite from location license Area LL 1194." (sic)

On the basis of the foregoing, Alex Ajiji, Deputy Registrar (as he then was) entered judgment on admission under order 13 rule 6 & 52 of CPR on 15th August, 2016 in the following terms.

- 1. "The plaintiff being the lawful license Holder in respect of Mining Area and License Number LL1194 is entitled to uninterrupted enjoyment and benefits of all the economic and commercial value of all and any minerals therefrom. - 2. The quantity of 561,976.48 tonnes of granite mined from Location License Area LL1194 lawfully at all material times belong to the plaintiff as confirmed and proven by the Ministry of Energy and *Mineral Development.* - 3. Payment of the commercial value of the granite in 2 above to the Defendant would be improper and amount to unjust enrichment of the Defendant. - 4. The commercial value of all the granite mined from Mining License Area LL1194 is due and payable to the plaintiff. - 5. Payment in full of the commercial value of the granite in 2 above, being Ugx. 35, 768,678,999/=, as declared by the Defendant in

its admission and answer to the plaintiff's prayers, be made directly to the plaintiff by the Uganda National Roads Authority (UNRA) and or the Secretary of the Treasury out of monies due and owing to China Road and Bridge Corporation, the judgment debtor in Soroti High Court Civil Suit No. 16 of 2014.

- 6. The Defendant by admission is permanently restrained from making claim or taking benefit from the right of the plaintiff in the value of the granite mentioned in 2 above, which properly belong *to the plaintiff.* - 7. The Defendant and Uganda National Roads Authority (UNRA) are hereby ordered to locate and preserve all funds established and determined as the commercial value of the granite in 2 above properly due and payable to the plaintiff and to cause the same to be remitted to and for the benefit of the Plaintiff. - 8. Each party shall bear its own costs."

The aforementioned judgment and orders of the High Court did not cater for the interests of the Attorney General for the payment of Ugx. 10,505,296,659= (Shillings Ten Billion, Five Hundred Five Million, Two Hundred Ninety-Six Thousand, Six Hundred Fifty-Nine Only) which was the value of 165,053.85 tonnes of granite extracted outside location license Area LL1194.

On 22nd September, 2016, the Attorney General, being dissatisfied with the same filed Misc. Appl. No. 806 of 2016, Attorney General vs. Welt Machinen Engineering Limited for orders that: 1. A declaration that whereas the Respondent is the license holder of Location License Area No. LL1194 of which 561,976.48 tonnes of granite was mined belongs to the Respondent, the quantity of 165,053.85 tonnes of granite was mined outside the location license area LL1194 belonging to the Government of Uganda.

$\mathcal{H}_{\mathcal{M},\mathcal{M}}$

- 2. A declaration that the order of payment of the commercial value of the granite in 1 above due to the Government, having been made in Soroti HCCS No. 16 of 2014 and further as properly advised by the Ministry of Energy and Mineral Development, be *made to the Applicant.* - 3. An order of payment of the sum Ugx. = $10,505,182,390$ =directly to the Applicant by the Uganda National Roads Authority out of the monies due and payable to China Road and Bridge Corporation as directed in HCCS No. 16 of 2014.

An order against UNRA to locate and preserve all funds in 3 above properly due and payable to the Applicant and to cause the same to be remitted to the Applicant as contained in the judgment of Soroti HCCS No. 16 of 2014."

This application was conceded to by the $1^{st}$ respondent. On the $7^{th}$ October, 2016, Alex Ajiji, Deputy Registrar (as he then was) adjusted the said orders to include the interests of the Attorney General, the $2nd$ respondent. It was ordered that under clause 3 of the new orders that the quantity of 165,053.85 tonnes of granite mined outside the Location License Area of the $1^{st}$ respondent belonged to the $2^{nd}$ respondent, and that the sum of Ugx 10,505, 182, 390 = be paid directly to the 2nd respondent by the Uganda National Roads

Authority out of the monies payable to the appellant company as directed in Soroti HCCS No. 16 of 2014. (See Clause 8).

$\mathcal{L}_{\mathcal{A}}$

Being aggrieved by the various proceedings between the 1st respondent and 2nd respondent in the High Court of Uganda at Kampala, the appellant company, China Road and Bridge Corporation filed Miscellaneous Cause No. 876 of 2016, China Road and Bridge Corporation vs. Welt Machinen Engineering Ltd & **Attorney General.** The application sought orders that:

- (a) "The designed and code named judgment/order sanctioned and/or originated by the Civil Registrar of the Court as moved by the Respondents and dated 7th October, 2016 be reviewed and consequently varied and set aside. - (b) That the review process takes into account the existence of the decree in HCCS No. 16 of 2014 sitting at Soroti dated 14th April 2016 pertaining the same subject matter, as well as the pending appeal in the Court of Appeal. - (c) That an order restraining the Respondents from enforcing and/or executing the orders in Misc. Appln. No. 806 of 2016 (d) Costs of this application be provided for." (sic)

The grounds for this application were that the appellant company as the debtor in HCCS No. 16 of 2014 was by law aggrieved by the consents and orders in HCCS No. 278 of 2016, Misc. appl. No 700, and 806 of 2016 and that that appellant company was being condemned unheard contrary to Article 28, that the 1st and 2nd respondents sought to appropriate the appellant company's money

that was still in the custody of Uganda National Roads Authority (UNRA), that proceedings in High Court Kampala sought to circumvent the orders of Wolayo J, in HCCS No. 16 of 2014 and that Alex Ajiji, Deputy Registrar (as he then was) cannot be said to override the orders of the Judge of the High Court.

Apo- Aroma Felix and Denis Bireije swore affidavits in reply on behalf of Welt Machinen Engineering Ltd, 1st respondent and Attorney General, the $2^{nd}$ respondent respectively. They averred for the $1^{st}$ respondent that the application by the appellant company was contumelious, oppressive and an abuse of court process and only meant to delay the enforcement of the rights of the $1^{st}$ respondent as determined by Court.

Misc. Appl. 876 of 2016, the application for review, was determined by Wolayo J, who was now a judge at the Civil Division of the High Court. At the joint scheduling, seven issues were framed for determination.

- 1. "Whether the registrar had jurisdiction to hear MA.700 and 806 arising from CS. No. 278 of 2016. - 2. Whether the $1^{st}$ and $2^{nd}$ respondents are entitled to remedies in *MA.* 806 and 700 of 2016. - 3. *Whether the applicant's claim in CS.*278 of 2016 is res judicata. - 4. Whether the applicant was entitled to be heard in CS 278 of 2016. - 5. Whether the applicant owes the Attorney General any money.

6. Whether the Attorney General can dispose of this money in any manner it deems fit. Whether the affidavit in rejoinder filed on 7.12.2016 by the applicant offends the law on affidavits.

$\sim$

7. Whether the affidavit in rejoinder filed on 7. 11.2016 by the applicant offends the law on affidavits.

Before the application for review could be determined, Uganda National Roads Authority (UNRA) also filed Misc. Appl. No. 886 of 2016, seeking court's direction on who of the 3 persons (the appellant, 1st respondent and 2nd respondent) all of whom were making exclusive claims to the money decreed, should be paid that money.

On 20th December, 2016, court ordered UNRA to deposit the money in court pending determination of the rights of the parties over the money in issue.

On 17th February, 2017, Wolayo J, held that the HCCS No. 278 of 2016 was not res judicata because the respondents litigated over the proceeds of aggregate from Kamusalaba Rock in which the appellant had no legal right, that the appellant was not entitled to be heard on the matters on the claim of unjust enrichment between the respondents but was only entitled to be heard when it came to enforcement of the orders from the judgment in HCCS No. 16 of 2014 and also that the appellant company had a right to notice of the execution of 35,768,679,999= due to the $1^{st}$ respondent. On the issue of the jurisdiction of the Deputy Registrar to enter judgment in HCCS No. 278 of 2016, Misc. Appl. 700 and 806 of 2016, it was determined

that in the claim for unjust enrichment, the Deputy Registrar had the jurisdiction under Order 50 of the Civil Procedure Rules to enter judgment on admission in non-contentious matters. On whether the respondents were entitled to remedies in Misc. Appl. No. 700 and 806, it was determined that since the quantity of the aggregate had not been determined by a competent authority, the money could not be paid out and was therefore subject to review.

For the ascertainment of the monetary value due to the respondent, it was directed that the Chief Government Valuer ascertains the monetary value of the 723,030 tonnes of aggregate mined by the appellant company with due regard to the bill of quantities and other relevant factors and avail court with the valuation report within a week for the issuance of final orders.

The valuation report dated 3rd March, 2017 placed the value of raw rock at $20,744,711,490.15$ whereas the cost of processing it was placed at 25,354,647,711.85/=. Wolayo J, disregarded the cost of processing the rock and only relied on the value of raw rock which placed the value per tonne at $29,000/=$ .

This translated into Ugx. 16,298,000,000/= for the 562,976 tonnes due to the 1st respondent and Ugx. 4,786,537,000/= for the 165,053 tonnes owned by $2^{nd}$ respondent.

On 14th March 2017, Wolayo J, determined that the aforementioned sums were to be paid from the money that had been deposited in court as per the court order and the rest of it was to revert to UNRA.

Orders in paragraphs 7 and 8 of the Misc. Appl. No. 806 of 2016, that placed the amount due at Ugx. 35, 768,678,999/= for the $1^{st}$ respondent, and Ugx. =10,505,182, 390 for the $2^{nd}$ respondent was varied. Each party was also ordered to bear its costs.

On 20th March, 2017, these orders were further clarified to make provision for the payment schedule of the amounts due to the respondents. (See page 346 of record)

On 9th March, 2017, approximately a year after the delivery of the judgement in HCCS No. 16 of 2014, while Misc. Appl. No 876 was pending in the High Court at Kampala, the appellant company filed a Notice of Appeal in the High Court at Soroti. The Notice of Appeal was validated by the Court of Appeal.

The appellant, aggrieved by the above decision, appealed against the ruling vide CACA No. 88 of 2018 on 2 grounds namely;

- The LTJ erred in law and fact when she failed to set aside the i. entire consent judgment orders entered and or made by the registrar of the High court (Civil Division) in; - . HCMA No. 700 of 2016 (Welt Machinery Eng. Ltd vs. AG) - . HCMA no. 806 of 2016. AG vs Welt Machinery Eng. Ltd

Both arose from HCCS No. 278 of 2016 Welt Engineering vs. AG.

ii. There was illegality in HCCS no. 278 of 2016, Welt Machinery Eng. Ltd vs AG, whose cause of Action was founded on illegal mining licenses granted by the Ministry of Energy & Mineral development to the $1^{st}$ respondent in respect of rocks/

aggregates which are not minerals under the constitution of *Uganda.*

The appeal was dismissed with costs.

