THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(CIVIL DIVISION)

MISCELLANEOUS CAUSE NO. 205 OF 2021

VANTAGE MEZZANINE FUND II PARTNERSHIP ……………………………… APPLICANT

VERSUS

1. UGANDA REGISTRATION SERVICES BUREAU

2. SIMBA PROPERTIES INVESTMENT CO. LIMITED
3. SIMBA TELECOM LIMITED
4. LINDA PROPERTIES LIMITED
5. ELGON TERRACE HOTEL LIMITED …………………………………………… RESPONDENTS

BEFORE: HON. JUSTICE SSEKAANA MUSA

RULING

The Applicants brought this application for judicial review under Article 42 of the
Constitution, Section 98 of the Civil Procedure Act Section 33 & 36 of the Judicature Act,
Cap 14 and Rule 3(1)(a), 2, 4, 6, 7 and 8 of the Judicature (Judicial review) Rules, 2009 as
amended, the Companies (Powers of Registrars) Regulations, 2016 and all other
enabling laws for the following Orders and judicial reliefs:

1. DECLARATIONS THAT
(a) The respondent action of refusing to register documents lodged by the
Applicant upon confirming that the same conform with registry requirements
is irrational, arbitrary, unreasonable, clothed with procedural impropriety,
discriminatory, erroneous on the face of the record, lased with bias and
malice, ultra vires, unfair, unjust and illegal and unlawful.
 (b) The respondent’s action of purporting to halt the registration of documents
properly lodged for registration until the completion of an arbitration process
is ultra vires the respondent’s mandate and the law on registration of
documents, irrational, arbitrary, unreasonable, clothed with procedural
impropriety, erroneous on the face of the record, lased with bias malice,
unfair, unjust and therefore illegal and unlawful.
(c) The respondent’s action of failing to provide a decision on registration within
the required timeframes of the law is irrational, ultra vires, arbitrary,
unreasonable, clothed with procedural impropriety, erroneous on the face of
the record, lased with bias malice, unfair, unjust and therefore illegal and
unlawful.
(d) The respondent’s action of purporting to entertain a complaint/request to
halt registration of documents lodged by the applicant was illegal, irrational,
procedurally improper laced with bias, and thus unlawful.
(e) The respondent’s action of purporting to hear a complaint having failed to
comply with the law on registration of documents lodged by the applicant is
ultra vires, illegal and unlawful.
(f) The process that the respondent subjected to the applicant to after the
applicant lodged documents for registration on June 18th 2021 was improper,
ultra vires the attendant regulations, and to that extent illegal and unlawful
2. ORDERS that
(a) An Order of Certiorari doth issue quashing the record of proceedings and all
attendant decisions relating to the halting or otherwise delaying the
registration of documents lodged before the Registrar of Companies on June
18th 2021, the same being unfair, discriminatory, illegal, clothed with
procedural impropriety, unreasonable, highhanded, arbitrary and ultra vires
the law on registration of documents.
(b) An Order of Mandamus doth issue compelling the respondent and all its
concerned officers to immediately complete the process of registering the
documents lodged by the applicant on 18th June 2021 and do so without
delay.
(c) An Order of Prohibition doth issue against the respondent, its officer and any
agents or any other person exercising powers in the respondent’s name to
desist from entertaining any other processes, colluding with or otherwise
entertaining the interference of persons ultra-vires the registration process,
or acting in any manner that is contrary to the law and process of registering
documents, or in any way frustrates or otherwise offends the applicants
rights.
(d) An Order directing the respondent to pay to the applicant special Damages
computed as follows;
(i) In the sum equivalent to the commercial interest accruing to the
applicant on a monthly basis:
(ii) The sum equivalent to any dissipation in the value of the shares that
may result from the respondent’s delay in effecting share transfers,
Both sums arising from the Mezzanine Term Facility Agreement whose
provisions the respondent continues to frustrate by its actions,
computed from June 18th 2021 to the date of completion of the
registration of the said documents.
(e) An Order directing the respondent to pay the applicant general, punitive and
Exemplary damages
(f) An Order directing the respondent to pay the applicant costs of this
application.
(g) Orders that the court may deem necessary to redress the injustice occasioned
upon the applicant by the respondent.
The grounds in support of the application were set out in the application and the
affidavit in support by Moses Muziki which briefly states that;

1. On 18th June 2021, the applicant lodged documents relating to the transfer of
shares in Simba Properties Investment Company Limited, Simba Properties
Limited; Linda Properties Limited: and Elgon Terrace Hotel Limited;
2. At Lodgment, the applicant’s lawyers met with officers of the respondent who
verified each of the documents lodged and confirmed that the documents
conformed to the registration requirements.
3. Rather that register them immediately as required by law, the respondent
officers undertook to do so at the earliest opportunity but in any event without
delay, giving the applicant a legitimate expectation that the documents would be
registered in accordance with the law.
4. The respondent did not comply with the law and did not provide the applicant
with a satisfactory reason for not doing so until the applicant’s lawyers were
made aware that the respondent was entertaining a request to halt the process
from third parties.
5. The respondent acted outside the law in various respects when it entertained a
complaint/request to halt the registration process, purported to conduct a
hearing before registering the process and ultimately refused or otherwise failed
to complete the registration process, and continues to act outside the law.
6. Rather than complete the registration of documents or refuse the same as
provided for under the law, the respondent purported to halt the registration
process until completion of an arbitration process, which procedure is not
provided for under in law.
7. The respondent’s actions have resulted in into great financial and other losses to
the applicant, which losses it ought to atone for.
The 1st respondent responded to the application by filing an affidavit through Patricia
Opoka Akello who is the Manager Document Registration and Licensing at Uganda
Registration Services Bureau contending that;

