Eastern Cargolines Consults Limited and Another v Rjf International (pty) Limited and 3 Others (Miscellaneous Application 611 of 2012) [2021] UGCommC 162 (9 April 2021)

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA SITTING AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION No. 0611 OF 2021

5 (Arising from Civil Suit No. 0818 of 2020)

| 1. | EASTERN CARGOLINES CONSULTS LTD | } | | |----|----------------------------------|---|------------------| | 2. | PORTLAND FREIGHTERS TANZANIA LTD | } | …………… APPLICANTS |

VERSUS

10 1. RJF INTERNATIONAL (PTY) LTD } 2. FORSDYKE RUSELL JOHN } ……………………… RESPONDENTS 3. UGANDA REVENUE AUTHORITY }

4. MEDISEL (U) LIMITED }

15 Before: Hon Justice Stephen Mubiru.

*EX TEMPORE RULING*

Counsel has applied for extension of the interim injunction order issued by the learned Assistant

- 20 Register pending the disposal of the main application. According to rule 3A of *The Civil Procedure (Amendment) Rules, 2019,* an *ex parte* interim order is granted only in exceptional circumstances and for a period not exceeding three days from the date of issue. Upon hearing of the substantive application, the order lapses. Its lifespan can only be extended when the applicant files proof of service on the opposite party before lapse of the three says (see rule 3A (6) and (7). In the instant 25 application, no such proof has been furnished, hence the interim injunction lapsed after the three - days and cannot be extended.

Instead, it has been established by the law and the decided cases that, the main purpose for issuance of an interim injunction order is the preservation of the suit property and the maintenance of the *status quo* between the parties pending the disposal of the main application. The conditions that

30 have to be fulfilled before court exercises its discretion to grant an interim injunction have been well laid out as the following:-

- 1. The applicant must have a pending substantive application with a likelihood of success. - 2. The matter is urgent in nature such that there is likelihood of the applicant suffering irreparable damage which would not be adequately compensated by award of damages. - 3. There is a real threat or danger that cannot be eliminated by an expeditious hearing of the 5 main application. - 4. Where in doubt in respect of the above three considerations, then the application will be decided on a balance of convenience (see *Fellowes and Son v. Fisher [1976] I QB 122*).

These principles are to a large extent similar to those that guide the grant of interlocutory injunctions which can be found in such cases as *American Cyanamid Co v. Ethicon Limited [1975]* 10 *AC 396*; *Geilla v. Cassman Brown Co. Ltd [1973] E. A. 358* and *GAPCO Uganda Limited v. Kaweesa and another H. C. Misc Application No. 259 of 2013*.

What amounts to a prima facie case, was explained in *Godfrey Sekitoleko and four others v. Seezi Peter Mutabazi and two others, C. A. Civil Appeal No. 65 of 2011 [2001 – 2005] HCB 80* that what is required is for the court to be satisfied that the claim is not frivolous or vexations, and that there 15 are serious questions to be tried. In the present case, the applicant claims to have delivered goods as a transporter for which it did not receive payment. Therefore, there are serious questions to be tried as to whether the applicant is entitled to recover payment from the respondents.

The next question for court to determine is whether the applicants will suffer irreparable damage if the injunction does not issue. Irreparable damage has been defined by *Black's Law Dictionary*, 9 th 20 Edition Page 447 to mean "damages that cannot be easily ascertained because there is no fixed pecuniary standard of measurement*.*" It has also been defined as "loss that cannot be compensated for with money" (see *City Council of Kampala v. Donozio Musisi Sekyaya C. A. Civil Application No. 3 of 2000*).

The purpose of granting an interim injunction is for preservation of the parties' legal rights pending 25 litigation, but in exceptional cases. The court doesn't determine the legal rights to the property but merely preserves it in its current condition until the legal title or ownership can be established or declared. If failure to grant the injunction might compromise the applicants' ability to assert

their claim in case of a decision in their favour, there is a very high likelihood of occasioning a loss that cannot be compensated for with money.

In this case, the possibility of irreparable loss has been established as a real probability rather than a mere possibility in the event that the property is sold, transferred, disposed of, encumbered or in

5 any other manner alienated before determination of the suit. Such eventuality will compromise the applicant's ability to recover its fees or charges, since there are no other known assets.

A real threat or danger is constituted by actual and imminent threat or a physical danger that is real, would occur within an immediate time frame, and could result irreparable loss before the imminence of such danger can be eliminated by an expeditious hearing of the main application. In

10 determining whether the circumstances pose an actual and imminent threat, the factors to be considered include: The duration of the risk, the nature and severity of the potential harm, the likelihood that the potential harm will occur, and the length of time before the potential harm would occur.

In the instant case, according to section 57 of *The East African Community Customs Management* 15 *Act, 2004*, the maximum period for which goods as are in issue in this case may be warehoused is nine months, upon the expiry of which they may be sold by public auction after one month's notice of such sale by the proper officer by publication in such manner as the Commissioner may deem fit. The goods in issue have been warehoused for over two years in the instant case. That the danger of disposal under that provision is imminent is thus not in serious doubt if not prevented by a 20 restraining order of this court.

Since the above three conditions have been met, it is not necessary to consider the last factor which is the balance of convenience except for purposes of determining how extensive the ambit of the restraint imposed should be. I have considered the threat posed by the respondents which threat is largely limited to selling, transferring, and disposing off or through other ways alienating or 25 creating encumbrances over the property. I consider this to be the extent of damage or injury which cannot be readily quantified in monetary terms or which cannot generally be cured by an award of damages.

For purposes of preserving the *status quo*, an interim injunction is hereby issued restraining the respondents, their agents, workers, tenants or persons claiming under them, from removing, auctioning selling, transferring, disposing off or through other ways alienating or creating encumbrances over the property stored in the specified shipping containers until the final disposal

5 of the application for a temporary injunction. The costs of this application shall abide the outcome of the main application.

…………………………….. Stephen Mubiru Judge 9 th 10 April, 2021. 10.40 am.