Pan African Insurance Company (U) Ltd v International Air Transport Association (HCT-00-CC-MA 86 of 2006) [2008] UGCommC 24 (27 March 2008)

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)}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2897808 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\f1\fs28\insrsid7348657 THE REPUBLIC OF UGANDA \par }{\b\f1\fs28\insrsid2897808\charrsid13251884 IN THE HIGH COURT OF UGANDA AT KAMPALA \par (COMMERCIAL COURT DIVISION) \par \par \par HCT-00}{\b\f1\fs28\insrsid140311 -}{\b\f1\fs28\insrsid2897808\charrsid13251884 CC-}{\b\f1\fs28\insrsid5265740 MA}{\b\f1\fs28\insrsid2897808 -}{\b\f1\fs28\insrsid5265740 086}{\b\f1\fs28\insrsid2897808 -2006 \par }{\b\f1\fs28\insrsid5265740 (Arising out of HCT-00-CC-667-2003) \par }{\b\f1\fs28\insrsid2897808\charrsid13251884 \par \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2897808 {\b\f1\fs28\insrsid12013573 PAN AFRICAN INSURANCE COMPANY }{\b\f1\fs28\insrsid140311 (U) }{\b\f1\fs28\insrsid12013573 LTD .}{ \b\f1\fs28\insrsid12013573\charrsid13251884 \tab }{\b\f1\fs28\insrsid15754743 APPLICANT }{\b\f1\fs28\insrsid2897808\charrsid13251884 \par \par }\pard\plain \s1\qc \li0\ri0\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel0\adjustright\rin0\lin0\itap0\pararsid2897808 \fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid12013573 VS}{\insrsid2897808\charrsid13251884 \par }\pard\plain \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2897808 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\f1\fs28\insrsid2897808\charrsid13251884 \par }{\b\f1\fs24\insrsid12013573\charrsid15754743 INTERNATIONAL AIR TRANSPORT ASSOCIATION }{\b\f1\fs24\insrsid15754743 \'85\'85\'85}{\b\f1\fs24\insrsid15754743\charrsid15754743 RESPONDENT }{\b\f1\fs24\insrsid2897808 \par }{\b\f1\fs24\insrsid15754743\charrsid15754743 \par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2897808 {\b\f1\fs28\insrsid2897808 \par }{\b\f1\fs28\insrsid15754743\charrsid13251884 \par }{\b\f1\fs28\insrsid2897808\charrsid13251884 BEFORE: HON. }{\b\f1\fs28\insrsid2897808 MR. }{\b\f1\fs28\insrsid2897808\charrsid13251884 JUSTICE LAMECK N. MUKASA \par \par \par }{\b\f1\fs28\insrsid937332 RULING}{\b\f1\fs28\insrsid2897808 : \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid937332 {\b\f1\fs28\insrsid937332 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7348657 {\f1\fs28\insrsid15298085\charrsid15298085 This is an application by Notice of Motion under section 98 of the Civil Procedure Act, Order 48 rule 1 of the Civil Procedure Rules. }{\f1\fs28\insrsid15298085 The Applican}{\f1\fs28\insrsid8091618 t, Pan African Insurance }{\f1\fs28\insrsid140311 Company }{\f1\fs28\insrsid8091618 (U) Ltd, who is the judgment debtor in H. C. C. S. No. 667 of 2003, is seeking orders that:-}{\f1\fs28\insrsid937332 \par }{\f1\fs28\insrsid8091618 \par {\listtext\pard\plain\f1\fs28\insrsid11752223 \hich\af1\dbch\af0\loch\f1 (a)\tab}}\pard \qj \fi-480\li840\ri0\sl360\slmult1\widctlpar\jclisttab\tx840\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin840\itap0\pararsid7348657 {\f1\fs28\insrsid11752223 The execution of the Decree against the Applicant in HCCS No. 667 of 2003 be stayed. }{\f1\fs28\insrsid140311 \par {\listtext\pard\plain\f1\fs28\insrsid11752223 \hich\af1\dbch\af0\loch\f1 (b)\tab}}{\f1\fs28\insrsid11752223 T}{\f1\fs28\insrsid3344390 h}{\f1\fs28\insrsid11752223 e costs of this application be provided for. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7348657 {\f1\fs28\insrsid11752223 \par }{\f1\fs28\insrsid11752223\charrsid3344390 The grounds for the application are that:- \par {\listtext\pard\plain\f1\fs28\insrsid11752223 \hich\af1\dbch\af0\loch\f1 1.\tab}}\pard \qj \fi-390\li750\ri0\sl360\slmult1\widctlpar\jclisttab\tx750\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin750\itap0\pararsid7348657 {\f1\fs28\insrsid11752223 The Applicant has a pending appeal in the Court of Appeal against the judgment in H. C. C. S No. 667 of 2003. \par {\listtext\pard\plain\f1\fs28\insrsid11752223 \hich\af1\dbch\af0\loch\f1 2.\tab}If execution of the Decree is not stayed, the applicant will suffer substantial loss. \par {\listtext\pard\plain\f1\fs28\insrsid11752223 \hich\af1\dbch\af0\loch\f1 3.\tab}The application for stay of execution has been made without unreasonable delay. \par {\listtext\pard\plain\f1\fs28\insrsid15407803 \hich\af1\dbch\af0\loch\f1 4.\tab}}{\f1\fs28\insrsid15407803 T}{\f1\fs28\insrsid11752223 he appeal has a reasonable likelihood of success as there are matters of substance and merit upon which the appeal against the decision of the High Court in HCCS No 667 of 2003 is based. \par {\listtext\pard\plain\f1\fs28\insrsid11752223 \hich\af1\dbch\af0\loch\f1 5.\tab}The applicant is ready to obey orders of }{\f1\fs28\insrsid488467 Court as}{\f1\fs28\insrsid11752223 to security for the due performance of the decree as may ultimately be biding upon it. \par {\listtext\pard\plain\f1\fs28\insrsid488467 \hich\af1\dbch\af0\loch\f1 6.\tab}}{\f1\fs28\insrsid488467 I}{\f1\fs28\insrsid11752223 t is just, eq}{\f1\fs28\insrsid5203480 uitable and in the interest of j}{\f1\fs28\insrsid11752223 ustice that the applicant/judgment debtor be granted a stay of execution. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7348657 {\f1\fs28\insrsid2101545 \par Representation was Ms Florence Kabenge for the Applicant and Mr. Andrew Kibaya for the Respondent. }{\f1\fs28\insrsid5203480 \par \par }{\f1\fs28\insrsid2101545 The background to this application is that the }{\f1\fs28\insrsid5203480 A}{\f1\fs28\insrsid2101545 pplicant filed H. C. C. S. No. 667 of 2003 against the Respondent, International Air Transport Association, seeking to recover US$75,000, as payment made}{\f1\fs28\insrsid9453645 }{\f1\fs28\insrsid2101545 in error under a guarantee, interest and cost}{ \f1\fs28\insrsid9453645 s. The Respondent }{\f1\fs28\insrsid5203480 c}{\f1\fs28\insrsid9453645 ounter-}{\f1\fs28\insrsid5203480 c}{\f1\fs28\insrsid9453645 laimed for US$31,767 being the balance owed by the Applicant on the guarantee, general damages for breach of the }{\f1\fs28\insrsid7620027 contract of guarantee, interest and costs. In its judgment delivered on 25}{ \f1\fs28\super\insrsid7620027\charrsid7620027 th}{\f1\fs28\insrsid7620027 January 2008, this Hon. Court dismissed the Applicant\rquote s suit and held in favour of the Respondent on the Counter \endash claim. This application is supported }{ \f1\fs28\insrsid488467 by an affidavit sworn by }{\f1\fs28\insrsid5203480 Ms }{\f1\fs28\insrsid488467 Maria Odido, the Managing Director of the Applicant Company. She therein avers that the appeal has a reasonable likelihood of success as there are matters }{\f1\fs28\insrsid2841793 of law, subsist}{\f1\fs28\insrsid5203480 a}{\f1\fs28\insrsid2841793 nce and merit which the }{\f1\fs28\insrsid14952540 appellant}{ \f1\fs28\insrsid2841793 court shall be asked to decide. That if }{\f1\fs28\insrsid14952540 execution}{\f1\fs28\insrsid2841793 of the Decree is not stayed the Applicant/Judgment debtor will }{\f1\fs28\insrsid14952540 suffer substantial loss and the decision of the Court of Appeal will be rendered nugatory.