Twelve Sports Rounds Limited v Manirola & Another (Miscellaneous Application 2227 of 2024) [2024] UGCommC 323 (6 November 2024)

Full Case Text

### THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

## [COMMERCIAL DIVISION]

# **MISCELLANEOUS APPLICATION NO. 2227 OF 2024**

# (ARISING OUT OF CIVIL SUIT NO. 1248 OF 2024)

## **TWELVE SPORTS ROUNDS LIMITED**

# T/A 12 SPORTS ROUNDS PROMOTION ]::::::::::::::::::::::::::::::::::::

### **VERSUS**

### 1. MANIROLA FARAHAT AKA KING FALAT "THE NIGHTMARE" | 2. HENRY DDAMULIRA I:::::::::::RESPONDENTS

# Before Hon. Lady Justice Patricia Kahigi Asiimwe

### **Ruling**

### Introduction

- The Applicant brought this Application against the Respondents $1.$ seeking orders that: - a) A temporary injunction doth issue restraining the 1st Respondent from fighting, participating, and or boxing in anv local regional international $\overline{or}$ boxing matches/fights/bouts including but not limited to participating as one of the boxers in a boxing match

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advertised for 9th November 2024 in Dubai, United Arab Emirates pending hearing and disposal of the main suit.

- b) A temporary injunction doth issue restraining the $2^{nd}$ Respondent and his agents, servants, and employees from promoting, organizing, or sponsoring any boxing matches locally in Uganda and or internationally on behalf of the 1st Respondent pending hearing and determination of the main suit. - c) Costs of the application be provided for. - The Application was brought by way of Chamber Summons and $2.$ the grounds of the Application are laid down in the Affidavit deponed by Musoke Rodrick Mugerwa Grace the General Manager of the Applicant. He stated as follows: - That on 1st May 2023 the Applicant and the 1st Respondent $\overline{a}$ entered into a contract under which the Applicant became the sponsor/promoter for commercial gain for 5 years running until 1st May 2028. - b) The Applicant made payments, and financial investments in favour of the $1^{st}$ Respondent through events promotions expenses as per the terms of the contract which payments the 1st Respondent acknowledged. - c) That towards the start of 2024, the 1st Respondent became failed to fulfil key contractual and unresponsive obligations. - d) On or about 3rd July and 3rd August 2024, the Applicant found out that the 2nd Respondent had started holding out and taking responsibilities as a promoter and agent of the

1st Respondent yet the 1st Respondent had an existing contract with the Applicant.

- e) On 12th August 2024, the 1st Respondent sent a letter to the Applicant purporting to terminate the contract yet there were no supervening conditions to terminate the contract as per the contract. - f) On 9th September 2024, the Applicant issued the 1st Respondent a notice for specific performance of the contract. - g) That the 1st Respondent's purported termination of its contract with the Applicant is ineffectual, invalid and unlawful and the Applicant has filed HCCS No. 1248 of 2024 seeking specific performance of the contract entered on $1^{st}$ May 2023. - h) That the $1^{st}$ Respondent is prohibited from engaging in any fights which have not been allowed by the Applicant and yet the 1st Respondent plans to participate in a fight on 9th November 2024 which has not been sanctioned by the Applicant and was slated to fight in a match on 19th October 2024 - i) That the sports world survives on sponsors such as the Applicant who invest millions of shillings to lift boxers and build them up into marketable brands with a view of earning a return on investment. A boxer cannot walk away without first compensating the promoter and if the 1st Respondent continues to fight the Applicant will suffer irreparable loss due to financial loss and reputation damage.

- 3. The Respondents opposed this application through an Affidavit in Reply deponed by the $1^{st}$ Respondent. He stated as follows: - a) That he terminated the contract after noticing unfair, exploitive and unlawful terms which were forced on him by the Applicant taking advantage of his inability to read and fully understand the English language. - b) He never received any payments from the Applicant and that copies of the expenditure sheets were forged as he never authorized anyone to sign on his behalf. - c) By terminating the contract, the status quo changed and the termination notice was lawful. - d) That the contract has an arbitration clause and the matter is wrongly before this Court. - e) He has a pending match scheduled on 9th November 2024 and that granting the Application will alter the status quo and that the participation was not a threat to the Applicant. - f) Boxing is his profession and the only way he earns a living and by participating in the fight he will be in a better position to meet his monetary obligations. - g) Since the contract was terminated the Applicant is entitled to damages and therefore any loss can be covered by an award of damages hence this application should be dismissed. - 4. The Applicant filed an affidavit in rejoinder sworn by Musoke Rodrick Mugerwa Grace. He deponed as follows:

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- a) The $1^{st}$ Respondent has a reasonably satisfactory knowledge of the English language both spoken and written. - b) The Respondent admitted before the $2nd$ Uganda Professional Boxing Commission that he was already acting as an agent and promoter of the 1st Respondent before the termination of the contract. - c) The status quo to maintain is that the 1st Respondent does not fight under any separate promoter, agent or manager other than the Applicant. - d) The arbitration body relied on is non-existent hence the High Court has jurisdiction over the matter. - e) That participating in the match on 9th November 2024 is going to have a negative impact on the 1st Respondent - f) There will be no loss of livelihood to the $1^{st}$ Respondent as the Applicant will continue providing for its boxer.

