Mona International Cargo & Management Company Limited & 4 Others v Stanbic Bank Uganda Limited (Miscellaneous Application 2982 of 2023) [2025] UGCommC 24 (12 March 2025)

5 THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION 2982 OF 2023

(ARISING FROM CIVIL SUIT NO. 0582 OF 2023)

- 10 1. MONA INTERNATIONAL CARGO AND MANAGEMENT COMPANY LIMITED - 2. SSEMAMBO JAMES - 3. NUWASASIRA WINNIE - 4. KANZIRA MOSES - 15 5. NKOKO BOAZ ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANTS

VERSUS

STANBIC BANK UGANDA LIMITED :::::::::::::::::::::::::::::::::::::::::: RESPONDENT BEFORE HON. LADY JUSTICE HARRIET GRACE MAGALA

RULING

20 Background and introduction

This Application arises from a summary suit instituted against the Applicants by the Respondent. The Respondent's claim in the Main suit was for the recovery of Ugx. 255,559,572/= plus interest arising from an invoice discounting loan granted by the Respondent to the Applicants. A default judgment was entered against the

Respondents by this court on the under Order 36 rule 3(2) of the CPR on the 25th 25 September 2023 for the payment of Ugx. 242,842,363/= and interest at a rate of 18% p.a on the outstanding sum from the 30th April 2021 until payment in full. This application seeks to set aside the default judgment and grant the Respondents unconditional leave to defend the main suit.

Upon the first summons expiring, this court issued fresh summons on the 11th 5 August 2023.

Application

This application was brought under section 98 of the Civil Procedure Act Cap 71 (now Cap 282), Order 36 Rule 11 and Order 52 Rules 1 & 3 of the Civil Procedure

10 Rules S. I No. 71-1 in which the Applicants sought for orders that:

- 1. The default judgment and decree in Civil Suit No. 0582 of 2023 be set aside; - 2. The Applicant be granted unconditional leave to appear and defend the suit; - 3. The execution of the decree and any orders in Civil Suit No. 0582 of 2023 be set aside; and - 15 4. The costs of this application be provided for.

The grounds of the applications were contained in the affidavits in support sworn by the 2nd Applicant on behalf of the 3rd and 4th Applicants as Directors of the 1st Applicant company, the 5th Applicant and Mr. Okiria John Paul, the Managing Partner of M/s Leadman Advocates.

20 The Respondent opposed the Application through the affidavits in reply sworn by George Kahemura, a process server of the High Court of Uganda of the Respondent's law firm, and Negombye Emmanuel Kisakye, the Respondent's Relationship Manager.

The 2nd Applicant deposed an affidavit in rejoinder.

25 This court has considered the parties' pleadings and annextures in its decision.

Appearance and Representation

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5 The Applicants were first represented by M/s Leadman Advocates and later by M/s Novus Advocates while M/s H&G Advocates represented the Respondent.

Issues for determination

- 1. Whether there are sufficient grounds to grant this application - 2. What remedies are available for the parties?

10 Determination

The law on setting aside a decree issued in default by a Defendant to apply for leave to appear and defend the summary suit is provided under Order 36 Rule 11 of the Civil Procedure Rules S. I. No. 71-1 as amended. It states that:

*"After the decree the court may if satisfied that the service of the summons* 15 *was not effective, or for any other good cause, which shall be recorded, set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the court so to do, and on such terms as the court thinks fit."*

20 I shall first deal with the objection raised by the Applicants that the Respondent did not serve them with the amended summons and plaint. According to the Court record, the name of the 1st Applicant was initially documented as Mona Cargo and International Company Limited instead of Mona International and Cargo Management Company Limited. The Respondent realized this mistake and 25 immediately brought it to the attention of the court. They filed an amended plaint and requested the court to issue amended summons reflecting the change. The only amendment made to the plaint was the name of the 1st Applicant/ 1st

- 5 Defendant. The rest of the substance of the specially endorsed plaint remained the same. This is a case of misnomer where the name was miswritten. The name of the party is not entirely wrong. The doctrine of misnomer applies where: (1) the author intended to name the subject to whom the name is now being attributed and (2) a reasonable person would attribute the name to the person to 10 whom it is now intended to be attributed. Misnomer arises when the author merely misnames the correct person as opposed to not being able to identify the correct person. The Respondent / Plaintiff filing the main suit with the 1st Defendant as Mona Cargo and International Company Limited instead of Mona International and Cargo Management Company Limited was an inconsequential - 15 deficiency or technicality which can be rectified and was indeed rectified as soon as the Respondent/ Plaintiff came to that realization.

It was the averment and submission of the Applicants that service of court process was ineffective. The affidavit of service deposed by George Kahemura was very detailed on the efforts he made to make the Applicants aware of the

- 20 suits (HCCS No. 0581/2022 and HCCS No. 0582/2022) that were brought against the Applicants/ Defendants by the Respondent/Plaintiff. It is important to note that the affidavit of service covered service of summons and specially endorsed plaints in the suits mentioned above. The Parties are the same in both suits, but the difference is in the nature of the claim against the Defendants. - 25 The Applicant is a body corporate, therefore the law applicable on service of summons on corporations is Order 29 Rules 1 & 2 of the Civil Procedure Rules which provides that:

*"1. Subscription and verification of pleadings*

5 *In a suit by or against a corporation any pleading may be signed on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.*

*2. Service on corporation*

*Subject to any statutory provision regulating service of process, where the* 10 *suit is against a corporation, the summons may be served-*

> *(a) on the secretary, or on any director or other principal officer of the corporation; or*

*(b) by leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office, then at the place where* 15 *the corporation carries on business."*

In the case of *M/s Semuyaba, Iga & Co. Advocates & Another vs. The Attorney General of the Republic of South Sudan & 2 Ors. HCMA No. 4 of 2022,* Hon. Justice Stephen Mubiru stated that service of process must be made on a

recognized agent of the corporation to constitute valid personal service on a

20 principal. Service on an administrative assistant, receptionist, secretary, part-time hourly worker, or other employee who is not a registered or recognized agent for receipt of process, may not satisfy the personal service requirement, regardless of whether the Defendant received actual notice of the suit.

