Ndugga v Kabito and Anor (Receivers of Spencon Services Limited in Receivership)
Ndugga v Kabito and Anor (Receivers of Spencon Services Limited in Receivership) (Miscellaneous Cause No. 219 of 2020) [2021] UGHCCD 3 (4 February 2021)
The court held that the Insolvency Act, 2011 prescribes a mandatory order of priority for payment of creditors in insolvency, with secured and preferential creditors to be satisfied before any payment to unsecured creditors. The applicant, being an unsecured creditor, cannot be paid ahead of secured creditors regardless of his personal circumstances. The court emphasized that while Article 126(2) of the Constitution calls for substantive justice, it is expressly subject to the law, and the statutory scheme cannot be circumvented by judicial discretion. The court found that the application sou…
Source excerpt
- Insolvency Proceedings
- Priority Of Creditors
- Unsecured Creditors
- Receivership
- Statutory Distribution Scheme