Eastern and Southern African Trade & Anor v Hassan Basajjabalaba & Anor (HCT-00-CC-CS 512 of 2006) [2007] UGCommC 32 (12 April 2007)

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Hassan Basajjabalaba (Aka Hassan Basajja) \line 2. Aisha Basajja Defendants\line \line {\ltrch\hich\b\loch\b 13 April 2007}\line \line {\ltrch\hich\b\loch\b BEFORE: }{\ul\ulc0\ltrch\hich\b\loch\b THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE}\line \line {\ul\ulc0\ltrch\hich\b\loch\b R U L I N G}\line \line The plaintiff\'92s claim against the defendants jointly and severally is for specific performanc e of the terms of the Deed Guarantee dated 10/7/2002 entered into between the plaintiff and the defendants; general damages for fraud and misrepresentation; costs and interest.\line \line When the case came up for a scheduling conference on 2/4/2007, Mr. Kavuma \'96 Ka benge for the defendants raised an objection regarding jurisdiction. He contended that the parties in their dealings agreed that the Guarantee would be governed and construed in accordance with the laws of England and that any dispute would be resolved thr ough arbitration.\line \line He also contended that the amended plaint is not accompanied by a list of documents, list of witnesses and the summary of the case as the law under 0.6 r. 1 (2) of the Civil Procedure Rules requires. He therefore invited me to find that this Court has no jurisdiction over the matter and that the suit is in any case incompetent. In support of his argument on jurisdiction, Mr. Kabenge cited to me two cases:\line {\ul\ulc0\ltrch\hich\i\b\loch\i\b Fonville V Kelly 111 and Others [2002] 1 EA 71 and Tononoka Steels Ltd V East & Sout hern African Trade & Development Bank [2002] 2 EA 536.}\line \line Mr. Sogi Katende and Mr. Arthur Sempebwa, learned counsel for the plaintiff, have invited me to over-rule the three objections and set down the suit for a scheduling conference. They filed written sub missions on the matter. It is, therefore, not necessary to repeat their arguments verbatim.\line \line I have addressed my mind to the arguments of all counsel on the matter. The Deed of Guarantee which the plaintiff is suing on is on record as annexture \'91B\'92 to the plaint. Clause 12 thereof provides as follows:} \par \pard\plain \ltrpar\s8\li567\ri567\lin567\rin567\fi0\sa283\ql\rtlch\af3\afs24\lang255\ltrch\dbch\af3\langfe255\hich\fs24\lang7177\loch\fs24\lang7177 {\rtlch \ltrch\loch\f1\fs24\lang7177\i0\b0 "12. Governing Law: This Guarantee shall be governed by and construed in accordance with the laws of England."} \par \pard\plain \ltrpar\s3\sa120\ql\rtlch\af3\afs24\lang255\ltrch\dbch\af3\langfe255\hich\fs24\lang7177\loch\fs24\lang7177 {\rtlch \ltrch\loch\f1\fs24\lang7177\i0\b0 \line From the pleadings, therefore, the law of England is the applicable law to the transaction. The issue is whether the Ugandan Courts have jurisdiction to hear and determine the dispute between the parties.\line The Constitution of Uganda (Article 132) read toge ther with the Judicature Act (S. 14 (2)) grant the High Court original jurisdiction in all matters. The contract Act (cap. 73, S. 2 (1) thereof) allows for the application of the common law of England that relates to contracts as modified by the doctrines of equity; public general statutes in force in England on the 11{{\*\updnprop10000}\up8 th} August, 1902; and the Acts of Parliament of the United Kingdom mentioned in the Act.\line \line Under the principles of Common Law of England that relate to contracts, which principles do apply to ou r very own situation, I reckon, English Courts are mandated to determine disputes as long as the person served with summons to file a defence is within England. I cannot see why, as a general principle, the same would not apply to our Courts.\line I have looked at the two authorities cited to me by Mr. Kabenge in support of his argument.\line \line The first one, {\ul\ulc0\ltrch\hich\i\b\loch\i\b Fonville V Kelly,} supra, is a case that started in the High Court of Kenya. Kenya has comparable jurisprudence in matters of contract. The Court in that case hel d that where the parties to a contract expressly agreed that the contract was to be governed by a particular law, that law was the proper one to be applied. I agree. In that case, the subject matter of the suit was a breach of the Stock Purchase Agreement. Clause 12 of the agreement provided that the contract would be construed in accordance with the law of the State of Florida, USA and that the venue of the proceedings would be Orange County, Florida. The jurisdiction of the Kenyan Courts was therefore ous ted with regard to any dispute arising from the agreement. In the instant case, the Loan Facility Agreement and the Guarantee agreement do not provide that the venue of the proceedings would be in England. The mere fact that the law applicable to the trans action was the law of England would not in itself be ground to shift the venue of the trial to England unless the parties so wish. If the parties felt that Ugandan lawyers would not serve them to their satisfaction, as would their English counterparts, the y (the parties) would be at liberty to fly in lawyers of their choice. I do not think that it would be necessary to fly in English Judges as well. In my view, the case cited to me is distinguishable on facts and inapplicable to the instant case.\line \line The secon d case, {\ul\ulc0\ltrch\hich\i\b\loch\i\b Tononoka Steels Ltd}, supra, is relevant to the facts herein. The appellant borrowed money from the respondent. Thereafter, a dispute arose and the appellant sued the respondent. The respondent argued that the law applicable was English law by virtu e of a clause to that effect in the contract, and the trial Court (in Kenya) agreed with that argument. The Court decided that it had no jurisdiction in the matter. On appeal, the appellate Court reversed the lower Court decision. Lakha JA\'92s observation is instructive herein. He stated:} \par \pard\plain \ltrpar\s8\li567\ri567\lin567\rin567\fi0\sa283\ql\rtlch\af3\afs24\lang255\ltrch\dbch\af3\langfe255\hich\fs24\lang7177\loch\fs24\lang7177 {\rtlch \ltrch\loch\f1\fs24\lang7177\i0\b0 "Whatever else may or may not be the effect of this clause, in my judgment, it does not oust the jurisdiction of this Court. The learned Judge, in holding as he did, that the jurisdiction of the Court was ousted, was, with respect, clearly in error."