Amidst the trial proceedings in the High Court at Kampala, the Appellant Company filed an appeal to the Court of Appeal vide Civil Appeal No. 52 of 2017 challenging the court's orders in Civil Suit No. 16 of 2014 at Soroti on the following grounds;

- 1. The Learned Trial Judge erred in law when she held that the respondent was the lawful owner of the location licenses for *exclusive / sole mining of granite on the suit rock.* - 2. The Learned Trial Judge erred in law and fact when she held that the $2^{nd}$ defendant and the $3^{rd}$ party did not have the capacity to enter into an agreement with the Appellant to enter, access and use Kamusalaba rock land. - 3. The Learned Trial Judge erred in law and fact when she held that there was no fraud in the process of applying for the location licenses and imputed reference to village as a mistake yet it was pleaded by the respondent. - 4. The Learned Trial Judge erred in law and fact by disallowing the counter claim that the plaintiff was fraudulent when he added the word village to Atumtoak rock for his application, to read Atumtoak village; and use the same application to process two licenses for Kamusalaba and Atumtoak rock; and continued to process both licenses even after being warned by the CAO of the activities of the Appellant on the suit rock.

- 5. The Learned Trial Judge erred in law and fact when she found and ordered that the appellant pays the monetary value of the quantity of aggregate procured from Kamusalaba rock. - 6. The Learned Trial Judge erred in law and fact when she awarded the Respondent half the taxed bill of costs from alleged exposing a breach yet the respondent was suing the Appellant for his own gain.

The 1st respondents also filed a cross appeal based on the following grounds;

- 1. The Learned Trial Judge erred in law and fact when she found that the Appellant's mining operations at Kamusalaba were not within the respondent's licensed area. - 2. The Learned Trial Judge erred in law and fact when she found that the Appellant had not infringed on the Respondent's mineral rights. - 3. The Learned Trial Judge erred in law and fact in her assessment of special damages in the circumstances of the case.

The Court of Appeal dismissed the Appeal and allowed the cross Appeal with costs in favor of the $1^{st}$ respondent.

The Appellant company was aggrieved by the above decisions hence filed two appeals vide Supreme Court Civil Appeal No. 13 of 2019 (China Road & Bridge Corporation vs. Welt Engineering Ltd & The Attorney General) arising out of Civil Appeal no. 88 of 2018 and Supreme Court Civil Appeal No. 14 of 2019 (China Road & Bridge

Corporation vs. Welt Engineering Ltd) arising out of Civil Appeal No. 52 of 2017.

At the hearing, the court directed consolidation of the two appeals hence the present case. The consolidated appeal was premised on the following grounds;

- 1. The learned Justices of the Court of Appeal erred in law when they held that the Respondent's location licenses were not procured and held fraudulently and illegally. - 2. The learned Justices of Appeal erred in law when they held that the Nakapiripirit District Local Government did not have power to enter into a contract with the Appellant to extract granite stones from the Kamusalaba Rock to build the Nakapiripirit - Moroto Road. - 3. The learned Justices of Appeal erred in law when they held that appellant required a Mining License to quarry and extract aggregates from Kamusalaba Rock to build the Nakapiripirit - Moroto Road. - 4. The learned Justices of Appeal erred in law when they held that the Registrar had power to enter the impugned judgments on admission in HCCS No. 278 of 2016 and Misc. Apps. Nos. 700 of 2016 and 806 of 2016. - 5. The learned Justices of Appeal erred in law when they held that the learned judge in Misc. Appl. No. 876 of 2016 had power to review and vary her judgment in HCCS (Soroti) No. 16 of 2014 and dismissed the Appeals with costs, and

allowed the $1st$ respondent's Cross-Appeal with costs and issued a Permanent injunction against the Appellant.

6. The learned Justices of Appeal erred in law when they held that the appellant had to pay compensation of Shs 23,995,130,000/= to the $1^{st}$ Respondent.

## **Representation**

The Appellant was represented by Mr. Enosi Tumusiime. On the other hand, both $1^{st}$ respondent and $2^{nd}$ respondent were represented by Terence Kavuma and Mr. Siraj Ali.

Mr. Ding Jianming and Mr. Dong Yangnan, Deputy General Manager and Legal Manager of the Appellant respectively were in Court.

Parties filed written submissions which they adopted at the trial.

## Appellant's submissions

## Ground 1

Counsel submitted that it has always been the appellant's case that the 1st respondent fraudulently procured and held the Location Licenses and which are therefore null and void *ab initio*. Counsel stated that fraud was manifest in the following components;

• The 1st respondent had notice of the Appellant's Agreement with Nakapiripirit District Government and the Appellant's activities quarrying at Kamusalaba before the 1st respondent applied for location licenses.

- Kamusalaba rock was held by the 1st respondent's directors' family members under customary tenure. - 1st respondent's father, Minister in Charge of Mineral Sector, threatening and intimidating Nakapiripirit District Local Government officials to endorse the Application for location licenses. - Applying for location licenses without Exploration licenses contrary to section 34(2) and 54(2), Mining Act. - Forgery of the Application from Atumtoak "Atumtak village". - Claiming Kamusalaba Rock when the 1st respondent applied for and obtained Location licenses for Atumtoak rock. - The 1st respondent filed the Application for Location Licenses with the assistance of Peter Lokeris in contravention of sections 9,10 and 14 of the Leadership Code Act and sections 8 and 9 of the Anti-Corruption Act. - 1st respondent did not erect Beacons or Marks out areas of the Location License contrary to regulatory areas of the Location License contrary to regulations 30, 34,54 OF SI 71/2014, mining Regulations. - 1st respondent did not pay Mineral rents and Royalties contrary to regulation 70 of Mining Regulations.

Counsel relied on the cases of **Fredrick Zaabwe vs Orient Bank**, SCCA 04 of 2006 and Takhar vs. Gracefeild Dev. Ltd (2019) UKSC.13. #### Grounds 2 and 3 jointly;

Counsel started by defining what a mineral was under Article 244(4), (5), (6) of the Constitution. Counsel argued that it was wrong for the Justices of Appeal to find that the term "commonly used for building or similar purposes" refers to only "sand and stone" because clay and murram are also used for building purposes, particularly "murram" on building roads. He submitted that the purpose of the aggregates extracted from the Kamusalaba rock for the sole purpose of building the Moroto – Nakapiripirit road which brought it under the operation of Article 244(5) and therefore excluded the granite from the definition of minerals.

Counsel submitted that the Constitutional Amendment Act, 11 of 2005 came into force on 30th September 2005, after the Mining Act, 2003 and the Mining Act could not supersede the Constitution. That whereas under Article 244(6) Parliament has the mandate to regulate exploitation of any substance used for building purposes, this mandate has not been exercised.

Counsel argued that under section 2 (1) of the Mining Act, building materials are defined to include "Rock" which is mined by a person from land lawfully occupied by him/her for road making, which clearly shows that rocks extracted for road purposes are building minerals.

Counsel submitted further that the phrase "industrial minerals" conflicts with the provisions of Article 244(5) of the Constitution, as amended, since it includes granite stone for building purposes and

that the definition of the term "mineral" in the Constitution would prevail. He added that classification of aggregate extracted from Kamusalaba Rock as an "industrial Mineral" would defeat the purposes and intent of Article 244(4), (5) and (6) and amount to absurdity as road contractors have been extracting aggregates all over the country without Mining licenses. He thus prayed the Court to allow this ground.

Counsel also submitted that section 73 of the Land Act empowers an authorized undertaker of public works to take stone or similar material from land and pay compensation to any person interested in the land for materials taken.

He contended that the appellant and Nakapiripirit District Local Government entered into a contract under section 73 of the Land Act to occupy the rock area and extract aggregates therefrom and added that in the agreement, the appellant paid a consideration of Ugx 50,000,000/= which was shared between Nakapiripirit District Local Government and Lorengedwat Sub county in the ration of 355 and 65% respectively as per the Local Government Act.

He added that the said contract being Ugx 50,000,000/, the Nakapiripirit District Local Government had power under Statutory Instrument No. 97 of 2014 (Exemption of particular contracts from the Attorney General's advice) to enter into the contract with the appellant for extraction of aggregates from Kamusalaba rock. Counsel concluded that the District Local Government had power to

enter into the said contract with the appellant and the appellant was not a trespasser at all on Kamusalaba rock.

#### Grounds 4 and 5 jointly

Counsel submitted that the trial judge in HCCS No. 16/2014 made an order that:

"the 1st defendant shall render an account of the quantity of aggregates procured from Kamusalaba Rock to the Attorney General and pay Government its monetary value within reasonable time and not later than 30 days from the date of this order."

He argued that the said order was made on 14th April 2016 and four days later, on 18th April 2016, the Solicitor General wrote to the Permanent Secretary, Ministry of Energy & Minerals as follows;

this is therefore to request that a verification be made to ascertain whether the Kamusalaba Rock is within the Government controlled area or it is in the mining area of the plaintiff and if so, who should be paid in the circumstances."

Counsel argued that the above instruction was contrary to the court order and therefore illegal. He added that indeed the above instruction is the root of the fraud that the respondents used to defraud the appellant. Counsel stated that the Solicitor Generals' letter to the Permanent Secretary was contrary to the Orders of the trial Judge in HCCS No. 16 of 2014. He argued that the pleadings

arising from the Solicitor General's letter are therefore also null and void and of no effect and that the Solicitor General's admission and the consequent judgment and orders on admission are illegal and should be set aside. Counsel relied on the cases of Makula International Ltd vs Cardinal Nsubuga & Anor, COA C/A No. 4 of 1981 and FAM International ltd vs Mohamed Hamid SCCA No.4 of 1981.

Counsel argued that the judgment and orders on admission against the appellant were made to take away its money, and that the appellant was condemned unheard.

He contended that the registrar had no powers whatsoever to enter judgement and orders under Order 50 rule 2, Civil Procedure Rules in HCSC No. 278 of 2016, Misc. App No. 700 of 2016 and Misc. Appl. No. 806 of 2016 and that all of this was an abuse of court process. He argued further that the subject matter of the cases was contested by the appellant because the money that the $1^{st}$ respondent and the $2nd$ respondent sought to take belonged to the appellant who had not only filed a notice of appeal in the Court of Appeal but had also obtained a stay of execution order against the orders in HCCS No. 16 of 2014.

