Electro-Maxx (U) Limited v ABSA Bank Uganda Limited & Another (Civil Application 1185 of 2023) [2024] UGCA 199 (2 August 2024)

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA **CIVIL APPLICATION NO.1185 OF 2023**

[ARISING FROM CIVIL APPLICATION NO.1184 OF 2023] [ARISING FROM MISCELLANEOUS APPLICATION NO.2555 OF 2023] [ARISING FROM HIGH COURT MISCELLANEOUS APPLICATION NO. 1195 OF 20221 [ARISING FROM HIGH COURT CIVIL SUIT NO. 162 OF 2020]

## ELECTRO-MAXX (U) LIMITED....................................

#### **VERSUS**

#### 1. ABSA BANK UGANDA LIMITED

2. UGANDA ELECTRICITY TRANSMISSION <table>

COMPANY LIMITED ....................................

#### **RULING OF CHRISTOPHER GASHIRABAKE, JA**

## (SINGLE JUSTICE)

## Introduction.

[1] This application was brought under Rules $2(2)$ , $6(2)$ (b), and $42(1)$ of the Judicature (Court of Appeal Rules) Directions S. I -13-10, for Orders that;

(a) An Order of stay of execution of the Orders in Civil Suit No.162/2020; Electromaxx (U) Limited Vs ABSA Bank Uganda Limited & Anor pending the hearing and final determination of Civil Application No.1184 of 2023 in this court.

(b) Costs of this application be provided for.

## Background.

[2] The background to the application was that the applicant entered a consent judgment with the respondents in **Electromaxx** (U) Limited Vs ABSA Bank Uganda Limited & Anor, High Court Civil Suit No.162 of 2020; which consent was subsequently varied by two consent variation orders dated 121h October 2O2l and l2th January 2023 respectively.

[3] However, in a sudden twist of events, the applicant filed High Court Miscellaneous application No.l195 of 2023; Electromaxx (U) Limited Vs ABSA Bank Uganda Limited & Anor which sought to have the consent judgment in Civil Suit No. 162 of 2020 set aside.

[a] High Court Miscellaneous Application No.l195 of 2023 came up for hearing on the 28tr' September 2023 before Justice Stephen Mubiru and the same was dismissed against the applicant.

[5] The applicant was dissatisfied with the decision. The applicant filed <sup>a</sup> notice of appeal in the High Court on the 29th September 2023. The applicant also applied for leave to appeal and stay ofexecution which applications were dismissed. The applicant then filed this instant application for stay of execution.

[6] The grounds upon which the application was based were set out in the application but more particularly in the affidavit of Charles Muhumuza, the applicants' director, dated 71h November 2023.

[7] In his affidavit in support, Charles Muhumuza averred that the applicant is aggrieved and disgruntled with the dismissal of application for which the applicant has filed a notice of appeal and the applicant is likely to suffer a substantial loss if the stay order is not granted.

[8] Further, that the applicant filed in this court an application for leave to appeal vide Civit Application No. I 184 of 2023 in which the applicant inter alla seeks an order to have the appeal validated.

[9] He concluded that there is an imminent danger of execution since the l'1 Respondent is already enforcing and/or exercising its rights under the consent judgment which rights are subject and form part of Civil Application No.1 184 of 2023 and that this application was filed without unreasonable delay and if not granted, it will render the appeal nugatory.

[10] The respondent opposed the application in an affidavit affirmed on the 25th June 2024 by Kalid Mpata, a legal officer with the Respondent bank in which he averred that this application has no legal basis because there is no valid appeal before this court because the applicant's initial application for leave before the High Court, was filed several days out of time and that the applicant does not satisflu the conditions for the grant ofthe order sought.

#### Representation.

[1 I ] When this matter came up fbr hearing on the 281h June 2024,the applicant was represented by Mr. Moogi Brian. Mr. Timothy Lugayizi represented the Respondent. Both parties filed written submissions before the hearing which submissions were adopted. Both have been considered in arriving at the decision in this ruling.