}{\f1\fs28\insrsid2101545 \par }{\f1\fs28\insrsid14952540 \par The Respondent filed an affidavit in Reply deponed to by Mr. By}{\f1\fs28\insrsid5203480 r}{\f1\fs28\insrsid14952540 a}{\f1\fs28\insrsid5203480 d}{\f1\fs28\insrsid14952540 Sebuliba an }{\f1\fs28\insrsid5203480 advocate practicing with M/S Sho}{ \f1\fs28\insrsid14952540 nubi, Musoke & Co Advocates the firm of lawyers representing the Respondent. He therein contends that }{\f1\fs28\insrsid15688686 the Applicant}{\f1\fs28\insrsid14952540 }{\f1\fs28\insrsid15688686 does not show that it will }{ \f1\fs28\insrsid5203480 suffer substantial loss if the a}{\f1\fs28\insrsid15688686 pplicat}{\f1\fs28\insrsid5203480 ion}{\f1\fs28\insrsid15688686 is not granted. That the Applica}{\f1\fs28\insrsid5203480 n}{\f1\fs28\insrsid15688686 t does not show that the Respondent will not be able to restore it to the status quo a nte if its appeal in this suit succeeds by a refund of the money received by the Respondent in execution of the Decree. In paragraphs 4 he avers that the Respondent is an association of international airlines, a going commercial concern and able to refun d any amount of money received by it to the Applicant if the Applicant}{\f1\fs28\insrsid5203480 \rquote }{\f1\fs28\insrsid15688686 s appeal succeeds. Further that the Applicant }{\f1\fs28\insrsid8479982 has not furnished security for the due performance of any decree that may ultimately be binding upon it. He also argues that the Applicant has not shown h}{\f1\fs28\insrsid142807 ow the appeal has a likelihood of success. }{\f1\fs28\insrsid11752223

\par }{\f1\fs28\insrsid142807 \par This application is brought under section 98 of the Civil Procedure Act. The Supreme Court has in several cases held that it is well establi}{\f1\fs28\insrsid15485318 shed that the High Court has inh}{\f1\fs28\insrsid142807 ere}{\f1\fs28\insrsid15485318 n}{\f1\fs28\insrsid142807 t jurisdiction under the section to grant a stay of its own decree pending an appeal. See }{\i\f1\fs28\ul\insrsid142807\charrsid142807 Mugenyi & Co Advocates Vs N. I. C. Civil Appeal No:13 of 1984, Francis Mansio Mica}{ \i\f1\fs28\ul\insrsid15485318 h}{\i\f1\fs28\ul\insrsid142807\charrsid142807 Vs Nuwa Walakira (1992 \endash 1993 HCB 88.}{\i\f1\fs28\ul\insrsid142807 \par \par }{\f1\fs28\insrsid142807\charrsid142807 It is now }{\f1\fs28\insrsid142807 settled that Court can only exercise the discretion to grant a stay of execution if there are special circumstances and good cause to justify a stay. The inability of the }{ \f1\fs28\insrsid15485318 v}{\f1\fs28\insrsid142807 ictorious party to be able to refund the decremental amount in the event of a successful appeal is one of such special circumstances i f proved. The Applicant has not adduced any evidence to show that the Respondent will not be able to restore it to the status quo ante if its