} \par \pard\plain \ltrpar\s3\sa120\ql\rtlch\af3\afs24\lang255\ltrch\dbch\af3\langfe255\hich\fs24\lang7177\loch\fs24\lang7177 {\rtlch \ltrch\loch\f1\fs24\lang7177\i0\b0 The case, though cited to me by the defendants\'92 counsel, clearly favours the plaintiff herein. It is a case from a Sister Republic, with comparable jurisprudence. The decision, though not binding upon the High Court of Uganda, is pleasantly persuasive. The Kenyan Courts applied English law in Kenya. I do not see why we would not do the same in a situation where, as we are told, the guarantee agreement was entered into in Uganda; the defendants are Ugandans; and the money was used (or misused) by a Ugandan C ompany. The convenience of the case would dictate that the case be heard and determined here, in the absence of any prior agreement, between the parties, to the contrary. I would therefore find no merit in the objection and over rule it.\line \line Mr. Kavuma-Kabeng e\'92s other argument relates to arbitration. Counsel is of the opinion, that in accordance with the Arbitration and Conciliation Act of this country, the Court should be compelled to refer the matter to arbitration, presumably in England. It would appear tha t counsel is basing his argument on Annexture \'91A\'92 to the plaint, Article 24, which states that any dispute between the parties to that agreement should be settled by an Arbitration Tribunal. In my view, this argument should also fail. Annexture \'91A\'92 is a lo an facility agreement between the plaintiff and a company, Basajjabalaba Hides and Skins Ltd, a limited liability company. The same has nothing to do with the defendants herein, who are being sued on another agreement, a Guarantee Deed, they signed with th e plaintiff, Annexture \'91B\'92 to the plaint. My careful perusal of the annextures to the pleadings shows that annexture \'91B\'92, unlike annexture \'91A\'92, does not have any clause in it to do with arbitration. Any arbitration conducted in the matter would, in my view , be procedural rather than contractual. I would also over-rule this objection.\line \line The final objection relates to the alleged unsustainability of the plaint. It is alleged that the plaintiff did not attach a summary of facts and evidence, and the necessary l ists of documents and witnesses. The plaintiff\'92s counsel deny it. There are two aspects to this matter. The first one is that both parties agree that the law applicable to the dispute is the law of England. 0.6 r. 1 (2) is a local law, not the law of Engla nd. Be that as it may, it would appear to me that the law envisioned by the parties in the Guarantee Deed is the substantive law of contract, not the procedural law relating to filing of pleadings. Since this point was not argued before me, I beg to offer no further comment on it.\line The other aspect relates to the point raised by Mr. Kavuma- Kabenge about alleged non-filing of some documents.\line I have looked at the very first plaint filed herein on 21/8/2006. It had the impugned attachments. The defendants do n ot seem to dispute that. The problem appears to be with the subsequent amendment. The Court record shows that even the amended plaint has all the required lists. It is not clear to me whether or not the same were smuggled on to the record after the point h ad been raised by Mr. Kavuma-Kabenge. If this is so, God should forgive litigants and/or their lawyers with such dishonest inclinations. There is of course the possibility that the copy supplied to the defendants, unlike the Court copy, did not, deliberate ly or otherwise, have the impugned attachments. It is a matter of great regret that at the time of hearing, Court did not make any verification as to whether or not the Court record, like Mr. Kabenge\'92s, lacked the impugned attachments. In view of this doub t, Court is unable to make a definite finding of fact on the matter. Be that as it may, the plaintiff filed the first plaint with all the requisite lists. They were served on the defendants. Within the time allowed by law, the plaintiff amended its plaint, making a very minor alteration to the original plaint. The rest remained the same. In my view, mindful as I\'92m, that one of the intentions of amending 0.6 of the Civil Procedure Rules was to avoid surprises or ambushes in matters of this nature, the defend ants cannot plead surprise in this case. The case cited to me, {\ul\ulc0\ltrch\hich\i\b\loch\i\b Sule Pharmacy Ltd V The Registered Trustees of the Khoja Shia Itana Shari Jamat (Misc. Application No. 147/1999} arising out of {\ul\ulc0\ltrch\hich\i\b\loch\i\b HCCS No. 30/99} \'96 unreported) covered this kind of situation. Apply ing the ratio {\ltrch\hich\i\loch\i decidendi} in that case to the facts herein, and given that the Constitution of Uganda mandates Courts to administer justice without un due regard to technicalities, I\'92m inclined to over-look the omission, if any, in the greater interests of j ustice and in accordance with Article 126 (2) (e) of the Constitution. \line \line In the result, the objections are overruled. The case shall be set down for a scheduling conference where the possibility of Alternative Dispute Resolution (ADR), particularly mediati on, and the possibility of staying proceedings pending exploration of ADR, shall be explored.\line \line Costs herein shall abide the outcome of the main suit. It is so ordered.} \par \pard\plain \ltrpar\s1\ql\rtlch\af3\afs24\lang255\ltrch\dbch\af3\langfe255\hich\fs24\lang7177\loch\fs24\lang7177 \par }