Sanyu Africa Research Institute (SAFRI) v Sanyu Africa Research Institute (SAFRI) Limited (Petition 9524 of 2022) [2023] UGRSB 17 (28 February 2023)


# THE REPUBLIC OF UGANDA

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

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

### VERSUS

### **SANYU AFRICA RESEARCH INSTITUTE (SAFRI)**

LTD::::::::::::::::::::::::::::::::::::

### RULING ON THE PRELIMINARY OBJECTION

### (Before Muliisa Solomon Registrar of Companies)

### A. Representation

Kasaija Robert and Sharon Murungi appeared for the complainant and *Sam Ononge one of the complainants was present. Eddie Nangulu appeared for the respondent company.* James Ditai and Mwiraguzu Moses member and general secretary of the *respondent company were also present.*

## **B.** Background

1. Counsel for the respondents raised a preliminary objection as to whether the Registrar of Companies is clothed with jurisdiction to hear this matter.

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

- **2.** Counsel for the respondents stated that the registrar of companies is barred from presiding over this complaint because the matters raised are the subject of High Court Miscellaneous Cause No.348 of 2022, Sanyu Africa Research Institute (SAFRI) Ltd Vs the Attorney General, National Bureau of Non-Governmental Organizations. - 3. That the prayers in that suit pertain to the legality of the registration process of the respondent before the High Court. The court is investigating the manner of registration and incorporation of the


respondent company and whether the pronouncement on the incorporation by the National bureau of NGOs is valid or unlawful.

- 4. That according to the affidavit in support of the said application before the High Court, the history of the registration and steps taken are stated before the High Court which is to investigate and determine whether the said process was legal or not and the matter was coming up on $13/02/2023$ before Justice Margret Apiny. - 5. That the complaint before the registrar is inherently similar with facts and raises the same issues that are being determined by the High Court and the same Sam Ononge has deponed affidavits bearing similar facts as his reply in this petition and raising the same issues before the trail Judge that are being raised here. - **6.** That in light of the applications before court, the registrar can't proceed to hear the matter because he is barred by **Rule 4 of the Companies (Powers of the Registrar) Regulations, 2016.**

#### D. <u>Petitioner's Response</u>

- 7. In response, Counsel for the complainants stated that the issues referred to in the Preliminary Objection do not touch the subject matter before the registrar as raised in the complaint. That the reason why the respondent herein went to High Court in Mbale was to challenge the directives issued by the Executive Director of the National Bureau of NGOs, him having given a roadmap to the parties on how to operate. - 8. That the complaint before the Registrar is the Registration of **Sanyu Africa Research Institute (SAFRI) Ltd** by guarantee by one of the founder members of Sanyu Africa Research Institute (SAFRI) the NGO, who opted to register the Company having been found culpable for misappropriation of the organization funds and at the time, he had been entrusted with the post of Executive Director of the organization. - **9.** That as required by the Non-Governmental Organizations Act and as the Executive Director of the organization, he was mandated to carry out registration with the registrar of companies but in utmost bad faith, he registered a company with himself and other members


who were not part of the founding team of Sanyu Africa Research Institute (SAFRI), the NGO.

- **10.** That by doing that, he breached the fiduciary relationship and all issues raised are not in any way presented before High Court in Mbale for the respondent to claim that they are pending determination. - 11. That Regulation 3(e) of the Companies (Powers of the Registrar) **Regulations, 2016,** empowers this office to strike off from the register a company illegally registered. - **12. That Regulation 8(1) gives the registrar mandate to rectify the** register in this case rectification would mean the company remains on the register but the members in the company name be removed, and the right team be brought on board and for this to happen, the law gives the registrar power to look at **Regulation** (8) (1) (a) If information given at registration was (a) misleading, (b) inaccurate, $(f)$ is illegally or wrongfully obtained. - 13. That under Miscellaneous Cause No.348 of 2022, there is nothing that talks about illegality of registration and there is nothing that addresses the issue of the fiduciary relationship that Dr. James Ditai owed to his colleagues as they ran Sanyu Africa Research Institute (SAFRI) the NGO, and the preliminary objection raised does not address that issue. - 14. That it is an omnibus preliminary objection intended to drive the Registrar from the real issues for determination and besides, any ruling that will come from the High Court will never at any time order the company registry to either deregister or rectify the register in its possession and for that matter, the complaint before this office is extremely distinct and ought to be treated differently with the matters pending in court. Annexture " $G$ " of the attachment of affidavit in reply explains the roadmap that was given by the National Bureau of Non-Governmental Organizations - 15. That the promoter's page on the constitution page was signed by James Ditai and Sam Ononge in 2013 but the in document registered by the respondent company Sam Ononge vanishes with no


