Senono v Uganda Revenue Authority (Miscellaneous Cause 52 of 2024) [2024] UGCommC 321 (25 October 2024)

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MC. 0052 OF 2024

AND

IN A MATTER OF PROOF OF OWNERSHIP OF GOODS VIDE BILL OF LADING NO. AMC 2113963, CONTAINER NO. APZU3582603

SENONO ARNOLD ::::::::::::::::::::::::::::::::::::

VERSUS

UGANDA REVENUE AUTHORITY::::::::::::::::::::::::::::::::::::

Before Hon. Lady Justice Patricia Kahigi Asiimwe

Ruling

Introduction

- This application was brought under section 98 of the Civil Procedure $\mathbf{1}$ Act and Order 52 Rule 1, 2 and 3 of the Civil Procedure Rules seeking that: - a) An order be granted directing the Respondent to clear and release the Applicant's goods comprised in the bill of lading No. AMC2113963, container No. APZU3582603 amounting to 1620 rolls of 100 meters each of electrical cables currently warehoused at Maina Inland Container Depot (ICD) bonded warehouse, subject to the Applicant paying any outstanding taxes to the Respondent. - b) Each party bears its own Costs. - $2.$ The Application is supported by an an affidavit sworn by the Applicant Arnold Senono who stated that: - a) On the 11^th day of October 2023, he purchased goods comprised in bill of lading No. AMC2113963 Container No. APZU3582603 from the consignee Edison International and all documentation

concerning the goods were handed over to him in order to be able to clear the goods.

- b) Upon the goods reaching Mombasa port, they were transported to Kampala and warehoused at Maina Bond pending clearance with the Uganda Revenue Authority. - c) While the goods were at the warehouse, the Applicant formally requested that the goods be cleared; however, the Respondent without any justification, declined to clear the said goods. - d) The Respondent's continual holding of the goods has led to increased demurrage fees and substantial financial losses. - The Respondent filed an affidavit in reply sworn by Christine $3.$ Mpumwire, a legal officer, of the Respondent who stated that: - The Applicant has no standing to institute the application. $\overline{a}$ - The Applicant is not known to the Respondent, and there is no $b)$ documentary transaction by way of customs entry generated for the importation of goods, which is comprised in bill of lading No. AMC2113963 Container No. APZU3582603 in the names of the Applicant. - According to the Respondent's Asycuda system, $c)$ Edison International Group, located in Kireka, Uganda, is the consignee and the legal owner of goods. - The Respondent has not received any communication from the $d)$ legal owner/consignee of the goods of the alleged sale of the consignment to the Applicant. - The Respondent does not have the powers to release the goods $e)$ to the Applicant however the legal owner Edison Group International has the powers.

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- On 28^th October 2023, customs officers of the Respondent in $\mathbf{f}$ charge of Kenya Operations received communication from Kenya Port Authority that Container No. APZU3582603 bound for Main ICD in Uganda was fraudulently cleared and Kenya Port Authority requested that the Respondent holds onto the consignment until it receives guidance from Kenya Port Authority. - The communication from Kenya Ports Authority indicated that $g)$ the Applicant had fabricated the particulars and documents from Edison International USA and that the shipper had not been paid for carriage services. - h) The Consignee of the goods has not informed the Respondent of the transfer of ownership nor initiated the transfer of ownership through the legally recognized procedure under the East African Community Customs Management Act, 2004. - The Respondent has publicly communicated in written and $i)$ digital media through the taxation handbook the procedure of transfer or change of ownership, and the Applicant ought to be aware of this procedure. - $i)$ The Respondent is obligated under the East African Community Customs Management Act 2004 and regulations through cooperation and reciprocity to work with Kenya Ports Authority and other states to prevent fraudulent transactions. - The Applicant in rejoinder stated that the goods were imported under $4.$ Cost, Insurance, and Freight from India to the port of Mombasa and the consignee upon receiving the bill of lading is at liberty to deal in the goods as they deem fit and upon being handed over the bill of lading, property in the goods passed to the Applicant.

Representation:

The Applicant was represented by Tenax Advocates and the $5.$ Respondent was represented by its Legal Services and Board Affairs Department. Both parties filed written submissions.

Issues:

- The issues for resolution are as follows: $6.$ - Whether the Applicant is entitled to an order releasing the goods $\mathbf{I}$ . comprised in bill of lading No. AMC2113963, container No. AMC 21139633, container No. APZU3582603 amounting to 1620 roils of 100 meters each of electrical cables warehoused at MAINA ICD bonded warehouse. - What remedies are available to the parties? $\mathbf{II}$ .

