Sanyu Africa Research Institute (SAFRI) v Sanyu Africa Research Institute (SAFRI) Limited (Petition 9524 of 2022) [2023] UGRSB 16 (15 June 2023)


# THE REPUBLIC OF UGANDA

# **COMPANY PETITION NO. 9524 OF 2022**

SANYU AFRICA RESEARCH INSTITUTE (SAFRI)::::::::::PETITIONER

### **VERSUS**

| SANYU | <b>AFRICA</b> | <b>RESEARCH</b> | <b>INSTITUTE</b> | (SAFRI) | |-----------------------------------------|---------------|-----------------|------------------|---------| | LTD:::::::::::::::::::::::::::::::::::: | | | | |

# RULING ON THE PRELIMINARY OBJECTION

#### (Before Muliisa Solomon Registrar of Companies 07<sup>th</sup> June 2023)

#### A. <u>Representation</u>

The Petitioner was represented by Kasaija Robert jointly with Sharon Murungi. Some of the representatives of the petitioner present were Dr. Sam Ononge, Michael Maweda and Fredrick Obbo.

*The Respondent was represented by Nangulu Eddie together with Kisakye* Rebecca and Dr. Jacob Otti as the representative of the respondent company.

## **B.** Background

1. Counsel for the respondent raised another Preliminary Objection that these proceedings are barred by **Rule 4** of the Companies (Powers of the Registrar) Regulations, 2016 because the subject of the instant proceedings is a subject of **Civil Suit No.031 of 2023.**

## C. <u>Respondent's Submissions</u>

2. That the issue is determination of similarities of names and whether the respondents should be deregistered on that basis. Paragraph 7 of the suit before the High Court at Mbale is arising out of breach of trust, Fraud and (or) Misrepresentation by the defendants that they are legitimate members of the respondent in these proceedings.


- 3. That Paragraph 8 of the Plaint addresses the cause of action as arising from the registration of the respondent in these proceedings initially as an indigenous NGO under the name of Sanyu Africa Research Institute. Paragraph 8 (viii), (ix), (x), (xii) & (xiii) indicate that the $2^{nd}$ to $14^{th}$ defendants who are now the claimants of the complainants' foreign NGO fraudulently and under misrepresentation held out as bonafide members of the respondent and the said persons went on to register the NGO as a foreign NGO. - 4. That under Paragraph $7(a)$ of Civil Suit No. 031 of 2023, the High Court is being requested to deregister the NGO and the same Complainants are before the Registrar of Companies seeking to deregister the complainant. - 5. That the complainant is holding out to enjoy a similar name as the respondent and the High Court will be investigating which of these is legally entitled to the name and whether the complainant is legally registered and will determine whether to nullify the respondent's certificate of incorporation. - 6. That one of the key questions to resolve is whether the complainant is legally registered under Sanyu Africa Research Institute the NGO. Not until Court has determined the existence of the entity is when we can know which of the parties is misrepresenting as the true owner of the entity and as such, the Registrar is barred to investigate a matter before Court under Rule 4(1) (b) of the Companies (Powers of the Registrar) Regulations, 2016. - 7. That it is the respondent's submission that the issuance of summons by Courts of Law is recognizance of a matter that is sufficient to bar any other proceedings by the Registrar of Companies and it is my prayer that the same point of law be upheld and if the Registrar is not persuaded, he should have the matter referred to High Court under Rule 33 of the Companies (Powers of the Registrar) Regulations, 2016 for determination of the issues arising because the registrar is not clothed with sufficient capacity to hear and investigate this matter.

- 8. That the registrar of companies has no power to compel a witness to appear and testify since one of the respondent's key witnesses declined to give evidence and under the rules, there's no power to compel a person who has refused to appear to give evidence and only Courts have the mandate. - 9. That the registrar of Companies be pleased to allow the High Court to investigate this matter and give a conclusive decision.