resolution removing him from the organization and this aspect is not a subject of trial in **Miscellaneous Cause No.348 of 2022**.

- 16. The Non-Governmental Organizations Act 2016 requires the NGOs that were registered under the old law to proceed and incorporate companies limited by guarantee. The executive director then, of SAFRI the NGO had a duty in the proper running of the organization to ensure that it's operating within the new law. - 17. That the matter before the registrar is that non members of SAFRI the NGO registered in 2013 as an NGO, came to the company registry in 2021 and registered a company limited by guarantee using the NGOs name without authorization from members of SAFRI the NGO. - **18.** Counsel for the complainants made a prayer that the preliminary objection be overruled and dismissed with costs because the matters before this honorable office are about registration of wrong parties and the right ones should have been the original founder members of SAFRI the NGO, where the current executive director of SAFRI the company limited by guarantee was also a founder member of SAFRI the NGO.

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

- 19. In rejoinder, Counsel for the respondent stated that according to the complaint filed on 26/07/2022, the complainant stated that the complaint concerns illegal registration of SAFRI limited by guarantee. That before the NGO Bureau, a similar issue arose; two constitutions dated $20/09/2013$ were in dispute, the 1<sup>st</sup> constitution was signed by 15 members while the other was signed by only $2$ members that is James Ditai and Sam Ononge. During the hearing before the NGO Bureau, an issue arose which of the two is valid as both had a stamp and signature of the NGO board. The physical file had 15 members yet the one on the IT system had another constitution, a hearing was conducted to determine which one of the two was legitimate and having the founder members. - 20. That unfortunately in the said proceedings, the NGO Bureau denied entry to the 14 members and went on to hear the matter, and the


question before the NGO bureau was, which of the members are legitimate. The NGO Bureau imposed members and directors without following due process and declared the registration of the respondent illegal.

- 21. That **Miscellaneous Application No.348 of 2022** is before court for judicial review against the entire directive. That orders 1 and 2 seek to nullify the decision by the NGO Bureau imposing the nonmembers, order 6 and 7 seek a declaration that the recognition of these members was illegal, order 10 seeks a pronouncement on the order that incorporation of the company was irrational, illegal and all those form a subject of trial and determination before court. - 22. That the persons complaining claim to be members excluded from the respondent company and their membership and decision that confirmed them as members is before the High Court. - 23. That if the registrar of companies must answer the question whether they are members or not. He or she would be determining orders 6 and 7 of Miscellaneous Cause No.348 of 2022 further, if this honorable office pronounces itself on whether the registration is legal or illegal would be answering **Order No.10 of Miscellaneous** Cause No.348 of 2022. - 24. That on 25/08/2022, the High Court in Mbale issued an Interim Order forbidding the complainants herein from executing any activity regarding the respondent company or in any way restricting the activities of the respondent's board of directors as per their company Form 20. These proceedings are in contempt of this order, the complaint pertains to the legality of the incorporation of the respondent and the complainant seek to affect the register to include the complainants' members as members in the respondent, that there are two key issues that pertain this complaint; - a) legality of registration and membership of the respondent company which are subject of **Miscellaneous Cause No.348 of 2022** specifically orders 1,2,6,7,8 and 10. That Regulation 4 of The **Companies (Powers of the Registrar) Regulations, 2016 prohibits** the registrar from hearing a matter before the court of law. As


observed, the complainant alleges that the respondent was registered fraudulently and the fraud is premised on the existence of two constitutions and the registrar has no capacity to investigate fraud, signatures on the two constitutions or determined which one occurred first in time.