Counsel relied on **Order 50 r 2** of the Civil Procedure Rules, **Attorney** General vs Kamoga & Anor, SCCA No. 08 of 2004 and NRM vs. Kampala Modernity & Printers Ltd, Misc. Appl. No. 06 of 2016.

Ground 6

Counsel submitted that the $1^{st}$ respondent did not sue for the sum of Ugx. 23,995,130,000/= and that while in their plaint, the $1^{st}$ respondent prayed for Ugx. $8,582,022,000/$ = the Permanent Secretary's Report was never presented in evidence to enable the Appellant to test it under cross examination. He further stated that Bwiire's evidence which was the basis for the claim of Ugx. 8,582,022,000/ was successfully challenged by the appellant's witness, Dr. Drake Kyalimpa and as such could not be relied upon.

Counsel argued that the Chief Government Valuer's report on which the amount of the impugned compensation was based was never brought up in evidence and was not tested in cross examination. He added that when the appellant filed Misc. Appl. No. 171 of 2017 challenging the said report, court refused to fix it for hearing. He also added that the trial judge's finding and holding in HCCS (Soroti) No. 16 of 2014, that the 1st respondent's Location Licenses Nos 1194 and 1195 did not cover Kamusalaba Rock, was never set aside and therefore the $1^{st}$ respondent had no basis to claim for the value of aggregates from Kamusalaba rock.

Counsel prayed court to allow the ground.

In conclusion, counsel prayed this court to allow the appeal, set aside Court of Appeal judgment, order a the refund of Ugx 23,995,130,000/= from the $1^{st}$ and $2^{nd}$ respondents with an interest at commercial bank lending rate of 25% per annum from the date the funds were taken until payment in full and costs in this court and the courts below.

### **First Respondent's submissions**

Counsel for the respondent kicked off his submissions with ground 2. He submitted that pursuant to **Article 241(1)** of the Constitution of Uganda, the power to deal with land does not belong to any one in Nakapiripirit District but rather, a strict preserve of the District Land Board. He explained that the Constitution does not confer upon the District Local Government power to deal with or allocate land and as such the executed agreement between the appellant and the District Local Government was unconstitutional.

Counsel further argued that the appellant's reliance on **Section 73** of the Land Act does not hold water because Nakapiripirit District Local Government was neither an owner nor occupier of the said rock land. He added that **Article 241** of the Constitution supersedes section 73 of the Land Act.

Counsel also submitted that the power to draw and peruse contracts, treaties, conventions and all documents to which government is a party or has an interest lies with the Attorney General under Article 119(4) (b) and (5) of the Constitution. He argued that Nakapiripirit District Local Government is part of Government pursuant to Article 176 of the Constitution and as such the agreement between the District and the appellant ought to have been drawn following advice by the Attorney General. He stated that the above agreement therefore violated Article 119(4) and (5) of the Constitution for lack of involvement of the Attorney General. In response to the appellant's

reliance on the case of Nsimbe Holdings vs. Attorney General, Constitutional Petition No. 02 of 2006, counsel for the respondent argued that Statutory Instrument No. 97 of 2014 provides an exemption to **Article 119(5)** for contracts involving less than Ugx 200,000,000/. Counsel lamented that the value of the contract between the Appellant and the District Administration should be seen from the perspective of the price paid by UNRA to the Appellant for the products obtained from Kamusalaba Rock which was Ugx 23,995,130,000/. He contended that it was therefore evident that the sum of Ugx 50,000,000/ paid for the rock was a mere ploy to circumvent supervision by the Attorney General. Counsel invited court to dismiss ground two for the aforementioned reasons.

#### Ground 3: Requirement for a mining license.

Counsel submitted that as submitted earlier, Nakapiripirit District Local Government has no mandate over minerals in Uganda. He added that the Justices of Appeal rightly held that the evidence of an architect, structural engineer or civil engineer was required to determine whether granite is commonly used for building but that this was never led by the appellant. He contended that therefore court rightly held that the exception in **Article 244(5)** of the Constitution was inapplicable to granite. Counsel further argued that the court referred to **Section 2** of the Mining Act, which lists granite as an industrial mineral and therefore correctly found that a mining license would be required. Counsel urged court to find the High Court case of Etot Paul Peter vs AG HCCS No. 252 of 2015 cited by the

appellant inapplicable because it did not specifically deal with granite. Counsel prayed court to disallow ground 3.

# Ground 1: Licenses were procured and held fraudulently

Counsel responded to the bulleted agreements by the appellant o this ground in the same manner as follows;

# Notice of the Appellant's agreement with Nakapiripirit,

Counsel submitted that as earlier submitted, the agreement with the District was procured in violation of the Constitution and did not confer any rights to the appellant so as to constitute any notice to the $1^{st}$ respondent. He added that the $1^{st}$ respondent's licenses were granted to it after an entity called Rhino United Agencies Ltd had surrendered part of its license to the $1^{st}$ respondent under **section** 89 of the Mining Act. He contended that the surrender on record showed that the said Rhino Agencies ltd had been granted a license over the suit property on the 23rd of February 2013, long before the Appellant started mining activities on the site and that the 1st respondent only inherited the rights of Rhino Agencies Ltd which came earlier in time to those purported by the appellant.

## Kamusalaba not held by the $1st$ respondent s director 's family under customary tenure.

Counsel submitted that the 1st respondent's claim was premised on location licenses granted to it by the Commissioner Geological Survey and Mines Department and not on customary tenure and that even if that were the case, it would not constitute fraud in the circumstances.

#### Alleged threats by the $1^{st}$ respondent's father

Counsel argued that the 1st respondent is a company without a father and that there was no evidence to show that the District government officials were threatened or intimidated into endorsing the 1st respondent's application for location licenses. He concluded that under Regulation 8 of the Mining regulations, the CAO's role in a license application does not in any way involve making decisions on the grant.

### Applying for location licenses without exploration licenses.

Counsel submitted that sections 34(2) and 54(2) of the Mining Act as relied upon by the appellant do not require one to have an exploration license prior to acquisition of a location license. He further submitted that there were no allegations of fraud pleaded in the High Court and as such the 1st respondent did not plead to the same or lead evidence in the lower courts. He argued that it would therefore be unfair to decide that case at this stage of litigation. He added that the 1st respondent was in possession of a prospecting license prior to the grant of the location license. (page 216)

#### Forgery of application from Atumtoak to Atumtok village.

Counsel argued that because this allegation was also not raised in the lower courts it would be unfair for court to decide on it now. He added that the sketch map of the area applied for by the 1st

respondent had specific coordinates which coordinates clearly described the specific area applied for by the $1^{st}$ respondent in Lorengedwat Sub county.

### Claiming Kamusalaba rock yet the 1st respondent obtained licences for Atumtoak rock.

Counsel submitted that apart from the coordinates in Lorengdwat sub county, the parties in their pleadings also agreed that Kamusalaba was within the 1st respondent's location licenses. That the appellant cannot depart from its Written Statement of Defence. Counsel referred the court to the High Court proceedings at page 608 and 609 to prove that this matter was never disputed at all.

### The $1^{st}$ respondent filed applications for licenses with the help of Hon. Peter Lokeris

Counsel submitted that there was no evidence to show that Hon Lokeris was involved in any way in the 1st respondent's application to the Commissioner Geological Survey and Mines Department for a location license. He added that the evidence of DW9 did not indicate that his decision to endorse the 1st respondent's application was influenced by Hon. Lokeris. He argued that PW1's evidence that he travelled in Hon Lokeris' car to deliver the application for endorsement at the district did not by any stretch of imagination constitute contravention of **S. 8 and 9** of the Leadership Code Act.

### 1st respondent did not erect beacons, mark stones and did not pay mineral rents and royalties

Counsel submitted that the above allegations were not raised in the lower courts and that bringing them up now would be a breach of the respondent's right to a fair hearing under **Article 28** of the Constitution as well as the principles laid down in the case of Interfreight Forwarders Ltd vs. East African Development Bank SCCA No. 33 of 1992.

Counsel prayed court to disallow the ground.

### Ground 4: Powers of the registrar to enter judgments on admission in HCCS 278 of 2016 and Misc. Appl. No. 700 and 806 of 2016;

Counsel referred to the respondent submitted that the Registrar had the power to enter judgment on admission in HCCS No. 278 of 2016 by virtue of the provisions of **O. 50 r. 1 and 2** of the Civil Procedure Rules which conferred powers on him to enter judgment in any uncontested case before him. He argued that Civil Suit No. 278 of 2016 was uncontested because the Attorney General admitted to all the claims made by the $1^{st}$ respondent. Counsel further argued that the appellant did not appeal nor apply for review the Registrar's said judgment. Counsel stated that in respect to *res judicata*, the issue before the trial judge and the Court of Appeal was substantially the same and that it related to the legality of the location licenses granted to the 1st respondent by the Ministry of Energy and Mineral Development. Counsel stated that the issue was heard and determined on its merits by Wolayo J, and therefore the appellant was estopped from bringing it up again as it was res judicata.

# Ground 5: Judge's powers to review and vary her own judgment.

Counsel submitted that Miscellaneous Application No. 876 of 2016 was brought under section 33 of the Judicature Act, O.46 of the Civil Procedure Rules and Sections 5,7,8,82 and 98 of the Civil Procedure Act. Counsel argued that the above provisions gave the learned trial judge wide ranging powers to review and vary her judgement in Civil Suit No. 16 of 2014 (Soroti High Court) 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. He contended that the learned judge was therefore justified in acting as she did.

## Ground 6: Compensation of Ugx 23,995,130,000

Counsel submitted that the trial judge's finding that Kamusalaba was not within the $1^{st}$ respondent's location license was set aside by the Court of Appeal and this was the basis for the grant of the remedies of restitution and/or special damages which were claimed in the plaint.

Counsel relied on Black's Law Dictionary, 6th Edition, which defines restitution as a body of law in which liability is not based on tort but on unjust enrichment. Counsel also quoted an article by Jeff Berryman Windsor "The Case for Restitutionary Damages over

## Punitive Damages: Teaching the Wrongdoer That Tort Does not **Pay**", which lists the ingredients of unjust enrichment as hereunder;

- a. Receipt by the defendant of a benefit. - b. A benefit at the plaintiff's expense - c. In circumstances where it would be unjust to allow the defendant to retain the benefit.