appeal succeeds. On }{\f1\fs28\insrsid14684067 the part}{\f1\fs28\insrsid142807 of the Respondent it is deponed on oath that it will be able to refund any amount of money received by it if the Applicant}{\f1\fs28\insrsid15485318 \rquote }{\f1\fs28\insrsid142807 s appeal succeeds. The above averment has }{\f1\fs28\insrsid15230086 neither been denied nor}{\f1\fs28\insrsid142807 rebutted. }{\f1\fs28\insrsid10644487 The presumption is that it is admitted as a true fact. See }{\i\f1\fs28\ul\insrsid10644487\charrsid10644487 Massa Vs A}{\i\f1\fs28\ul\insrsid15485318 chen}{ \i\f1\fs28\ul\insrsid10644487\charrsid10644487 (1978) HCB 297}{\f1\fs28\insrsid10644487 . So the Applicant\rquote s appeal if successful, will not be rendered nugatory because the }{\f1\fs28\insrsid15604001 Respondent will be able to restore it to the status quo ante. See }{\i\f1\fs28\ul\insrsid15604001\charrsid15604001 Editor \endash Chief the New Vision Newspaper Vs Jeremiah Ntabgoba Court of Appeal Civil Application No. 63 of 2004}{ \f1\fs28\insrsid15604001 .}{\f1\fs28\insrsid142807 \par }{\f1\fs28\insrsid15604001 \par The Application merely states that if }{\f1\fs28\insrsid15230086 the decree}{\f1\fs28\insrsid15604001 is not stayed the Applicant will suffer }{\f1\fs28\insrsid15230086 substantial loss}{\f1\fs28\insrsid15604001 . The deponent should have gone a step further to lay the basis upon which Court can make a finding that the Applicant will suffer substantial loss as alleged. The Applicant should go}{\f1\fs28\insrsid15485318 beyond the vague and generalised}{ \f1\fs28\insrsid15604001 assertion of substantial loss in the even}{\f1\fs28\insrsid15485318 t}{\f1\fs28\insrsid15604001 a stay order is not granted. In the Tanzania}{\f1\fs28\insrsid15485318 n}{\f1\fs28\insrsid15604001 Case of }{ \i\f1\fs28\ul\insrsid15604001\charrsid15604001 Tanzania Cotton Marketing Board Vs Cogecot Cotton Co SA (1995 \endash 1998) IEA 312}{\f1\fs28\insrsid15604001 Lubuva JA cited with approval the }{\f1\fs28\insrsid15604001\charrsid15485318 Indian case of}{ \i\f1\fs28\ul\insrsid15604001\charrsid3694849 Bansidha}{\i\f1\fs28\ul\insrsid15485318 r}{\i\f1\fs28\ul\insrsid15604001\charrsid3694849 Vs Pribku Dayal AIR 41 1954}{\f1\fs28\insrsid15604001 where it was stated: \par \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid7348657 {\i\f1\fs28\insrsid3694849\charrsid3694849 \'93 It is not enough merely to repeat the words of the code and state that substantial loss will result; the kind of loss must be specified, details must be given and the conscience of the Count must be }{\i\f1\fs28\insrsid11674371\charrsid3694849 sa}{ \i\f1\fs28\insrsid11674371 tisfied}{\i\f1\fs28\insrsid3694849\charrsid3694849 that such loss will really ensure.\'94}{\i\f1\fs28\insrsid3694849 \par \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7348657 {\f1\fs28\insrsid3694849\charrsid3694849 It was further observed}{\i\f1\fs28\insrsid3694849 :- \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid7348657 {\i\f1\fs28\insrsid3694849 \par \'93The words substantial cannot mean }{\i\f1\fs28\insrsid14684067 the ordinary}{\i\f1\fs28\insrsid3694849 loss to which every judgment \endash debtor is necessarily subjected when he loses his case and is deprived of his property in }{ \i\f1\fs28\insrsid13635494 consequence. That is an element which must occur in every case and since the code expressly pro}{\i\f1\fs28\insrsid15485318 hibits }{\i\f1\fs28\insrsid13635494 stay of execution as an }{\i\f1\fs28\insrsid14684067 ordinary rule }{\i\f1\fs28\insrsid15485318 , }{\i\f1\fs28\insrsid11674371 I}{\i\f1\fs28\insrsid15485318 t}{\i\f1\fs28\insrsid11674371 is}{\i\f1\fs28\insrsid13635494 clear the words \lquote substantial loss\rquote must mean something in addition to all different from that.