### Submissions for the Applicants.

[12] Mr. Moogi for the Applicant submitted that the applicant satisfied the conditions for the grant of stay of execution by this court. He relied on rules 2(2), 6(2) (b) and 42(l\ of the rules of this court. He also referred to Theodore Ssekikubo & Ors V The Attorney General & Others, Constitutional Application No.06/20l3;with regard to the conditions to be satisfied before the court grants an order for stay ofexecution pending appeal, which he stated were as follows;

- (i) The Applicant must establish that his appeal has <sup>a</sup> likelihood of success, or a prima facie case of his right to appeal. - (i, It must also be established that the applicant will suffer irreparable damage or that the appeal will be rendered nugatory if a stay is not granted. - (iii) If (i) and (ii) has not been established, court must consider where the balance of convenience lies.

# (iv) That the applicant must also establish that the application was instituted without delav.

<sup>I</sup>l3] As to whether there is a pending appeal that has a prima facie case with a high likelihood of success, counsel submitted that in demonstrating existence of a prima facie case, it is important and sufficient for the applicant to point out the questions for determination before the Court of Appeal. The applicant attached a copy of Civil Application No. 1 184 of 2023 which was marked as annexture "E" bearing the draft grounds for this court's consideration.

I ] As to whether there will be irreparable loss caused if execution proceeds, counsel referred to Giella V Cassman Brown & Co. [1973] E. A 358 where it was held that by ineparable injury, it does not mean that there must not be physical possibility of repairing the injury, but it means that the injury or damage must be substantial or a material one ;that cannot be adequately atoned for in damages.

<sup>I</sup><sup>I</sup>5] He submitted that substantial loss to be suffered in this case is the looming execution against the individual shareholders of the Applicant before the determination of serious points of law and fact in the appeal.

[16] He went on to submit on the balance of convenience, relying on Pius Kipchirchir Kogo V Frank Kimeli Tenai (2018) E KLR that the balance of convenience lies in favour ofthe applicant who have a pending application for leave to appeal and the applicant is likely to suffer more if the orders sought are not granted.

[ 7] Finally, the applicant submitted that this application was brought without undue delay relying on the decision of Kyavawa Betty & 5 Ors V Tebajjukira Milly & Anor ,Civil Application No.l068 of 2023 where this court observed that what is critical is that the applicant expressed the necessity to appeal at the earliest possible opportunity. Counsel stated that this application was brought without undue delay.

# Submissions for the Respondent.

[ 8] In reply, Counsel for the Respondent submitted that this application is based on an incompetent application for leave to appeal as the initial application for leave before the High Court was served several days out of time. He submitted that this court cannot rely on an incompetent application to grant a stay of execution to that effect.

Secondly, the respondent argued that the applicant did not meet the considerations for the grant of an application for stay of execution.

# Consideration of Cou rt.

[19] I have carefully read the pleadings and affidavit evidence filed by the parties. I have also read the rival submissions of the parties and a number of authorities of the Supreme Court and of this court some of which were cited by the leamed counsel for the parties in support of their respective legal arguments.

[20] There is no doubt that the common thread in the said decisions is the fact that the law and the principle goveming the grant or otherwise of stay of execution application are well settled.

[21] From the submissions of Counsel for the Respondent, a preliminary objection was raised as to the competence of this application. I am inclined to first determine the said objection before considering the merits of this application.

[22] The respondent in his submission contested the competency of this application arguing that this instant application seeks interlocutory reliefs to protect the applicant's intended appeal pending the determination ofthe application for leave to appeal. The respondent further submitted that the applicant does not have a right to bring an appeal before this court until the leave to appeal application is granted and as such, the applicant is not entitled to the orders sought. In support ofthat argument, the Respondent relied on Busia Produce Dealers Multi- Purpose Cooperative Society V Stanbic Bank (U) Limited, Civil Application No.l85 of 2021.

[23] In the instant case, it is averred in the Notice of Motion and affidavit in supporl that the applicant filed an application for leave to appeal the decision of the High Court vide Miscellaneous Application No.l184 of 2023 which application is still pending.