Counsel relied on the case of Hill Estate vs. Chevron Standard (1992) 83 Man. R 58 (CA) a Canadian case similar to the present case. In that case, Court of Appeal (Manitoba) Canada found Chevron Standard Ltd, which had been mining oil and gas on the suit land to be trespassers. With respect to remedies, the Court held that the Estate of William Jennings Hill was entitled to all the revenue generated by the sale of its share of minerals. Counsel submitted that there was logic and justice in disgorging profits made from commission of an unlawful act. Counsel invited court to be persuaded by the reasoning in the cited case.

Counsel submitted that in the present case, the evidence of Ronald Olaki, an official from the Uganda National Roads Authority showed that the appellant was paid Ugx 23,995,130,000/ for granite rock referred to as aggregate used to construct the Moroto – Nakapiripirit Road. He stated that the appellant extracted the product from Kamusalaba to the detriment of the 1st respondent who has a license to extract granite rock from Kamusalaba. He argued that it would therefore be unjust to allow the appellant to profit from the wrong committed against the 1st respondent and contended that the sum of Ugx 23,995,130,000/ ordered by the court to be paid to the 1st respondent constituted disgorgement of profits made from commission of a wrong against the $1^{st}$ Respondent.

### Second Respondent's submissions.

### Ground 1.

Counsel for the second respondent submitted that the Court of Appeal carefully addressed its mind to the validity of the location licenses granted to the $1^{st}$ respondent and as to whether the location licenses covered the suit rock. He argued that the licenses were not based on any claim of customary ownership and that the licenses were issued after M/s Rhino United Agencies had relinquished their rights over the portion of their license covering the suit land to the $1st$ respondent. Counsel submitted that any knowledge by the $1st$ respondent of the appellant's activities on the suit land before it acquired the licenses could not operate as an inhibition to the acquisition of a license for exploitation of the minerals because the appellant had no lawful authority to operate mining activities on the suit land. Counsel prayed court to dismiss ground one.

#### Ground $2$ and $3$ ;

Counsel submitted that granite was an industrial mineral according to the Mining Act and could only be mined upon authority of a license issued under the Act. He argued further that there was no law that mandates a local government to issue a license to any person to prospect for or mine any mineral and that as such the agreement between the appellant and the local government was illegal.

Counsel prayed this court to find that the Court of Appeal did not err when it held that the appellant required a mining license to extract granite.

### Ground 4:

Counsel submitted that court rightly found that the $2^{nd}$ respondent who was the defendant in HCCS No. 278 of 2016 had unreservedly admitted the whole of the plaintiff's claim against it. He contended that the Registrar acted within the powers conferred upon him by $0.50$ r. 1 and 2 of the CPR to enter judgements in uncontested cases.

Counsel argued that the suit was not res judicata because the $2^{nd}$ respondent was not even a party to the suit in Soroti. He stated that because the order in Civil Suit No. 16 of 2014 raised new matters that were not canvassed at all at the trial the doctrine of *res judicata* did not apply to the circumstances of the case. He prayed court to dismiss the ground.

### Ground 5:

Counsel submitted that although the ground was never raised appeal. However, the position of the law under section 82 of the CPA gives any aggrieved party a right to apply for review of a judgment to the court that passed the decree adding that that gave the learned judge a right to review her judgment at Soroti. Counsel prayed court to allow the ground.

## Ground 6:

The $2^{nd}$ respondent did not make any submissions on this ground.

## Appellant's submissions in rejoinder.

## Ground 1:

Counsel rejoined the 1st respondent's submissions as follows;

Counsel submitted that the 1st respondent acquired a prospecting license on 4th June 2013 for the area covered by the location licenses before entering into an agreement with Rhino Agencies on 12th July 2013. He contended that that was in contravention of section $21(a)$ of the Mining Act because Rhino Agencies already had an exploration license over the area since it only surrenders its rights to the 1st respondent belatedly on 13th August 2013.

## Ground 5: Power to review.

Counsel submitted that the matter before the Registrar was not contested.

## Ground 6:

Counsel clarified that the sum of Ugx. 23,995,130,000/ was given by Ronald Olaki of UNRA, PW4 as the amount stated in the bills of quantities for the contract between the appellant and UNRA. He added that that was the amount meant for contract estimates in Bills of Quantities but not the amount paid to the appellant. Counsel stated that the amount paid to the appellant could only be proved by tendering in evidence UNRA's payment certificates to the appellant,

but that such certificates were never tendered in evidence. He submitted that even certificates of payment for aggregates would include cost of the Stone Crusher, fuel for Crusher, labor, transport of the aggregates to site and other expenses.

The appellant reiterated its earlier prayers.

#### **COURT'S CONSIDERATION:**

Rule 30 (1) of the Rules of the Court provides for the power of the Court on $2^{nd}$ appeal. It provides as follows:

### "Power to reappraise evidence

Where the Court of Appeal has reversed, affirmed or varied a decision of the High Court acting in its original jurisdiction, the court may decide matters of law or mixed law and fact, but shall not have discretion to take additional evidence"

This role has been explained in a number of decisions of the Court. In **Kifamunte Henry vs. Uganda**, SCCA No. 10 of 1997 at page 12, the role was explained as follows:

"On second appeal, the Court of Appeal is precluded from questioning the finding of fact of the trial court, provided that there was evidence to support those findings though it may think it possible or even probable that it would not have itself come to the same conclusion; it can only interfere where it considers that there was no evidence to support the finding of fact, this being a question of law."

This position has been reiterated in cases like **Uganda Breweries** Limited vs. Uganda Railways Corporation, SCCA No. 6 of 2001, Lutalo Moses (Admn. of the Estate of the Late Lutalo Phoebe vs. Ojede Abdallah Bin Cona (Admn. of the Deceased Cona Bin Gulu Estates, SCCA No. 15 of 2019.

The threshold prescribed in law for the interference by the second appellate court with the findings of the first appellate Court, is that the first appellate court has to be shown to have erred in law and fact. I will bear this in mind while determining this appeal.

I wish to start with grounds $1,2$ and $3$

## Grounds $1,2$ and $3$

$\mathcal{M}^{\prime} \subset \mathcal{M}$

Issues arising out of the above grounds are;

- Whether industrial granite rock is a mineral. $i.$ - Whether the agreement between Nakapiripirit District Local ii. Government and the appellant company was valid. - Whether there was fraud by the $1^{st}$ respondent company in iii. acquiring the location licenses.

## Ground 1

## Whether granite stone is a mineral?

It was the appellant's case that granite stone is not a mineral as provided for in the Constitution whereas the respondents' case was that granite stone is a mineral as provided for by the Mining Act and therefore required one to obtain a prospecting and location license to mine the same.

Before delving into the determination of this question, Court ought to be clear on the history of regulation of the Mining industry since the coming into force of the 1995 Constitution. This will be pivotal in resolving the question which is of great importance not only to the litigants in this case but to the whole energy and mineral development industry at large.

The 1995 Constitution first pronounced itself upon matters relating to minerals under Article 244. I will reproduce the provisions therein for ease of reference.

## **Article 244 Minerals**

$\mathcal{A} \subset \mathcal{A}$

## (1)Subject to clause (2) of this article, Parliament shall make laws regulating. (a)the exploitation of minerals; (b)the sharing of royalties arising from mineral exploitation; (c) the conditions for payment of indemnities arising out of *exploitation of minerals; and* (d) the conditions regarding the restoration of derelict lands. (2) Minerals and mineral ores shall be exploited taking into account the interests of the individual land owners, local governments and the Governments.

## (3) For the purposes of this article, "mineral" does not include clay, murram, sand or any stone commonly used *for building or similar purposes.* (Emphasis mine)

The mandate of Parliament under Article 244(1) and (2) was limited to regulating the exploitation of minerals, the sharing of royalties arising from mineral exploitation, the conditions for payment of indemnities arising out of exploitation of minerals and the conditions regarding the restoration of derelict lands. Even though clause (3) set out substances that are excluded from the definition of the term "mineral", nowhere did it give Parliament the mandate to regulate the exploitation of those excluded matters. Had it been the intention of the framers of the Constitution, it would have been expressly captured therein

The Mining Act, 2003 was enacted pursuant to Article 244(1) and (2). Indeed, its long title reads as follows:

"An act to repeal the Mining Act Cap.248, with a new legislation on mining and mineral development which conforms, and otherwise gives effect, to the relevant provisions of the Constitution; to vest the ownership and control of all minerals in Uganda in the Government; to provide for the acquisition of mineral rights; and to provide for other related matters." (Emphasis mine).

The propriety of this long title is shaky. I say that because the long title included as part of its objectives the power "to vest the ownership and control of all minerals in Uganda in the **Government**" whereas it was nowhere in the parent law. Article 244 of the original 1995 Constitution, from which the Mining Act was made, did not vest ownership and control of minerals in the Government of Uganda at that time. It was silent on the matter.

This means that the vesting of ownership of minerals and control thereof in the Government of Uganda that was done in the Mining Act, 2003 was done *ultra vires* the mandate of Parliament at the time. That inconsistency in itself made the Act, void to that extent.

Be that as it may, the coming into force of the Constitution (Amendment) Act, No. 2 of 2005 on 30th September, 2005, changed the legal regime regulating the mining industry. Section 43 of the Amendment Act re-wrote the entire Article from the original 1995 Constitution. The provisions of section 43 are written hereinunder for ease of reference.

PART XIII - AMENDMENT OF CHAPTER FIFTEEN OF THE CONSTITUTION - LAND AND ENVIRONMENT

43. Replacement of article 244 of the Constitution -

For article 244 of the Constitution there is substituted the following.

(1) Subject to article 26 of this Constitution, the entire property in, and the control of, all minerals and petroleum in, on or

under, any land or waters in Uganda are vested in the Government on behalf of the Republic of Uganda.

(2) Subject to this article, Parliament shall make laws regulating -

(a) the exploitation of minerals and petroleum;

(b) the sharing of royalties arising from mineral and petroleum $% \left\vert \mathbf{r}\right\vert$ *exploitation;*

$(d)$ the conditions regarding the restoration of derelict lands.

(3) Minerals, mineral ores and petroleum shall be exploited taking into account the interest of the individual landowners, local governments and the Government.

$(4)$ In this article –

$\omega \, \propto \,$

$\mathcal{L} = \mathcal{L}$

"mineral" means any substance, other than petroleum whether in solid, liquid or gaseous form occurring naturally in or on the earth, formed by or subject to a geological process;

"petroleum" means

(a) any naturally occurring hydrocarbons, whether in gaseous, liquid or solid state;

(b) any naturally occurring mixture of hydrocarbons, whether in a gaseous, liquid or solid state; or

$\mathcal{A}^{\prime} \in$

$\mathcal{L}(\mathcal{A})$

(c) any naturally occurring mixture of one or more hydrocarbons (whether in a gaseous, liquid or solid state) and any other substances; and includes any petroleum as defined by paragraph (a), (b) or (c) that has been returned to a natural reservoir, but does not include coal, shale, or any substance that may be extracted from coal or shale.