\'94}{\i\f1\fs28\insrsid3694849 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7348657 {\i\f1\fs28\insrsid13635494 \par }{\f1\fs28\insrsid13635494 As to }{\f1\fs28\insrsid13635494\charrsid15485318 the}{\b\f1\fs28\insrsid13635494\charrsid8790582 }{\f1\fs28\insrsid8790582\charrsid15485318 pe}{\f1\fs28\insrsid15485318\charrsid15485318 n}{ \f1\fs28\insrsid8790582\charrsid15485318 dency}{\f1\fs28\insrsid8790582 of an appeal and its likelihood of success}{\f1\fs28\insrsid11674371 ,}{\f1\fs28\insrsid8790582 in }{\i\f1\fs28\ul\insrsid8790582\charrsid15485318 Uganda Revenue Authority Vs Te}{ \i\f1\fs28\ul\insrsid15485318\charrsid15485318 mbo}{\i\f1\fs28\ul\insrsid8790582\charrsid15485318 Steels Ltd HCT-00-CC-MA-0521-2007}{\f1\fs28\insrsid15485318 ,}{\f1\fs28\insrsid8790582 I held }{\f1\fs28\insrsid8790582\charrsid15485318 that pe}{ \f1\fs28\insrsid15485318\charrsid15485318 n}{\f1\fs28\insrsid8790582\charrsid15485318 dency}{\f1\fs28\insrsid8790582 of an appeal is not a bar to a successful part}{\f1\fs28\insrsid15485318 y\rquote }{\f1\fs28\insrsid8790582 s right to enforce a decree obtained even by execution. Further that it is also immaterial whether the appeal will succeed or fail. See also }{\i\f1\fs28\ul\insrsid8790582\charrsid8790582 National Pharmacy Ltd Vs Kampala City Council (1979}{ \i\f1\fs28\ul\insrsid15485318 ) HCB 132,}{\i\f1\fs28\ul\insrsid8790582\charrsid8790582 . DFCU Bank Ltd Vs Dr. Ann Persis Nakate Lusejjere C. A. C. App No. 29 of 2003}{\f1\fs28\insrsid8790582 . }{\f1\fs28\insrsid7348657 \par \par In the }{\i\f1\fs28\ul\insrsid7348657\charrsid7348657 Edito}{\i\f1\fs28\ul\insrsid15485318 r}{\i\f1\fs28\ul\insrsid7348657\charrsid7348657 in Chief The New Vision Newspaper Vs Ntabgoba}{\f1\fs28\insrsid7348657 (above) the Court of Appeal held that such things as likelihood of the intended appeal succeeding and willingness of the Applicant to deposit security for the performance of the decree or order are not legal requirements for consideration whether or not to grant a stay of execution. \par \par Considering all the above this Application is dismissal with costs. \par \par \par \par \par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7348657 {\f1\fs28\insrsid7348657 \par Hon Mr. Justice Lameck N. Mukasa \par }{\b\f1\fs28\insrsid7348657\charrsid16543908 Judge \par }{\f1\fs28\insrsid7348657 28/03/08}{\f1\fs28\insrsid13635494 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11752223 {\f1\fs28\insrsid3694849 \par }{\f1\fs28\insrsid15604001\charrsid142807 \par }{\f1\fs28\insrsid142807\charrsid142807 \par }{\f1\fs28\insrsid142807 \par }{\f1\fs28\insrsid11752223\charrsid15298085 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15754743 {\b\f1\fs28\insrsid15754743 \par \par \par \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2897808 {\b\f1\fs28\insrsid2897808 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 {\insrsid6754790 \par }}