### Representation

5. The Applicant was represented by $M/S$ Nshekanabo & Partners Advocates & Solicitors and the Respondents were represented by M/S Kayongo Jackson & Co. Advocates and M/s Kagona Advocates & Legal Consultants. At the hearing, both parties made oral submissions.

### Issues

- 6. The issues for resolution are as follows: - I. Whether this Court has jurisdiction over the matter

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II. Whether the Applicant should be granted a temporary injunction against the Respondents

### Resolution

# Issue I: Whether this Court has jurisdiction over the matter

- At the hearing, the Respondents raised a preliminary objection $7.$ that this Court lacks jurisdiction to hear this matter because, under Clause 16 of the contract, provision was made for arbitration of disputes. Counsel relied on Section 5 of the Arbitration and Conciliation Act Cap 5 which provides that a judge or magistrate before whom proceedings are being brought in a matter which is subject of an arbitration agreement shall, if a party so applies after the filing of a statement of defence and both parties having been given a hearing, refer the matter back to arbitration. - Counsel for the Respondent submitted that there is a valid 8. arbitration clause and that this matter is improperly before this Honorable Court and that it should be referred to arbitration. - 9. Counsel for the Applicant submitted that the preliminary obligation was raised late after the Applicant had already made his submissions on the Application therefore, it should not be entertained. He further submitted that the preliminary objection on arbitration should be raised during the hearing of the main suit and not at this stage. Counsel further contended the arbitration is inoperative as the arbitration body is non-existent. - 10. In the case of Nelson Sande Ndungo v Electoral Commission **Election Petition No. 4 of 2006,** it was held that a preliminary objection ought to be raised at the earliest time possible because the determination of it might have the effect of disposing of the

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suit. In that case, the court went ahead and upheld the preliminary objection even though it was raised after scheduling and just before the cross examination of one of the deponents of an affidavit

- 11. In the present case, the point of law raised is one on jurisdiction which is a key issue that has to be resolved before addressing the substantive issues. I note that the issue was also raised in the affidavit in reply and was responded to in the affidavit in rejoinder. The Applicant was therefore aware of the issue even before it was raised at the hearing. I further note that the Applicant still had an opportunity to respond to the preliminary issue and therefore was not prejudiced by the timing of the raising of the issue. I will therefore resolve the preliminary objection. - 12. Under section 6 (1) of the Arbitration and Conciliation Act, Cap 5 it is provided as follows:

# 6. Interim measures by the court.

(1) A party to an arbitration agreement may apply to the $\frac{1}{2}$ court, before or during arbitral proceedings, for an interim measure of protection, and the court may grant that *measure*. [Emphasis added]

13. My understanding of the above provision is that a party to an arbitration agreement may apply to court for an interim measure even before any arbitral proceedings are filed. I therefore find that this court has jurisdiction over the present application. The objection is therefore overruled.

Issue II: Whether the Applicant should be granted a temporary injunction against the Respondents

Page 7 of 13 14. The conditions for the grant of an interlocutory injunction are well settled. First, an Applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the Applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an Application on the balance of convenience. (see American Cyanamid Co v. Ethicon Limited [1975] AC 396, and GAPCO Uganda Limited v. Kaweesa and another H. C. Misc Application No. 259 of 2013)

Prima facie Case with likelihood of success

- 15. The Black's Law Dictionary 8th Edition page 3767 defines prima facie as what is determined "at first sight; on first appearance but subject to further evidence or information." - 16. In the case of Kigongo Edward Nakabale Vs. Kakeeto Rogers & Another Misc. Application No. 144 of 2017, Musene J held that a prima facie case with a probability of success is no more than that the Court must be satisfied that the claim is not frivolous or vexatious. In other words, there is a serious question to be tried. - 17. In the case of Ndungo Seti & Others V Sekiziyivu Sammy Jones & Another Civil Suit No. 286 of 2011 Court held that "Frivolous connotes the absence of seriousness or the lack of validity or legitimacy." The court further held that a vexatious case is oppressive to the opposing party, obstructs the court from gaining a full understanding of the issues and a party acts with an ulterior motive. - 18. In the case of Robert Kavuma vs M/S Hotel International SCCA No. 8 of 1990 Wambuzi CJ as he then was stated that

an Applicant for a temporary injunction is required to show a prima facie case and a probability of success but not success.

- 19. Counsel for the Applicant submitted that the Applicant and the 1st Respondent entered into a contract for 5 years and that the 5 years have not lapsed and that there are triable issues. Counsel for the Respondents submitted that the suit is frivolous and vexatious, and there is no serious question to be tried. - 20. In the main suit, the claim is for specific performance of the contract between the Applicant and the 1st Respondent and an order that the termination of the contract by the 1st Respondent was ineffectual. I find that these are triable issues the suit is not frivolous nor vexatious.