(5) For the purposes of this article, "mineral" does not include clay, murram, sand or any stone commonly used for building or similar purposes.

## (6) Parliament may regulate the exploitation of any substance excluded from the definition of mineral under this article when exploited for commercial purposes."

The changes that were introduced under the amendment include:

- Vesting all minerals and petroleum in on or under, any land $(i)$ or waters in Uganda in the Government on behalf of the Republic of Uganda subject to the provisions of Article 26; this means the operation of article $244(1)$ in a way ratified the act of "vesting all minerals in the Government of Uganda". - Clause 244(1) of the original Article 244 became clause 2 of $(ii)$ the amended Article $244(2)$ ;

Clause 3 of the original 244 became clause 3 of the amended (iii) article 244;

$\mathcal{H}^{\prime} \rightarrow$

$\overline{r}$

- The introduction of clause 4 that was not in the original $(iv)$ Article 244. Clause 4 defines what the terms "mineral" and "petroleum" mean; - Clause 3 of the original article 244 became clause 5 of the $(v)$ amended article 244; - Finally, under clause 6, the mandate for Parliament to (vi) regulate the exploitation of any substance excluded from the definition of mineral under clause 4 when exploited for commercial purposes.

It follows therefore, that the prevailing regime relating to minerals and the mining industry is as provided for under Article 244 as amended.

The Court of Appeal in commenting about the laws governing mining in Uganda at page 16 of the judgment of Owiny Dollo, DCJ (as he then was) stated as follows:

"Pursuant to and in keeping with the provision of Article 244(6) of the Constitution above, Parliament enacted the Mining Act $2003$ , which provides in section 2 thereof a distinction thereof a distinction between building minerals and industrial minerals."

With due respect, this statement is not a true representation of the law and facts. There is a general presumption in law that Acts of

Parliament incorporate the provisions of the Constitution (parent law) from which they are enacted. Article 244(6) only came into force in 2005, pursuant to the Constitution Amendment Act, 2005, whereas the Mining Act, 2003 came into force in 2003. The Mining Act could therefore not have captured the provisions of clause (6) which was not law at the time.

$\mathcal{L} = \mathcal{L}$

Be that as it may, this does not necessarily mean that the Mining Act, 2003 is null and void in its entirety. The provisions of the Mining Act, 2003 have to be tested against the provisions of Article 244 as amended in order to establish their level of consistency. Where any provision of the Mining Act is found to be in contravention of Article 244 as amended, the Constitution being the supreme law of the land shall prevail (See Article 2(1)). Also Article 2(2) makes void any law, or custom that is inconsistent with the Constitution. It provides as follows:

> "If any other law or any custom is inconsistent with any of the provisions of this Constitution, the Constitution shall prevail and that other law or custom shall, to the extent of the inconsistency, be void."

I now wish to comment on the crucial issue of jurisdiction that arose from the manner in which the Court of Appeal resolved the two appeals.

Owiny -Dollo, DCJ, (as he then was) in applying the provisions of Article $244(5)$ to the instant facts had this to say:

$\mathcal{L} = \mathcal{L}$

"...my own construction of the phrase "commonly used for building or similar purposes" in the provision of the Constitution above, is that it refers only to "sand and or stone."

The comma punctuation appearing immediately after the word "murram" has a disjunctive effect on the sentence. It sets apart "sand and or stone" from the other substances listed before them; and for which there is no requirement to determine whether they are automatically excluded from the definition of $\mathcal{L}$ minerals. Had there been a comma appearing immediately after the word "stone" as well, it would have had a conjunctive effect on the sentence and therefore, it would have meant all the substances listed therein would only be excluded from the definition of minerals if they are "commonly used for building or similar purposes." It is therefore only with regard to "sand and or stone" that there is a requirement to establish first that $\mathcal{L}$ such category of "sand and or stone" are "commonly used for building or similar purposes," before they are excluded from the **definition of minerals."** (Emphasis added)

There was an attempt by the Court of Appeal to interpret Article 244 (5) of the Constitution albeit unsuccessfully. The evidence of this can be found in the underlined text.

For instance, the phrase "my construction of the phrase commonly used for building or similar purposes", "The comma punctuation appearing immediately after the word "murram" has a disjunctive effect on the sentence." $Etc$ .

The literal rule of interpretation was used. Suffice it to note that the matters before the Court of Appeal were civil appeals vide CACA Nos. 52 & 88 of 2017. They were never filed as constitutional matters requiring constitutional interpretation. The act of interpreting the Constitution by the Court of Appeal was therefore, contrary to the provisions of Article 137. The mandate to interpret the Constitution is a preserve of the Constitutional Court under Article 137 (1). It reads:

## "Any question as to the interpretation of this Constitution $\mathcal{L}$ shall be determined by the Court of Appeal sitting as the Constitutional Court."

The constitution (Coram) of the Constitutional Court is also provided for under clause 2 of the same Article.

## "When sitting as a Constitutional Court, the Court of Appeal shall consist of a bench of five members of the Court."

The record shows that the Court of Appeal was not sitting as the Constitutional Court and quorum that determined the appeal was constituted by 3 members namely, Owiny-Dollo, DCJ, Cheborion Barishaki & Tuhaise, JJA. This went against the provisions of Article $137(1)$ and (3).

Even if the number of members on the Coram had been 5, the procedure prescribed under the Constitution for dealing with questions of Constitutional interpretation that arise during any court proceedings other than in a Field Court Martial under Article 137(5) were not complied with.

Article 137 (5) reads as follows:

$\mathcal{L}^{\mathcal{L}}$

"Where any question as to the interpretation of this Constitution arises in any proceedings in a court of law other than a field court martial, the court -

May if it is of the opinion that the question involves a $(a)$ substantial question of law: and

Shall, if any party to the proceedings requests it to do $(b)$ so, refer the question to the constitutional court for decision in accordance with clause (1) of this article. (Emphasis mine)

If the Court of Appeal was of the opinion that the question involved a substantial question of law, it should have referred the matter to the Constitutional Court and halted the appeal proceedings pending the determination of the question of law. But it did not.

This means that the Court of Appeal acted outside its jurisdiction. In the case of Attorney General vs. Tinyefuza, SCCA No. 1 of 1997, the term jurisdiction was defined to mean:

$\overline{I}$

"...the authority of which a court has to decide whether matters that are litigated before it or to take cognizance of matters of matters presented in a formal way for its decision. The limits of this authority are imposed by statute, charter or commission under which the court is constituted and may be extended or restricted by the like means..."

Jurisdiction is everything and without it the proceedings are of no consequence. Having acted without jurisdiction, the decision of the Court of Appeal regarding issues that arose from the illegal interpretation of Article 244(5) is a nullity due to lack of jurisdiction.

The aforementioned errors by the Court of Appeal place this appeal within this Court's power as the second appellate court to interfere with the findings of the first appellate court. (See **Uganda Breweries** Ltd vs. Uganda Railways Corporation (supra).

I will now proceed to determine the core question as to whether the suit rock granite is a mineral.

The term "mineral" is defined under Article 244(4) as amended to mean:

"...any substance, other than petroleum, whether in solid, liquid or gaseous form occurring naturally in or on the earth, formed by or subject to a geological process."

Article $244(5)$ goes further to set out what is excluded from the definition of the term "mineral". It provides that:

$\mathcal{L}$

### "For the purposes of this article, "mineral" does not include clay, murram, sand or any stone commonly used for building or similar purposes."

Under Article 244(6) Parliament is mandated to regulate the exploitation of substances excluded from the definition of the term "mineral" when exploited for commercial purposes.

Concerning the nature of the suit rock, the Court of Appeal made the following observations:

"However, Article 244(6) of the Constitution mandates Parliament ..."

"To my understanding, this provision means the substances that are excluded from the definition of minerals, under the provision of the Constitution above, may never the less be classified by Parliament as minerals when they are exploited for commercial purposes. Pursuant to and in keeping with the provision of Article 244(6) of the Constitution above, Parliament enacted the Mining Act of 2003, which provides in section 2 thereof a distinction between building materials and industrial minerals. Building materials are classified therein. They are

classified as building materials under the Act, when they are mined by a person from land owned or lawfully occupied by such person; and for such person for domestic use in Uganda for building. They are equally so classified when they are mined by any person for his or her own use for road making.

Industrial minerals on the other hand are also listed in the Act; and include granite. These fit the classification as minerals when commercially mined by a person for use in Uganda or industrially processed into finished or semi-finished products. Some of these materials are noticeably classified under both building materials, and industrial minerals. These include rock, clay, gravel, laterite, sand, sand stone and slate. Granite is however, classified under industrial minerals only." (Emphasis mine)

With due respect to the learned Justices of Appeal, the Mining Act, 2003 was never intended to regulate substances excluded from the definition of mineral. (See Article 244(1) of 1995 Constitution and the long title to the Act).

Secondly, the Mining Act, 2003 came into force approximately 2 years before the Constitution (Amendment) Act, 2005 under which clause 244(6) was introduced. The amendment did not act retrospectively.

Counsel for the appellant company rightly submitted that the mandate given to Parliament under Article 244(6) is yet to be exercised and that therefore there is a lacuna in the law regarding regulation of the exploitation of substances excluded from the definition of mineral. This is the prevailing position of the law.

In accordance with Article 2(2) of the Constitution, the provisions of the Mining Act such as section 2 that define building mineral and industrial mineral and also purport to regulate the excluded substances from the definition of mineral are void because of their inconsistency with the provisions of Article 244 as amended. It was therefore, an error on the part of the Court of Appeal to apply the definitions of the terms "building mineral" and "industrial mineral" from section 2 of the Mining Act in its determination of the question of "whether granite stone was a mineral".

I find that the correct threshold to determine this question is found in Article 244(4) and (5). Substances such as clay, murram, sand or any stone commonly used for building or similar purposes are excepted as industrial minerals.

It was argued by counsel for the appellant company that Kamusalaba rock was excavated and crushed into aggregates for the tarmacking of the Moroto- Nakapiripirit road which brought it under the operation of Article 244(5) and that it therefore fell within the ambit of excluded substances from the definition of mineral. I agree with this submission.

The purpose for which the rock was excavated has never been in issue. All the parties concede to this purpose. The respondents' main arguments were based on the definitions of "building mineral" and

"industrial mineral" under section 2 of the Mining Act. This I found earlier on to be inconsistent with Article 244 as amended.