## D. Complainant's Submissions

- 10. That the question for determination before the registrar is the incorporation that was done in bad faith by one of the founding members Dr. James Ditai by leaving out the founding members and bringing on board a new team. - 11. That the major complaint is not addressed in the purported suit of 031 of 2023 and the said suit and parties involved are not party to the proceedings before the registrar of companies. Only 6 people came here to complain and the suit involves 14 people including the National Bureau of NGOs. - 12. That the registrar of companies can rectify the register, expunge them or remove the membership that was adopted by Dr. James Ditai leaving him as a member of the company and adding the other 6 founder member. - 13. That as regards the powers of this Court to hear this matter, **Regulation 4(1) (b) of the Companies (Powers of the Registrar) Regulations 2016** is quite instructive. It talks of a matter which is before court under arrangements and this matter we are talking about Civil Suit No. 031 of 2023 has not yet even been served upon the purported defendants and for that matter it does not qualify as a matter before Court as per Regulation 4. - 14. Furthermore, that the registrar of companies has capacity to hear a matter of any nature as long as it touches issues regarding companies and there's a ruling on file which in our opinion binds the respondent because instead of preferring an appeal, he chose to run to court to file another suit which suit does not concern issues before this court and even when judgment is entered in that suit, the


honorable Court has not been asked either to bring on board the correct team or to have the register rectified.

- 15. That the orders sought in this suit are far different from what is being sought from the registrar of companies and besides, the applicant herein has not demonstrated to this Court that he is likely to suffer any injustice if the matter is heard and determined by the Registrar o Companies and even if he had the fears, the law has provided for a remedy which is an appeal. - 16. It is evident that by the applicant continuing to raise frivolous preliminary objections, is running away from justice and this is hurting the respondent in the preliminary objection and also is just buying time. - 17. That when this matter was initially called, the respondent raised a preliminary objection touching the jurisdiction of the registrar to hear this matter. The contention in that preliminary objection was that there were pending matters before the High Court and the said matters were dismissed with rulings on record. - 18. That the respondents counsel (applicant in this application) for purposes of frustrating the current proceedings has run to file a fresh suit whose summons were signed on 06/06/2023 aware that this matter was coming up for hearing. This matter came up for hearing on $25/05/2023$ and on the morning of that day Counsel served a letter to this office seeking an adjournment but also requesting this office to compel his witness. - 19. That the respondent and its Counsel intentionally dodged the hearing then and the matter was given a last adjournment. It is incumbent on the Registrar of Companies to avoid abuse of its processes and Counsel prayed that Court takes judicial notice that the respondent and its Counsel have been subject of abuse of Court processes in Civil Suit No. 358 of 2021 James Ditai and Sanyu Africa Research Institute Vs Prof. Florence Mirembe, Dr. Benon Wanume, Dr. Sam Ononge, Dr. Emmanuel Tugaineyo and Prof. Andrew Weeks.

- 20. That the registrar is bound to follow principles of natural justice at some stage of his decision making process and in the circumstances the applicant in this Preliminary Objection who is the respondent is clearly running away from proceedings before the Registrar of Companies and it's the complainant's prayer that in the interest of natural justice, these proceedings be heard this being the last adjournment. The respondent was duly served and invited to Court. - 21. Therefore, this preliminary objection should be dismissed with Costs.

#### E. <u>Respondent's Rejoinder</u>

- 22. That the Registrar of Companies is barred by Rule 4 of the Companies (Powers of the Registrar) Regulations, 2016 from presiding over this matter because the questions being addressed by the registrar are the same as those under Civil Suit No. 031 of 2023. - 23. It is the respondent's submission that issuance of summons amounts to an arrangement of hearing before Court because it is only then that the matter will be heard and the previous ruling on the earlier preliminary objections is not applicable since the other was in respect of **Misc. Cause No. 34 of 2022** and the matters raised in that cause are not entirely similar to those under Civil Suit No. 031 of 2023. - 24. That the Registrar of Companies is not bound by the earlier decision on the orders being sought under Civil Suit No.031 of 2023 since Court is going to investigate the legal existence and will do so with a view of dissolution of the complainant herein. - 25. That on the issue of injustice, in the unlikely event that the complaint succeeds, the same will negate **Civil Suit No. 031 of 2023** which shall occasion substantial injustice to the respondent. - 26. That under Article 128 of the Constitution, it is explicit that no authority shall interfere or obstruct a judicial process. These proceedings shall in the unlikely event substantially interfere with the mandate of Court in Civil Suit No.031 of 2023.