[24] It is also not disputed that the order of the High Court in Miscellaneous Application No. I 195 of 2022 is not one from which an appeal lies as of right within the context of Order 44( I ) CPR. II is an order that requires the aggrieved party to first seek leave of the trial court or leave of this court in the event the trial court declines to grant leave. This is the import of Order 41(1) & (2) CPR.

[25] It appears that the applicant was alive to the fact that the nature oforders granted by the High Court in Miscellaneous Application No.1l95 of 2022 required leave of court before an appeal could be preferred. Aggrieved with the said orders, the applicant filed a notice of appeal and a letter requesting for typed record of proceedings to the High Court.

[26] The Applicant also sought leave to appeal from the High Court vide High Court Miscellaneous Application No.2555 of 2023and further sought an application for stay of execution vide Miscellaneous Application No.2422 of 2023. The two applications were dismissed by the High Court. It is upon the dismissal of the said applications that the applicant filed the application for leave to appeal vide Civil Application No. I I 84 of 2023 and this instant application for stay of execution.

[27] What appears to be in dispute though is that the application for leave to appeal before the High Court was filed out of time. I take note that the applicant in the rejoinder attempts to offer an explanation for having fited the leave to appeal application before the High Court out of time and I also note that the respondent though stated that the applicant's leave application was dismissed on the same ground, no evidence was led to buttress that point.

[28] I am persuaded by the decision of this courl in Jomayi Property Consultants Ltd V Andrew Maviiri, Reference No.l7412015 where this court held that stay applications are interlocutory in nature. [29] Regarding the issue pertaining the competence of the leave to appeal application, a single justice has no jurisdiction to sit in the determination of such application. The application shall be determined by the full panel of this court. <sup>I</sup> accordingly ovem:le the preliminary objection and proceed to determine this instant application on merit.

[30] The jurisdiction of this Court to grant a stay of execution is set out in Rule 6(2) (b) of the Rules of this Court which provides that:

" 2. Subjecl to sub rule (l) of this rule, the institution of an appeal sholl not operole to suspend any sentence or to stoy execution, bul the court moy: in any civil proceedings, where a notice of appeal has been lodged in accordance wilh rule 76 of these Rules, order a slay of execulion, an injunction, or a stay of proceedings on such terms ss the court may think just.

[31] Rule 6(2) and rule2 (2) give this Court, the discretion, in civit proceedings, where a notice of appeal has been lodged in accordance with rule 76 of the Rules of this Court, to grant a stay ofexecution in appropriate cases and on terms that it thinks fit. This discretionary power must be exercised in a way that does not prevent a party from pursuing its appeal so that the same is not rendered nugatory should the Court of appeal overtum the trial court's decision.

[32] In Hon. Theodore Ssekikubo & Ors V The Attorney General & Anor (supra), the supreme court laid down the principles to guide court in an application for stay of execution as follows;

- (i) The Applicant must establish that his appeal has a likelihood ofsuccess, or a prima facie case of his right to appeal. - (ii) It must also be established that the applicant will suffer irreparable damage or that the appeal will be rendered nugatory if a stay is not granted. - (iii) If (i) and (ii) has not been established, court must consider where the balance of convenience lies.

(iv) That the applicant must also establish that the application was instituted without delay.

[33] After considering the application, affidavit evidence in reply, and submissions, the issue for determination is whether this application presented justified reasons for granting a stay of execution.

## Likelihood of Success.

[34] On the issue of whether the appeal has a likelihood of success, this court has to establish whether the applicant has raised issues on appeal that are triable by the court. In Gashumba Maniraguha V Sam Nkundiye, SC Civil Application No.24 of 20IS,the Supreme Court held that;

"Furlher, in our view, even though this court is not at this stage deciding tlrc appeal, it must be satisfed that the appeal raises issues that merit consideration by the Court. A cursory perusal of the record particularly the judgement o/'the court of appeal as well as the notice of appeal reveals that the intended appeal raises the important question of res judicata, it is not therefore frivoIous. "

[35] The Respondent has argued that the appeal has no likelihood of success as the application for leave to appeal was filed out of time and the odds are that the same is liable to be struck out. I find such an argument speculative. That is for the futl coram to determine.