I am therefore, inclined to find that since the rocks or granite excavated from Kamusalaba rock fall within the threshold of "commonly used for building or similar purposes" and in this case construction of the road, a reality to which all parties agree, the granite stone therefrom was not a mineral.

This ground therefore succeeds.

#### Ground 2

## Whether the agreement between Nakapiripirit District Local Government and the appellant company was valid.

It was an agreed fact that the suit land / rock did not belong to any person in Nakapiripirit. The power to hold and allocate such lands in every district vests in the District Land Board as prescribed under Article 241(1). That provision reads:

# 1. The functions of a District Land Board are;

## a. to hold and allocate land in the district which is not owned by any person or authority;

b. to facilitate the registration and transfer of interests in land; and

c. to deal with all other matters connected with land in the district in accordance with laws made by Parliament. The above article should be read together with sections 59 and 60 of the Land Act which provide as follows:

#### Section 59. Functions of a board.

(1) The functions of a board shall be to—

(a) hold and allocate land in the district which is not owned by any person or authority;

(b) facilitate the registration and transfer of interests in land:

(c) take over the role and exercise the powers of the lessor in the case of a lease granted by a former controlling authority......"

**Section 60(1)** of the Land Act reiterates the provisions of Article 241(4). **Section 60 (2) (c)** (supra) permits the District Land Board to sell, lease or otherwise deal with the land held by it.

These functions were further explained in the case of **Lutalo Moses** (Administrator to the estate of Phoebe Lutalo) vs. Ojede Abdallah Bin Cona (Administrator to the estate of Cona) (supra) wherein this Court relied on its decision in the case of **Kampala City Council** Authority & Another vs. National Housing and Construction **Corporation** SCCA No. 2 of 2004 where the same question came up. The Court stated as follows:

"The functions of a District Land Board included holding and allocation of land in a district which is not owned by any person, and to facilitate the registration and transfer of interests in land. It seems to me, therefore, that the District Land Boards became successors in title to controlling authorities or urban authorities in respect of public land which had not been granted or alienated to any person or authority. The District Land Boards became successors by operation of law because land was vested in them by law, not by grant, transfer or registration, under Section 59(8) of Land Act." (Emphasis mine)

The $2nd$ respondent rightly submitted that neither the provisions of Article 241 nor those of sections 59 and 60 of the Land Act granted any rights or jurisdiction to the District Local Government to enter into contracts for allocation of Land that does not belong to any person even on behalf of the land board.

The facts at hand show that the agreement being relied on by the appellant company was signed by Nakapiripirit District Local Government which referred to itself as the owner of the suit land and that it was in that capacity that they hired out the suit rock to the appellant company to excavate the granite aggregates.

Nakapiripirit District Local Government clearly lacked the capacity to contract or enter into any agreement on behalf of any legal entity and therefore, the agreement was void *ab initio* as it contravened the provisions of the Constitution and the Land Act. The rightful entity to transact on behalf of the District was and still is Nakapiripirit District Land Board.

Ground 2 must fail.

$\mathcal{H} = \mathcal{H}$

### Ground 3

## Whether there was fraud by the $1st$ respondent company in acquiring the location licenses.

Having found that the suit rock was not a mineral, and that the Mining Act did not apply to it, I find that matters regarding the process of obtaining location licenses are bound to collapse.

This ground must therefore, fail.

### Grounds 4 and 5:

The resolution of Ground 1 has the effect of disposing of these two grounds. However, because of various procedural improprieties that unfolded in the handling of these cases, the Court is inclined to offer guidance on the same.

$4.$ The learned Justices of Appeal erred in law when they held that the Registrar had power to enter the impugned judgments on admission in HCCS No. 278 of 2016 and Misc. Apps. Nos. 700 of 2016 and 806 of 2016.

$$ The learned Justices of Appeal erred in law when they held that the learned judge in Misc. Appl. No. 876 of 2016 had power to review and vary her judgment in HCCS (Soroti) No. 16 of 2014 and dismissed the Appeals with costs, and allowed the 1st respondent's Cross-Appeal with costs and issued a Permanent injunction against the Appellant.

It was the appellant's case that the letters that were exchanged between the Solicitor General and the Permanent Secretary, Ministry

$\mathcal{L}^{\mathcal{A}}$

of Energy and Mineral Development, that formed the basis of the suit in High Court, Kampala vide HCCS No. 278 of 2018, the plaint therein, the Attorney General's admissions in the Written Statement of Defence and all orders thereunder were illegal and ought to be set aside for having varied the court order in HCCS No. 16 of 2014.

Counsel for the appellant also argued that the Registrar, High Court Civil Division had no jurisdiction to handle a case that was contentious.

The respondents on the other hand argued that Miscellaneous Application No. 876 of 2016 was brought under s. 33 of the Judicature Act, O. 46 of the CPR, sections 5, 7, 8, 82, 98 of the CPA and accordingly the Registrar had powers to review and vary her judgment to finally settle all matters in controversy between the

The arguments by both counsel give rise to the following sub issues, resolution of which, should settle all controversies regarding grounds $4$ and $5$ :

- i. Whether the matters raised in HCCS No. 278 of 2016 at the High Court in Kampala handled were res judicata? - What is the effect of such review or variance? $\mathbf{ii}$ - Whether Wolayo J, could lawful preside over a matter in High iii. Court, Kampala that involved matters and questions she substantially determined while presiding over HCCS No.16 of 2014 in High Court, Soroti.

# Whether the issues in HCCS No. 278 of 2016 at Kampala was $res$ judicata.

The Common law concept of res judicata covers two distinct concepts which are "cause of action estoppel" and "issue estoppel". A plea or defence based on cause of action estoppel, if accepted, prevents a party pursuing a claim which has already been determined by a court of competent jurisdiction in previous litigation between the same parties (or their privies). (See: Spencer Bower & Handley, Res **Judicata**, 4th Edition (2009) (1).

The rationale for **Res Judicata** was discussed in **Halsbury's laws of England,** Volume 12 (2009) 5th Edition. It was stated that;

"The law discourages re-litigation of the same issues except by means of an appeal. It is not in the interest of justice that there should be re-trial of a case which has already been decided by $\mathcal{L}$ another court, leading to the possibility of conflicting judicial decisions, or that there should be collateral challenges to judicial decisions; there is a danger not only of unfairness to the parties concerned, but also of bringing the administration of justice into disrepute" (Emphasis mine).

From the foregoing, re-litigation of matters based on the same cause of action and issues except on appeal is barred in law.

In Uganda, Res judicata is captured under Section 7 of the Civil Procedure Act which provides as follows:

"No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try the subsequent suit or the suit in which the issue has been subsequently raised, and has been heard and finally decided by that court."

- 2

$\mathcal{K}$

The application of this provision was discussed in the case of Mansukhal Ramji Karia & Anor vs. Attorney General and 2 others, SCCA No. 20 of 2002. The Court stated as follows:

"The provision indicates that the following broad minimum conditions have to be satisfied:

There have to be a former suit or suit issue decided $(1)$ by a competent Court.

The matter in dispute in the former suit between $(2)$ parties must also be directly or substantially in dispute between the parties in the suit where the doctrine is pleaded as a bar.

That the parties in the former suit should be the same $(3)$ parties, or parties under whom they or any of them claim litigating under the same title.

The aforementioned decision is still good law and in accordance with the doctrine of *stare decisis*, I am bound to follow it.

The facts at hand show that there was a former suit between the $1^{st}$ respondent and the appellant in HCCS No. 16 of 2014, Welt Machinen Engineering Ltd vs. China Road & Bridge Corporation, Ilukol Jobs Lomenen & Nakapiripirit District Local Government, in which the issue of ownership of the suit rock was determined to be the Government of Uganda. This brought the $2^{nd}$ respondent on board as decree holder.

Specifically, the 1st respondent sued the appellant company for, among others, a permanent injunction restraining it and its agents from excavating the suit rock, a declaration that the appellant company and its co- defendants had no legally recognized rights to extract/mine granite stones from the suit land, an order of eviction, etc. One of the issues that were agreed to by all parties was "whether the $1st$ defendant is trespassing or infringing on the plaintiff's rights?"

In determining this issue, Wolayo J, found as follows:

"The defendants and third party were categorical that the $1^{\rm st}$ defendant operates in Kamusalaba rock area while the plaintiff's area of operation is Atumtoak rock. This means that the $1^{\rm st}$ defendant has not infringed on the mineral rights of the plaintiff at all. The second issue is resolved in the negative."

Her Lordship went on to state:

$\bar{z} \propto$

"Having found that the $1^{st}$ defendant was not licensed to mine Kamusalaba Rock, in the interests of justice, I make the following orders.

$\mathcal{L}^{\mathcal{L}}\rightarrow\infty$

$\mathcal{L} = \mathcal{L}$

The $1^{st}$ defendant shall render an account of the quantity of aggregates procured from Kamusalaba rock to the Attorney General and pay the Government its monetary value within reasonable time and not later than 30 days from the date of this order"

The above quotations clearly indicate that though Wolayo J, had erred when she determined that granite was a mineral, she resolved the question of ownership of the suit rock based on the said resolution.

In the circumstances it goes beyond my comprehension why the Solicitor General would write to the Permanent Secretary of the Ministry of Energy and Mineral Development exactly 4 days after the delivery of the judgment in HCCS No. 16 of 2014 seeking verification of the ownership of suit rock, which the High Court at Soroti had already pronounced itself on. For ease of reference I shall reproduce the letter of the Solicitor General hereunder;

"RE; JUDGMENT IN HIGH COURT SOROTI IN CIVIL SUIT NO. 16 OF 2014, WELT MACHINEN ENGINEERING LTD VS CHINA ROAD AND BRIDGE CORPORATION, ILLUKOL JOBS LOMENEN AND NAKAPIRIPIRITI DISTRICT LOCAL GOVERNMENT/THIRD PARTY.

"Reference is made to the above quoted case whereby the High Court in Soroti made a judgment in which among other orders the judge said that:

The defendant shall render an account of the quantity of $(1)$ aggregates procured from Kamusalaba rock to the Attorney General and pay the Government its monetary value within reasonable time and not later than 30 days from the date of this order.

This is therefore to request that a verification be made to ascertain whether the Kamusalaba rock is within the Government controlled area or it is in the mining area of the plaintiff and if so who should be paid in the circumstances."