The Companies Act, Act 1 of 2012 defines a director as *"to include any person* 25 *occupying the position of director by whatever name called and shall include a shadow [director](https://ulii.org/akn/ug/act/2012/1/eng@2015-07-01#defn-term-shadow_director)".* The Companies Act does not have a definition of a principal

5 officer but it defines an officer as "*in relation to a body corporate to include a [director,](https://ulii.org/akn/ug/act/2012/1/eng@2015-07-01#defn-term-director) manager or [secretary](https://ulii.org/akn/ug/act/2012/1/eng@2015-07-01#defn-term-secretary)"*

A principal in law can be defined as a person with controlling authority or leading position. The Companies Act does not define a secretary. Still, under sections 187,188, and 190, it mandates every company to have a secretary, sets out who

- 10 can and cannot be a secretary, and guides on the qualifications of a company secretary, especially for public companies. A secretary can be a person or body corporate that the directors appoint to carry out the duties and functions of a secretary, key among which is to ensure that the organization complies with existing relevant legislations and regulations; and keeps members of the board - 15 informed of their legal responsibilities.

In the case of Kyambogo University vs The Heights Ltd, Miscellaneous

Application No. 0954 of 2015, it was the defence of the Respondent that service onto the Applicant was effected and therefore deemed effective when the summons to file a defence were served onto a clerical secretary of the Applicant 20 and stamped. The Learned trial judge, Christopher Madrama Izama, J (as he then was) held that:

*"In the premises, service was effected on a person who was not authorized and to make matters worse, the summons and copy of the plaint was not brought to the attention of an authorized person in time. In the premises,* 25 *there was no good service on the Applicant and the interlocutory judgment entered by the Registrar on the 2nd October 2015 is hereby set aside".*

In the case of *David Ssesanga vs. Greenland Bank Ltd (In Liquidation) HCMA No. 406 of 2006,* it was held that effective service must produce the desired effect,

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5 which is to make the Defendant aware of the suit. Further, in the case of Geoffrey Gatete and Anor vs. William Kyobe SCCA No. 7 of 2005, effective service of summons was defined as a service that produces the desired or intended result. The desired and intended result of serving summons on the defendant in a civil suit is to make the defendant aware of the suit brought against him so that he can 10 respond to it by either defending the suit or admitting liability and submitting to judgment.

It was the evidence of the Respondent that the process server managed to trace the 4th Applicant, a director in the 1st Applicant, who then asked him (the process server) to take the summons and plaint to M/s Leadman Advocates. In my

considered view, when the 4th Applicant as a director of the 1st 15 Applicant received the summons and plaint and thereafter handed them back to the process server without endorsing them and instructed him to serve them onto M/s Leadman Advocates, the 1st Applicant was made and became fully aware of the suit. The time within which to file a reply started ticking at that point. The 4th Applicant was an authorized agent of the 1st 20 Applicant within the meaning of the law.

The defence being raised by the Applicants and their legal counsel that they could not act on the matter because they did not have instructions is not tenable. Such an argument would have been upheld if the 4th Applicant was not a director of the 1 st Applicant within the meaning of the Companies Act and Civil Procedure Rules 25 as already cited above. In the case of Dr. B. B Byaruhanga v Alisson Kantarama HCMA 229/2019 the court held that service on an agent is effective service only if the agent is empowered to accept service. However, service on an advocate without instructions to conduct a matter on a client's behalf is ineffective. See

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Green Meadow Limited v Patrice Namisono HCMA 1368/2022. The time within $\mathsf{S}$ which to apply for leave to appear and defend did not start running when the 2^nd Applicant instructed M/s Leadman Advocates to handle the matter, and upon depositing the legal fees on the 29th October 2023, after the 2^nd Applicant is alleged to have returned from Kenya. The time to apply for leave to appear and defend started running when the 4^th Applicant and Director in the 1^st Applicant $10$ received the summons and specially endorsed plaint. I have also observed that

the Court record only shows that the 2^nd Applicant adduced evidence that he exited Uganda via Busia and entered Kenya on the same day of 12^th August 2023. He conveniently did not attach proof to his affidavit supporting the application as to when he travelled back to Uganda. 15

I therefore find that service of the summons and specially endorsed plaint upon the Applicants was effective. This application is hereby dismissed with costs to the Respondent. The default judgment entered against the Applicants under Order 36 rule 3(2) of the CPR in HCCS No. 0582 of 2023 is hereby upheld.

Dated and signed at Arua this 12^th day of March 2025. $20$

udagare

Harriet Grace MAGALA

Judge

Delivered online (via ECCMIS) this 12^th day of March 2025.

$25$