[36] The Supreme Court in Gashumba (supra) while handling a similar matter held that;

"thefact that the applicant has not yet compliedwith Section 6(2) of the Judicature Act has no bearing on the success of the appeal since he still has the opportunity to do so. "

[37] In fact, the Supreme Court in Gashumba had earlier advised that if the applicant was still interested in the appeal, he would apply tbr an extension of time within which to file the certificate as required by [aw. Similarly, what is of interest is that the applicant has to demonstrate that the appeal raised triable issues at appeal.

[38] I have perused the affidavit supporting the application for leave to appeal/ validation of the notice of appeal attached which in paragraph I I highlights the draft grounds ofappeal. These are;

- 0 THAT the learned trial Judge erred in law and fact when he disregarded the Applicant's point that the Applicant entered into the consent because of the I't Respondent's misrepresentation of facts that she would avail the Applicants with an invoice discounting facility. - (iil THAT the learned trial judge erred in lar+, and fact in finding that the impugned consent had been properly and legally executed. - (iii) THAT the learned trial judge erred in law and fact when he found that the demand notices to the Applicant by the l'' Respondent during the negotiation of the consent terms did not amount to economic duress which renders such a contract voidable. - (iu) THAT the learned trial judge erred in law and fact when he held that the consent judgement was valid and denied the Applicant's application.

[39] Rute 53(2) of the rules of this court bars a single Justice of this court from hearing applications for leave to appeal. See Jomayi Property Consutants (supra).

## lrreparable damage.

[a0] The term irreparable damage is defined in Black's law Dictionary,9th Edition at Page 447 to mean;

" Damages that cannol be easily ascertained because there is no fixed pecuniary standard measuremenl. "

[41] The applicant states in paragraph 9 that it will suffer substantial loss evidenced by some execution against the individual shareholders of the applicant prior to the determination of the points of law shown in the appeal.

[a2] The respondent states that the Applicant will not suffer any substantial loss as in paragraph 9, it asserts that it wilt be able to repay this sum in the likely event that the Applicant is granted leave to appeal.

[a3] I find that there is a real risk ofexecution against the individual shareholders of the Applicant Company.

## Balance of conven ience.

[44] Under the balance of convenience, the court must be satisfied that the comparative mischief, hardship, or inconvenience is likely to be caused to the applicant by refusing to grant the injunction. In Jayndrakumar Devechand Devani V Haridas Vallabhdas Bhadresa & Anor,[971] EACA ll,where the court observed as follows; ' .r5 'r

"where any doubt exist as to the plaintiffs right, or if his right is not disputed but its violation is denied, the court, in determining whether an interlocutory injunction should be granted, takes into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted and he should ultimately turn out to be right and that which the plaintiff on the other hand might sustain if the injunction was refused and he should turn out to be right. The burden of proof that the inconvenience which the plaintiffwill suffer by the refusal of the injunction is greater than that which the defendant will suffer, if it is granted, lies on the plaintiff "

[45] The applicant has submitted in the affidavit in support that should the order for stay be denied, the applicant shall suffer more than the Respondent. I also find that the balance of convenience tilts in favour of the applicant and I find that this condition has also been satisfied.

[46] In the result, this application is granted with the following orders;

- (a) An Order of stay of execution of the Orders in Civil Suit No.162l2020;Electromaxx (U) Limited Vs ABSA Bank Uganda Limited & Anor is hereby issued pending the hearing and final determination of Civil Application No.l 184 of 2023 in this court. - (b)Costs shatt abide the outcome of Civil Application No.l184 of 2023. - (c) The Registrar is required cause list the application in the next convenient session

## I so Order. Dated signed and delivered at Kampala this f\*,"r@Coz+

;

C. GASHI AKll JUSTICE OF APPEAL