The justification for the aforementioned letter was set out in **Denis** Bireije's affidavit in reply to HC Misc. Appl. No 876 of 2016, China Road and Bridge Corporation vs. Welt Machinen Engineering **Limited & Attorney General,** in which the appellant company challenged the propriety of the proceedings in the High Court at Kampala. He averred *inter alia* as follows:

"13. THAT the Court found as well that the actions of the Applicant herein, having been unlawful and in contravention of the provisions of the Mining Act, the Applicant herein was ordered to render an account to the Attorney General of all the granite unlawfully mined by itself and to pay to the Government of Uganda the full monetary value of all the granite within a

reasonable time but in any event not later than 30 days from the date of the judgment- $14$ th April 2016.

$\mathcal{L}$

14. THAT the Applicant herein made no effort whatsoever to contact the Attorney General's office for the purpose of complying with the orders of Court in HCCS No. 16 of 2014 and all efforts by the Attorney General to reach the Applicant were in vain.

15. THAT having waited in vain for the Applicant to contact the Attorney General, I wrote to the Ministry of Energy and Mineral Development seeking their guidance on the matter and in particular as regards the quantities of granite unlawfully mined by the applicant and area from where the said granite was mined.

16. THAT in the discussion with the then Ag. Attorney General and the AG. Commissioner Litigation, we noticed that the Court was not certain as to the exact area where the granite was mined from and reached the conclusion that it was not provided with sufficient evidence to reach a conclusive finding on the point."

17. THAT in view of our opinion in 17 above, we decided to seek the guidance of the Ministry of Energy and Mineral Development on this point so that we ascertain with clarity the quantities and area of the unlawful activity of the Applicant. (sic) (Emphasis mine).

It seems clear to me that Denis Bireije who signed on behalf of the Solicitor General was not happy with Wolayo, J's finding on the ownership of the suit rock and the orders that required the appellant company to render an account of the aggregate unlawfully mined and pay the monetary equivalent of the same to the Attorney General.

He therefore decided to get a contrary view from the Permanent Secretary of the Ministry of Energy and Mineral Development. There is no known legal justification for proceeding this way. The office of the Attorney General should have known better because proceeding in disobedience of the judgment and orders of the court in HCCS No. 16 of 2014 is in itself contempt of court.

The letter that formed the foundation of the 1st respondent's claim in HCCS No. 278 of 2016 was in response to the Solicitor General's letter. It read, *inter alia*, as follows:

"Without prejudice to the foregoing and in light of the judgment in HCCS No. 16 of 2014, Welt Engineering Machinen ltd vs China Road and Bridge Corporation & others, key findings of the verification reports are as follows:

Part of the Kamusalaba rock falls within the area covered 1. by LL 1194 currently held by WELT MACHINEN ENGINEERING $LTD.$

The quarry that was used to mine granite / granite gneiss $\boldsymbol{2.}$ covers part the area covered by LL 1194. 3. The location license holder is, therefore, entitled to full compensation and the value of granite / granite gneiss that was *mined from its licensed area...*" (Emphasis mine)

The contents of the aforesaid letter had the effect of varying the determination of the court in HCCS No. 16 of 2014 regarding ownership of the suit rock. Whereas the court had determined that the suit rock fell outside the licensed area of the 1st respondent, that the suit rock vested in the Government of Uganda and that the Attorney General was the decree holder in the suit, the letter stated instead that the 1st respondent was the owner of the suit rock and therefore entitled to be paid the proceeds of the same.

It is this altered ownership that formed the foundation for the claim of unjust enrichment based on the orders of court in HCCS No. 16 of 2014.

The path taken by the Attorney General's Office opened floodgates for more illegal proceedings after illegal proceedings i.e. HCCS No. 278 of 2016, Misc. Appl. No. 700 of 2016, Misc. Appl. No. 806 of 2016, Misc. Appl. No. 876 of 2016 e.t.c.

Such conduct is highly discouraged. The sanctity of a judgment is utmost and may only be varied by an appellate court, reviewed by the same court that issued an order or under an application for correction of errors under the slip rule and this would apply only in circumstances where the alterations in the judgment fit the court's intention at the time of delivery of the judgment /order. See; **Bulasiyo Kkonde vs. Buladina Nankya & Anor**, Civil Appeal No. 07 of 1980, SINBA (K) LTD & 4 Ors vs. Uganda Broadcasting Corporation, SCCA No. 3 of 2014[2015], Attorney General vs. Bumero Estates **Limited**, SC Civil Appl. No. 25 of 2019, [arising from SCCA No. 13 of $2007.)$

The Court of Appeal in finding that the matters and issues traversed in HCCS No. 278 of 2016 were not res judicata stated as follows:

"......... Counsel for appellant submitted that the matters raised in HCCS No. 278 of 2016 were res judicata as they were directly and substantially in HCCS No. 16 of 2014. I disagree. First, the relevant part of the suit in Soroti for the purposes of this issue, is that the 2nd respondent who was the defendant in Kampala was not party to the HCCS No. 16 of 2014 at Soroti. Secondly, the subject matter of the dispute in HCCS No. 16 of 2014 was mainly the determination of the status of granite as a mineral or not, and the legality of the location licenses issued to the 1st respondent. It was the finding of the trial judge therein that the appellant must pay the value of the granite stones it had extracted, that gave rise to the involvement of the 2nd respondent."

The Court of Appeal further stated that:

"This order, therefore, raised matters that had neither been pleaded nor brought in evidence, or canvassed at the trial. It was open to the 1st respondent to either appeal against that order as indeed it did in cross appeal to Civil

Appeal No. 52 of 2017 of this court and the court pronounced itself on it, or to bring a fresh suit challenging the award to the 2nd respondent as amounting to unjust enrichment. It chose the latter. The doctrine of res judicata does not at all apply in the circumstance of the case. The suit was well founded against the 2nd respondent...".

With due respect to the learned Justices of Appeal, I disagree with this finding. Firstly, the question of ownership of the suit rock was as central in the proceedings of HCCS No. 16 of 2014 as was the determination of whether the suit rock was a mineral and the Court pronounced itself on the same. Secondly, although the Attorney General, 2nd respondent, was not a party in the HCCS No.16 of 2014, the Court having found that the suit rock belonged to none of the parties in that case, the Court made the Attorney General the decree holder as the office responsible for all matters vested in the Government of Uganda. So he became a party to HCCS No. 16 of 2014 as the decree holder.

Thirdly, the 1st respondent's case in HCCS No. 278 of 2016 is indicative of the fact that the 1st respondent sought to re-litigate the issue of ownership that had already been determined by the Court in HCCS No. 16 of 2014.

The 1st respondent's plaint (statement of claim) in HCCS No. 278 of 2016 read *inter alia* as follows:

### 4. The facts constituting the cause of action are as follows;

c) The plaintiff brought a claim against the said company in $\mathcal{L}$ Soroti High Court Civil Suit No. 16 of 2014 for loss of business and business opportunity, special and exemplary damages and general damages for the said trespass and illegal mining upon the plaintiff's designated mining area.

d) Judgment was duly entered against the said company on 14th April 2016 and the court, inter alia, ordered that commercial value of all the granite mined from the said area be paid to the defendant herein instead.

e) The defendant subsequently and in execution of the said orders of court, sought guidance from the Ministry of Energy and Mineral Development as to the quantities and value of the granite mined from the area by the said China Road $\texttt{\&}$ Bridge Corporation.

f) In response to the request inquiry by the defendant, the Ministry of Energy and Mineral Development dispatched a team of experts to ascertain the same.

g) The said experts produced a report that conclusively confirmed the plaintiff's assertion and claim that granite was mined by China Road and Bridge Corporation from location license Area LL1194 belonging to the plaintiff.

h) The Permanent Secretary in the ministry of energy and mineral development, subsequently and correctly so advised the commercial value of all the granite mind form location

# license area Number LL1194 should be lawfully and properly paid to the Plaintiff as the license holder. (Emphasis mine)

In the same vein, $1^{st}$ respondent's (then plaintiff) summary of evidence read as follows;

"the plaintiff shall by oral and documentary evidence to show and prove that at all material times, from the 16th of August to date, the plaintiff was the lawful holder of a mining license in respect of location license area number LL1194 in Nakapiripirit District.

The Plaintiff shall further prove that the China Road unlawfully mined granite from its said location license area and that any compensation for the wrongful and unlawful actions of the said china road is due and payable to the Plaintiff.

It shall be the plaintiff's evidence that the relevant and responsible mining authorities / departments of government have unambiguously advised that the monetary value of all the granite unlawfully mined from the Location License Area is due and payable to the plaintiff. (Emphasis mine)

The issue of ownership of the suit rock formed the gist of 1st respondent's claim in HCCS No. 16 of 2014.

In fact, to support the 1st respondent's claim of ownership, the Attorney General had to relinquish ownership of its decreed right in

its Written Statement of Defence in order to support the 1st respondent's claim of unjust enrichment.

The Written Statement of Defence filed by the Attorney General read. *inter alia*, as follows:

"4. In further reliance upon the information and clarification rendered to the defendant by the Ministry of Energy and Mineral Development and the Defendant's own appreciation of the interpretation and practical application of the provisions of the Mining Act, the Defendant admits the plaintiff's claims.

5. If as the Plaintiff asserts, they are the lawful holders of the Mining License Number LL1194, a fact confirmed by the Ministry of Energy and Mineral Development, and which is not denied by the Defendant, the Defendant admits the plaintiff's claims.

6. In answer to the Plaintiff prayer (v) the defendant states that based on the information and guidance of the Ministry of Energy and Mineral Development, the amount due and payable in respect of compensation for granite unlawfully mined from Location License Area LL1194 IS Ugx=35,768,678,999=."

The aforementioned clearly shows that the $1^{st}$ respondent's claim in HCCS No. 278 of 2016, that was baptized "a claim for unjust enrichment" had its foundation in the same subject matter, same cause of action, same issues that were crafted by the $1st$ respondent and $2nd$ respondent to surreptitiously sneak into court with a fresh

suit in order to circumvent the provisions of section 7 of the Civil Procedure Act.