- b) This investigation requires a rigorous trial and forensic examination to determine the actual fraud star in this equation and its befitting that this complaint be dismissed and the High Court to determine the application. On 31/08/2022, the complainants sought to be joined to Miscellaneous Cause No.348 of 2022 because they intended to raise the same issues of fraud before the Judge and the Judge dismissed the application but can appeal. - 25. The respondent made a prayer that this office be pleased to dismiss the matter with costs. - 26. That the unjustified suspension on the file be lifted because the respondent is mandated to fulfill their statutory obligations for example filing resolutions, returns, beneficial ownership forms etc.

#### F. <u>Determination by the Registrar</u>

- 27. Considering the complainants and respondents submissions, I will proceed to determine the raised preliminary objection by Counsel for the respondent. Counsel for the respondent raised a preliminary objection as to whether the registrar has jurisdiction to hear this matter. - 28. The Black's Law Dictionary 8<sup>th</sup> Edition at Page 867 defines jurisdiction as;

"*The power to decide a case or issue a decree (order)*".

29. In Desai Vs Warsama [1967]1EA 31 at Pages 2-3 court held that; "No officer can confer jurisdiction upon himself to hear and determine any *proceedings; such jurisdiction must be conferred by a superior legislative body having the power to do so...(that) jurisdiction is a matter of fact and* not of opinion...(and) it is well established law that a judgment without *jurisdiction is a nullify"*

 - 30. On 26/07/2022, we received a complaint from the respondents concerning registration of the respondent with a prayer that the registration of the respondent be recalled and the name **Sanyu Africa Research Institute (SAFRI) Ltd be removed from the register** $\mathbf{O}$ f companies. The complainants are Non-Governmental Organization registered with the National Bureau of NGOs on $20/09/2013$ , and have been operating as an NGO since then. - 31. On 22/12/2021, one of the former members of Sanyu Africa Research Institute (SAFRI) the NGO together with other members not part of the NGO registered a company Limited by guarantee with Uganda Registration Services Bureau using a similar name to that of the NGO where he was formerly a member. - 32. Earlier, the legality of both parties came up before the Executive Director of the National Bureau of NGOs and on 3/08/2022, he ruled in favor of the complainants in this matter by legitimizing their constitution over that of the respondents and also stated that Uganda Registration Services Bureau should take note of the illegally incorporated Sanyu Africa Research Institute (SAFRI) Ltd by Dr. James Ditai and note the rightful individuals in the organization and further investigate the irregularities involved in the incorporation of the company. - 33. The respondent appealed this decision in Mbale High Court under Miscellaneous Cause No.348 of 2022 Sanyu Africa Research Institute (SAFRI) Ltd Vs the Attorney General and the National **Bureau of Non-Governmental Organizations** seeking for orders that: - 34. I will single out those relevant to this matter - $i)$ A declaration that the proceedings/hearings conducted by the national bureau of NGOs from the 23/03/2022 to 3/08/2022 in respect of the applicant entity are illegal, null and void ab nitio for want of the pre-requisite statutory jurisdiction. - A declaration that the resultant decision/directives/resolutions ii) entered and/ or issued by the Executive Director of the $2^{nd}$


respondent in respect of the application are illegal, null and void ab nitio for want of the pre-requisite statutory jurisdiction.

- vi) A declaration that the directive/decision issued by the executive director of the $2^{nd}$ respondent on 03/08/2022 sanctioning, recognizing and $\sqrt{or}$ acknowledging the memoranda, concessions, understanding and resolutions allegedly entered by Andrew Weeks Florence Mirembe, Sam Ononge, Jonathan Wangisi, Julius Wandabwa, Milton Musaba, Obbo Steven, Otim Tom Charles and Musa Sekikubo the illegitimate members in respect of the applicant is illegal, null and void ab nitio. - vii) A declaration that the directive /decision issued by the executive director of the 2<sup>nd</sup> respondent recognizing, acknowledging and /or ratifying the appointments of Andrew Weeks Florence Mirembe, Sam Ononge, Jonathan Wangisi, Julius Wandabwa, Milton Musaba, Obbo Steven, Otim Tom Charles and Musa Sekikubo the board members of the applicant entity is irrational, unreasonable, illegal, null and void ab nitio. - viii) A declaration that the directive/ decision issued by the Executive director of the $2<sup>nd</sup>$ respondent sanctioning, clearing and/or permitting the aforesaid board members to represent the applicant entity is irrational, unreasonable, illegal, null and void ab nitio. - A declaration that the pronouncement of the incorporation of the $\mathbf{x}$ ) applicant as a company limited by guarantee was irrational, unreasonable, null and void ab nitio. - 35. On 25/08/2022, Sanyu Africa Research Institute (SAFR) Ltd in Miscellaneous Application No.349 of 2022 obtained an interim order against the Attorney General and the National Bureau of Non-Governmental Organizations forbidding them from, their agents, employees and all other persons acting under their authority from in any way interfering, prohibiting or restricting the applicants' legitimate board of directors as per company form 20 from conducting the lawful activities and bank account transactions