Resolution

*Preliminary objection:*

- Counsel for the Applicant raised a preliminary objection that the $7.$ affidavit of the respondent is defective because it was sworn by an advocate. - In the Supreme Court case of Mbarara Municipal Council Vs. Jetha 8. Brothers Ltd MA. 10 of 2022 it was held that affidavits "can be sworn" by anyone to prove a set of facts and an advocate is not an exception." The court further held that an advocate is not prohibited from swearing an affidavit where necessary, especially on matters well within his or her knowledge. - 9. Counsel for the Applicant also submitted that the deponent of the affidavit in reply did not attach evidence to show that she was given authority to swear the affidavit. Counsel cited the case Mugova Construction & Engineering Ltd V. Central Electricals HCMA No. 699 of 2011. However, in that case, the party in issue was a private company which is not the case in the present case.

10. The deponent stated in her affidavit in reply that she is a legal officer in the Respondent company and that she is conversant with the facts of the case. An affidavit should be sworn by someone who has knowledge of the facts of the case. In this case, this is a legal matter, and an officer in the legal department is best placed to swear the affidavit. The fact that the deponent is an employee of the Respondent is evidence enough that she is authorised to swear the affidavit on behalf of the Respondent unless evidence is adduced to the contrary.

The preliminary objection is overruled.

*Issue I: Whether the Applicant is entitled to an order releasing the goods* comprised in bill of lading No. AMC2113963, container No. AMC 21139633, container No. *APZU3582603* amounting to 1620 roils of 100 meters each of electrical cables warehoused at MAINA ICD bonded warehouse.

- 11. Counsel for the Respondent submitted that the Applicant is not the legal owner of the goods since he is not the consignee on the Bill of Lading. Counsel submitted that the consignee on the Bill of Lading is Edison Group International and is the legally recognized owner of the goods. The Applicant, on the other hand, argues that it purchased the goods from Edison Group International and attached a sales agreement dated 11^th October 2023 to his affidavit in support of the application. - 12. Counsel for the Respondent argued that a sale agreement does not meet the requirements for a change of ownership under the tax laws. Counsel submitted that the Respondent is bound by the provisions of the East African Community Customs Management Act, 2004 and Regulations which prescribe the procedure for transfer of ownership. Counsel further argued that without following the required legal procedure, the Applicant cannot legally be recognized as the owner of the goods. Counsel cited Section 51(1) (c) of the East African Community Customs Management Act and Regulation 71 of the East African Community Customs Management Regulations.

- 13. Under section 1 of the Sale of Goods and Supply of Services Act Cap 292, a bill of lading is a document of title to goods. In the case of Rahima Nagita & 2 Others. Vs. Richard Bukenya & 3 Others. Civil Suit No. 389 of 2010 it was held that the general rule is that the owner of the goods is the person named in the Bill of lading as consignee and the one who holds the original bill of lading. The bill of lading attached to the Applicant and Respondent's affidavit shows that the owner of the goods is Edison Group International. Therefore, Edison Group International is the owner of the goods in issue. - 14. Section 47 (1) of the East African Community Customs Management Act provides that goods subject to import duty may on first importation be warehoused without payment in a government warehouse or bonded warehouse. Under section 51 $(1)$ (c) of The East African Community Customs Management Act where any goods are warehoused, the Commissioner may permit the name of the owner of such goods to be changed if the application is made on the prescribed form and signed by both the owner and the transferee. - 15. Therefore, as submitted by counsel for the Respondent change of ownership of warehoused goods has to follow the legally provided procedure under the East African Community Customs Management Act and the Regulations. - 16. Regulation 71 of the East African Community Customs

Regulations. provides that where the owner of any goods deposited in a warehouse desires to transfer them to another person, he or she and the person to whom it is desired to be transferred shall each complete and sign Form C16. The Form is addressed to the Commissioner and the owner of the goods requests for permission to transfer ownership of the goods. The transferee is required to accept ownership of the goods once the commissioner grants the permission to transfer the goods. - 17. The recognized owner of the goods in issue is Edison Group International who is the consignee on the bill of lading. The Applicant relies on the sales agreement as proof of ownership. However, under the East African Customs Management Act, once the goods are

warehoused, such transfer can only be done with the permission of the Commissioner and both parties have to sign Form C16.

- 18. There is no evidence on record to show that the parties signed Form C 16 as provided for under the law. Therefore, the Applicant is not the owner of the goods and is therefore not entitled to an order releasing the goods. - 19. The Application is therefore dismissed with costs to the Respondent.

Dated this 25^th day of October 2024

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Patricia Kahigi Asiimwe Judge Delivered on ECCMIS