I adopt the observations of the Court of Appeal in the case of Boutique Shazim Ltd vs. Norattan Bhatia & another CA No. 36 of 2007 in which the court observed that:

"Essentially the test to be applied by court to determine the question of res judicata is this; 'is the plaintiff in the second suit or subsequent action trying to bring before the court, in another way and in the form of a new cause of action which he or she has already put before a court of competent jurisdiction in earlier proceedings and which has been adjudicated upon? If the answer is in the affirmative, the plea of res judicata applies not only to points upon which the first court was actually required to adjudicate but to every point which belongs to the subject matter of litigation and which the parties or their privies exercising reasonable diligence might have brought forward at the same time." (Emphasis added)

I am therefore, inclined to find that the matters of ownership and monetary value of granite that had already been determined in HCCS No. 16 of 2014 were *res judicata* and could not be re-litigated in HCCS No. 278 of 2016. This means that all the proceedings in HCCS No. 278, and all the miscellaneous applications therein were void in law. The final impropriety I wish to address is the act of Wolayo J, handling the matters in High Court, Kampala vide HC Misc. Appl. No. 876 of 2016 that arose from HCCS No. 278 of 2016, which substantially involved questions she determined as the presiding judge in HCCS No. 16 of 2014. This impropriety has two limbs.

First, that the High Court of Uganda has unlimited original jurisdiction in a matter and other matters substantially incidental thereto. Second, that Wolayo J, could not in law purport to handle an application to set aside and review a decision of the High Court, Kampala between the same parties involving substantially the same question she had determined in a former suit in High Court, Soroti.

The exercise of judicial power must be in conformity with the laws as provided for under Article $126(1)$ .

The jurisdiction of the High Court is provided for under Article 139. It reads as follows:

#### 139. Jurisdiction of the High Court.

(1) The High Court shall, subject to the provisions of the Constitution, have unlimited original jurisdiction in all matters and such appellate and other jurisdiction as may be conferred **on it by this Constitution or other law.** (Emphasis mine)

Wolayo J, having presided over the proceedings in the High Court of Uganda at Soroti, HCCS No. 16 of 2014, as the court of original jurisdiction, the same matters could not be entertained in the High Court situated in any other area.

Review as provided for under section 82 of the Civil Procedure Act is to be done by the Court that passed the decree sought to be reviewed.

The jurisdiction to review that judgment was vested in the High Court of Uganda at Soroti and not in the person who presided over the case.

The judicial office is a creature of the Constitution that should be separated from the individuals that hold the office. Suffice it to say the judicial office is not personal to holder. Wolayo J, merely constituted the High Court of Uganda at Soroti for the time she was deployed there and could not purport to have left with the office when she was transferred to the High Court in Kampala. It was therefore, an error for Wolayo J, to preside over an application for review and to set aside the proceedings and orders of the High Court of Uganda at Kampala when she was already *functus officio*.

#### Ground 6:

## The learned Justices of Appeal erred in law when they held that the appellant should pay compensation of Ugx $23,995,130,000/=$ to the $1^{st}$ respondent.

Having held in grounds 1,2 and 3, that the suit rock is not a mineral, that Nakapiripirit District Local Government had no capacity to enter into the said agreement on behalf of the District and that there was no need for the acquisition of a mining license, respectively, it follows that none of the parties to the suit are entitled to compensation for the excavated aggregates.

The rightful entity to receive the compensation pursuant to Article 241 and sections 59 and 60 of the Land Act is the Nakapiripirit District Land Board.

I am therefore inclined to find that the Justices of Appeal erred when they held that compensation of Ugx. 23,995,130,000/ $=$ should be paid to the 1st respondent.

I will now proceed to determine the quantum of compensation due to Nakapiripirit District Land Board.

The monetary value of the aggregate that was presented to the High Court of Uganda in a Valuation Report made by the Chief Government Valuer cannot be relied upon because it was ordered by a court that lacked jurisdiction and therefore the proceedings thereunder were of no consequence.

The valuation of the excavated aggregate can only be found in Procurement Ref: No: UNRA /Works/09/10/00001/18/01 UNRA ID No: 142 Volume 5: Priced Bill of Quantities which formed part of the Contract for Works for Moroto Nakapiripirit Road. The Priced Bill of Quantities placed the cost of granite stones to be used in the Construction at Ugx. 23,995,130,000/=.

This evidence was presented in the proceedings of HCCS No.16 of 2014. All these monies were paid to the 1st respondent pursuant to the decision of the Court of Appeal.

That money ought to be paid to Nakapiripirit District Land Board, the constitutionally sanctioned entity to hold, allocate, sell as well as lease the suit rock. Conceding to the 1st respondent's holding the money would amount to unjust enrichment.

The appeal succeeds in part.

In the result, I make the following declarations and orders;

Granite stone is not a mineral but a stone commonly used for $\mathbf{1}$ building purposes.

The Mining Act does not apply to substances excluded from the $2.$ definition of a mineral in the Constitution.

The location licenses No. LL1194 and LL1195 held by the 1st $3.$ respondent were null and void.

The rightful entity to hold and allocate land not owned by any 4. person in Nakapiripirit District is the Nakapiripirit District Land Board.

The 1st respondent should pay a sum of Uganda Shillings $5.$ $23,995,130,000/$ = (Twenty-three billion, nine hundred ninety-five million, one hundred thirty thousand) to Nakapiripirit District Land Board within 60 days from the date of this order, being the value of the granite stone that was wrongfully exploited from the Kamusalaba rock by the appellant company.

6. Parliament may pass a law to regulate the exploitation of any substance excluded from the definition of mineral when exploited for commercial purposes in accordance with Article 244(6)

7. Each party shall bear their own costs.

Dated at Kampala this .................................... brunenf.....2022

Mike J. Chibita JUSTICE OF THE SUPREME COURT

selmered ## THE REPUBLIC OF UGANDA

### IN THE SUPREME COURT OF UGANDA AT KAMPALA

Coram: Arach-Amoko, Mwondha, Mugamba, Muhanguzi, Chibita, JJ. SC

## **CONSOLIDATED CIVIL APPEALS NO. 13 & 14 OF 2019**

CHINA ROAD & BRIDGE CORPORATION ....................................

### **VERSUS**

WELT MACHINEN ENGINEERING LTD....................................

### AND

CHINA ROAD & BRIDGE CORPORATION....................................

### **VERSUS**

## WELT MACHINEN ENGINEERING LTD

ATTORNEY GENERAL............ RESPONDENTS

(Appeal from the decision of the Court of Appeal of Uganda at Kampala in Civil Appeals Nos. 52 of 2017 and 88 of 2018 before Hon. Justices A. C Owiny-Dollo, DCJ, *Cheborion, Tuhaise, JJA dated 21st June 2019)*

## JUDGMENT OF MUHANGUZI, JSC

I have had the benefit of reading in draft the lead judgment of my learned brother Hon. Justice Mike Chibita, JSC. I agree with his analysis and conclusion that this appeal succeeds in part. I also agree with the declarations and orders made.

Dated at Kampala this $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$ day of $\ldots$

EZEKIEL MUHANGUZI JUSTICE OF THE SUPREME COURT

### THE REPUBLIC OF UGANDA

# IN THE SUPREME COURT OF UGANDA AT KAMPALA

# **CONSOLIDATED CIVIL APPEALS NO. 13 & 14 OF 2019**

## **CHINA ROAD & BRIDGE CORPORATION: APPELLANT**

### **VERSUS**

## WELT MACHINEN ENGINEERING LIMITED: RESPONDENT

#### AND

## **CHINA ROAD & BRIDGE CORPORATION: APPELLANT**

#### **VERSUS**

# 1. WELT MACHINEN ENGINEERING LIMITED: RESPONDENTS 2. ATTORNEY GENERAL

## (CORAM: ARACH-AMOKO; MWONDHA; MUGAMBA; MUHANGUZI; CHIBITA, JJSC.)

### JUDGMENT OF PAUL MUGAMBA, JSC

I have had the benefit of reading in draft the judgment of my learned brother Justice Mike Chibita, JSC. I agree with the reasoning, conclusion and orders proposed.

Dated at Kampala this $\frac{1}{2021}$

$\overbrace{\hspace{1.5cm}}$

Hon. Justice Paul Mugamba

**JUSTICE OF THE SUPREME COURT**

#### THE REPUBLIC OF UGANDA

### IN THE SUPREME COURT OF UGANDA AT KAMPALA

CORAM: Arach-Amoko, Mwondha, Mugamba, Muhanguzi, Tuhaise, Chibita, JJSC

### CONSOLIDATED CIVIL APPEALINO. 13 & 14 OF 2019

#### **BETWEEN**

<table>

CHINA ROAD & BRIDGE CORPORATION .................................... **VERSUS** WELT MACHINEN ENGINEERING LIMITED ....................................

**AND**

<table>

CHINA ROAD & BRIDGE CORPORATION APPELLANT

**VERSUS**

(1) WELT MACHINEN ENGINEERING LIMITED <table>

.................................... (2) ATTORNEY GENERAL

#### **JUDGMENT OF MWONDHA JSC**

I have had the benefit of reading in draft the Judgment of my learned brother Hon. Justice Mike Chibita JSC. I concur with his reasoning and decision that this appeal succeeds in part.

I also agree with the declarations and orders as proposed by the Learned Justice.

Justice. Dated at Kampala this ....................................

monde 10 Mwondha JUSTICE OF THE SUPREME COURT

# **THE REPURLIC OF UGANDA** IN THE SUPREME COURT OF UGANDA **AT KAMPALA**

(CORAM: Arach-Amoko, Mwondha, Mugamba, Muhanguzi, and Chibita JJ. SC)

## **CONSOLIDATED CIVIL APPEAL NOS. 13 & 14 OF 2019**

[Arising from Civil Appeals No.52 of 2017 and 88 of 2018]

## CHINA ROAD & BRIDGE CORPORATION::::::::::::::::::::::::::::::::::::

**VERSUS**

WELT MAHINEN ENGINEERING LIMITED::::::::::::::::::::::::::::::::::::

### AND

CHINA ROAD & BRIDGE CORPORATION::::::::::::::::::::::::::::::::::::

#### **VERSUS**

#### 1. WELT MAHINEN ENGINEERING LIMITED **2. ATTORNEY GENERAL** J**....................................**

{Appeal from the decision of the Court of Appeal at Kampala (Alfonse C. Owiny-Dollo, DCJ; Barishaki Cheborion and Percy Tuhaise, JJA). Dated 21st June, 2019 in Civil Appeal Nos.52 of 2017 and 88 of 2018}

## **JUDGMENT OF M. S. ARACH-AMOKO, JSC**

I have had the benefit of reading in draft the Judgment of my learned brother Hon. Justice Mike Chibita, JSC. I agree with his decision that this Appeal should partially succeed for the reasons he has given in his Judgment. I also agree with the Orders he has proposed.

As the majority of the members on the Coram agree, this Appeal is hereby partly allowed on the terms as proposed by the learned Justice.

....day of.... tebruany.................................... Dated at Kampala this.... M. S. ARACH-AMOKO

JUSTICE OF THE SUPREME COURT