- 27. That it is not true that the respondent has acted in the manner detrimental to these proceedings since Court is based suited to investigate the issues between the parties and by the very nature of issues involving fraud, its proper that a court of law be left to proceed with the matter before it. - 28. Counsel prayed that this court be pleased to maintain the preliminary objection or allow the High Court to determine the matter.

#### F. Determination by the Registrar

29. I have considered the submissions of both Counsel

- 30. It is trite that jurisdiction is a term of comprehensive import embracing every kind of judicial action and that the term may have different meanings in different contexts. It has been defined as the limits imposed on the power of a validly constituted court to hear and determine issues between persons seeking to avail themselves of its process by reference to the subject matter of the issues or to the persons between whom the issues are joined or to the kind of relief sought (See: A. G of Lagos State v. Dosunmu (1989) 3 NWLR pt.111, pg. 552 $S$ $C$ ). It therefore means and includes any authority conferred by the law upon the court to decide or adjudicate any dispute between the parties or pass judgment or order. A court cannot entertain a cause which it has no jurisdiction to adjudicate upon. A court must have both jurisdiction and competence in order to be properly seized of a cause or matter. - 31. The issue of jurisdiction was extensively dealt with by the Kenya Court of Appeal in the case of Owners of Motor Vessel Lillian " $s$ " v. Caltex Oil Kenya Limited [1989] KLR 1 in which Nyarangi JA, citing Words and Phrases Legally Defined vol. 3 I-N page 13 held: By jurisdiction, is meant the authority which a court has to decide <u>matters that are before it</u> or take cognizance 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. If no restriction or limit is imposed the jurisdiction is said to be

unlimited. A limitation may be either as to the kind and nature of the actions and matters which the particular court has cognizance or as to the area over which the jurisdiction shall extend, or it may partake both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it had jurisdiction; but, except where the court or tribunal has been given power to determine conclusively whether the facts exist. Where the court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgment is given. (*Emphasis mine*).

32. The Court of Appeal further held that:

Jurisdiction is everything without it; a court has no power to make one more step. Where a court has no jurisdiction there would be no basis for continuation of proceedings pending other evidence. A court of law downs its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.

- 33. Jurisdiction therefore is the power or authority vested in court to "decide matters that are before it" or "to take cognisance of matters in a formal way for its decision." One cannot speak of jurisdiction without the power or authority to make a decision on the merits. To have jurisdiction is to have the power to inquire into the fact, to apply the law and to declare the relief in a regular course of a judicial proceeding. This power or authority may be limited to a specific territory. Hence, "geographical or local jurisdiction" is the territory within which authority is granted to a court to deal with legal matters, to make legal decisions and judgments and to direct justice. - 34. In the instant case, Counsel for the respondent raised another preliminary objection that this Court has no jurisdiction to hear and determine this matter since the same is before the High Court in Civil Suit No.031 of 2023. However, it should be noted that this matter was coming up for hearing on this day. Civil Suit No. 031


was filed in the high Court of Mbale on 06/06/2023 and the same was brought to my attention and the purported respondents on the same day of the hearing.

35. Rule $4(1)(b)$ of the Companies (Powers of the Registrar) **Regulations**, 2016 sets parameters under which the Registrar of Companies of is barred to hear matters before court and I will burden myself to reproduce the regulation as is;

"(b) Civil proceedings shall be deemed to be before court when arrangements for hearing, such as setting down matters for hearing have been made, until the proceedings are ended by judgment, settlement or withdrawal."

- 36. According to Order 9 rule 11 (1) of The Civil Procedure Rules, a suit is supposed to be set down for hearing, after the last of the defences has been filed and in the instant case, Civil Suit No.031 of 2023 had not yet even been served upon the purported respondents and therefore, cannot fall with in the arm bits of **Rule 4(1)** (b) of the Companies (Powers of the Registrar) Regulations, 2016 and the intention of this regulation was to curb such preliminary objections that are based on premature suits before courts. The facts in **Civil** Suit No. 031 of 2023 are also materially different from the facts in the petition before me. - 37. Therefore, the preliminary objection raised by Counsel for the respondents is hereby overruled and the matter is hereby set down for hearing on $22/06/2023$ at 11am. - 38. Each party to bear its own costs.

I so order.

Muliisa Solomon Registrar 15/06/2023