on behalf of the applicant pending the determination of miscellaneous application No.348 of 2022.

- 36. The matter before me pertains similarity of name between the complainant and the respondent as reflected in the complaint dated $26/07/2022$ filed by the complainants wherein, they stated under *paragraph* 5 that the continued existence of the respondent on the company register is causing confusion to the complainants' organizational beneficiaries and the general public and that the directors of the respondent have gone ahead to purport to be members of the complainant with intention to defraud their funders. - 37. Sections 37 to 40 of the Companies Act and Regulation 17 of the **Companies** (General) Regulations, 2016, give mandate to the registrar of companies to handle a matter concerning similarity of names and provide for remedies thereto. - 38. The matter before me is intertwined with aspects of similarity in name and legality of the respondent. - 39. The Executive Director of the National Bureau of NGOs pronounced himself on the legality and composition of the respondent and his decision was appealed in Miscellaneous Cause No.348 of 2022 which is before court for determination and therefore, I cannot pronounce myself on the same. - 40. Therefore, that leaves me with only the aspect of similarity in the name that the respondent used to incorporate. - 41. On $22/12/2021$ , the respondent incorporated a company limited by guarantee in the name of Sanyu Africa Research Institute (SAFR) Ltd which is being disputed by Sanyu Africa Research Institute (SAFRI) an NGO which is registered with the National Bureau of NGOs under Registration No.10170 on 20/09/2013. - 42. The respondents do not dispute the existence of the complainant as an NGO registered with the NGO Bureau and also that some of the members of the respondent are former members of the complainant and therefore are aware of the existence of the complainant.


- **43.** Therefore, the registrar of companies is vested with jurisdiction to hear a matter pertaining similarity of name which is the subject of dispute between the parties and issues pertaining legitimacy of members in the parties as per the above cited orders' sought in Miscellaneous Cause No.348 of 2022 are before court and I have no jurisdiction to pronounce myself on the same as per **Regulation 4(1)** $\frac{1}{2}$ of the (Companies Powers of the Registrar) Regulations, 2016 - 44. On $17/01/2023$ , I received a complaint from the respondent through a letter referenced; complaint regarding the irregular and illegal suspension of account activity for Sanyu Africa Research Institute (SAFRI) ltd wherein the respondent claimed that it was never notified under what circumstances or upon what criteria its activities were suspended at URSB. - 45. It is not in dispute that there is a pending petition between the parties filed by the complainant on $26/07/2022$ regarding issues to do with the name Sanyu Africa Research Institute (SAFRI) and this petition has not yet been fully heard and disposed off. Therefore, company activities of Sanyu Africa Research Institute (SAFRI) Ltd were suspended at inception of hearing this petition so that the petition is heard and determined in a manner which is fair to both parties and to avoid alteration of any evidence on record which may be relevant to the proceedings. - **46.** Therefore, owing from the above, I make the following orders; - a) The registrar has jurisdiction to hear and determine a matter concerning similarity of name which is one before me. - b) The issues of legitimacy and composition of the parties are before court and I have no jurisdiction to pronounce myself on the same. - c) The company activities of the respondent remain suspended until the matter is fully heard and disposed off on its merits. - d) Each party to bear its own costs

I so order.


**Muliisa Solomon**

Registrar

28/02/2023