## *Irreparable damage*

21. American Cynamide v Ethicon [1975] 1ALL E. R. 504 Lord Diplock stated that:

> The governing principle is that the court should first consider whether if the Plaintiff were to succeed at the trial in establishing his right to a Permanent Injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the Defendant's continuing to do what was sought to be enjoined between the time of the Application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no Interlocutory *Injunction should normally be granted...*

- 22. It was the Applicant's submission that it has invested money in the 1st Respondent, it is a renowned company in the sports field whose credibility must be protected. Counsel argued that if the 1st Respondent is allowed to disregard the contract; it will set a bad precedent in the sports field as so many players would disregard their contracts leaving the promoters in losses. Counsel cited the case of Madison Square Garden Boxing Ink Vs Shavers, 434 F. Supp. 449 (S. D. N. Y. 1977) where an injunction was granted on the ground that the Applicant's credibility would be destroyed in the eyes of the boxing manager. - 23. Counsel for the Respondent submitted that in the Plaint the Applicant claimed for general damages, aggravated damages, special damages, punitive damages and in the alternative UGX. 1,000,000,000 (One billion shillings). Counsel argued that any injury caused to the Applicant can be recovered through an award of damages and that therefore there is no irreparable damage. - 24. In the case of **Legal Brains Trust (LBT) Ltd V AG Civil** Application No.56 of 2023 Kihika JOA while addressing the issue of irreparable damage held that "... the Applicant has to show that the damage bound to be suffered is such that it cannot be undone. No amount of monetary recompense can restore the injured party to the position he or she was before the damage was visited on the individual." - 25. In the case of Despina Pontikos [1975] EA 38, court held that "interlocutory judgments should only be granted with reluctance and only in very special circumstances." Court also held that "in" general a mandatory injunction as a discretionary relief should not be granted where damages would provide an adequate remedy."

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- 26. In the case Peter Babigamba V Kapkwata Wood Works Ltd CS No. 0714 of 2012 court held that where the applicant has prayed for compensatory remedies, he/she cannot turn around and say that he/she will suffer irreparable damage. - 27. In the present case, I find that the damage the Applicant may suffer if the temporary injunction is not granted is not irreparable as they can be compensated in monetary terms.

## Balance of convenience

- 28. Counsel for the Applicant submitted that the investment of the Applicant is going to be lost if the injunction is not granted. Counsel for the Respondents submitted that the 1st Respondent who is a professional boxer has gotten an opportunity to fight on the international level and that his career is at stake, in addition there are people who have already purchased tickets for the fight. - 29. It was held in the case of GAPCO Uganda Limited Versus. Kaweesa H. C. Misc Application No. 259 of 2013 that "the term balance of convenience literally means that if the risk of doing an injustice is going to make the applicants suffer then probably the balance of convenience is favourable to him/her and the Court would most likely be inclined to grant to him/her the application for a temporary injunction." - 30. In the case of Legal Brains Trust (LBT) Ltd V AG, supra court held that:

...balance of convenience lies more on the one who will suffer more if the Respondent is not restrained in the activities complained of...

- 31. In this case, I find that both parties will suffer injury if the temporary injunction is granted. However, the Applicants will suffer less since they can be compensated in monetary terms. The 1st Respondent on the other hand could suffer irreparable injury as canceling his commitment to fight at such an international event could jeopardize his career as a professional boxer. I also note that spectators have probably already bought tickets for this event. - 32. The balance of convenience therefore lies with the Respondents.

## *Status quo*

- 33. In the case of E. L. T Kiyimba -Kagwa V. Katende [1985] HCB 43 court stated that the grant of a temporary injunction is discretionary whose purpose is to preserve matters in status quo until the questions to be investigated in a suit can finally be disposed of. - 34. The Respondents attached to the Affidavit in reply a termination letter from the 1st Respondent dated 12th August 2024. The Applicant contests the effectiveness of this termination letter however the letter remains valid until court determines otherwise. Therefore, granting the temporary injunction would alter the status quo. - 35. As was held in the case of Mitanda Bakale Masso David Vs. Uganda Revenue Authority M. A. No. 1424 of 2017 where the status quo has changed court cannot issue a temporary injunction as that would have the effect of reversing the status quo. - 36. Counsel for the Applicant cited clause 17.10 of the contract which provides that if the boxer terminates the contract he will

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pay 70% of the money that has been invested in promoting the boxer and must not fight at any event in and out of Uganda until he has fully paid up. The issue of whether or not this money is payable will be determined in the main suit since the Applicant is contesting the validity of the termination letter. I find that it is premature to invoke the provision.

37. In conclusion, therefore, the Application is denied, the costs shall be in the main suit.

## Dated this 6th day of November 2024

Patricia Kahigi Asiimwe Judge Delivered on ECCMIS

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