1. That on 18th June 2021 she received documents from the applicant to register
resolutions and share transfer from for Simba Properties Investments Co. Ltd,
Simba Properties Ltd, Linda Properties Ltd and Elgon Terrance Hotel Ltd.
2. That on 22nd June 2021 received documents from Muwema & Co Advocates &
Solicitors claiming to act for Simba Companies and filed an application to the
Registrar General objecting to the registration of the said resolutions and
transfers and notifying the respondent of the existence of an order of the High
Court of Uganda vide M.A 201 of 2020 referring the matter in dispute to
arbitration.
3. That the 1st Respondent paused the registration of the said documents to enable
its official verify the Court Order, and to peruse the Court record with a view of
understanding the nature and effect of the said court order.
4. That it was confirmed that there was indeed a matter before Justice Wamala in
which he delivered a ruling confirming that there existed a dispute between the
applicant and the Simba Companies regarding the Mezzanine Term Facility
Agreement (MFTA) and referred the same to Arbitration.
5. That subsequently, the 1st respondent invited the advocates of the applicants
together with those of the Simba Companies to a meeting held via zoom on 28 th
June 2021 were both parties were heard.
6. That the 1st respondent heard the arguments of both sides and was convinced
that the documents submitted to it are part of the dispute referred to in
arbitration. In the letter dated 1st July 2021, the respondent communicated its
decision to, and advised the parties to expedite the resolution of the dispute
through arbitration as ordered by court.
 7. That the respondent acted reasonably and within the law, when it exercised its
powers under the Companies (Powers of Registrar) Regulation, 2016 to decline
registration.

The 2nd to 5th respondent made an application to be joined on the court proceedings
which application was allowed and they became respondents in this matter and they
filed an affidavit in reply through Charles Nsubuga-an Advocate with Muwema & Co
Advocates and Solicitors.

The respondents denied most of what was alleged in the affidavit in support of the
application and wholly supported the reason advanced by the 1st respondent for refusal
to registered documents contending that the resolutions were undated and the transfer
of shares were blank. They contended that application to transfer the shares by the
applicant was fraudulent, misleading and erroneous since it was not authorized by the
respondents’ valid board resolutions.

The following issues were raised;

1. Whether the Applicant has locus to bring these judicial review proceedings?
2. Whether the Applicant sets out proper case for judicial review?
3. Whether the Application raises any grounds for judicial review?
4. Whether the Applicant is entitled to reliefs sought?

The applicant was represented by Mr. Robert Kirunda while the Mr. Birungi Dennis
represented the 1st respondent and Mr. Fredrick Muwema and Mr. Charles Nsubuga
represented the 2nd-5th respondents.

Whether the Applicant has locus to bring these judicial review proceedings?

Counsel for the Applicant submitted that the Applicant is a duly and validly existing
partnership based in South Africa. This fact is neither disputed nor contested. The
Applicant partnership exists by virtue of a partnership agreement that is recognized as
the basis of establishment of a partnership in South African law. This fact is established
both by the Applicant’s evidence and by the conduct of the parties, under the South
African High Court Rules, the partnership has capacity to sue and be sued in its name.

He further states that under Ugandan law, a partnership can sue or be sued in its
names. Citing Civil Procedure Practice in Uganda at p.32 by M. Ssekaana and S.N.
Ssekaana “partnerships may sue or be sued in the firm’s name or alternatively in the
names of the partners. The Rules of Court provide that any action by or against partners
may be taken in either the firm name or in the personal names of the partners.” The
above position is a postulation of Order 30 Rules 1 and 10 of the Civil Procedure Rules
which, read together, specifically provide that a partnership may sue or be sued in the
firm’s name. (see. Odoki J (as he then was) in Reliable African Insurance Agencies v.
National Insurance Corporation HCB 1979 at p.58)

The above Rules do not impose a requirement for foreign partnerships be registered in
Uganda in order for them to have legal capacity to sue or be sued. Justice Wamala in
Krone Uganda Limited v. Kerilee Investments Uganda Limited MA. 306 of 2019 at
pp.16 to 21 recently dealt at length with position of the legal capacity of foreign
companies to sue or be sued in Uganda. He found that legal capacity is not diminished
by boundaries and that once a company is incorporated else where it has the right to do
business in Uganda and by extension to enforce its contractual rights.

Counsel submitted that the reasoning in that decision applies to registered partnerships
as well. We are fortified in this view by the fact that Order 30 does not specifically
impose any restrictions on foreign partnerships in order for them to have the capacity to
sue or be sued in Uganda.

Counsel for the 1st Respondent submitted that the Applicant is a non-existent legal
entity and hence incapable of instituting these proceedings because there is no entity in
the names of the Applicant. The Respondent avers that no such entity exists in the
territorial jurisdiction of the Republic of Uganda and therefore this application cannot
be instituted by a non-existent entity.

Furthermore, the Applicant cited Order 14 of the South African Rules stating that a
partnership may sue in its names the same way our Civil Procedure Rules provide,
however, nowhere do they show that the Applicant is a valid partnership. The Applicant
attaches the High Court Rules of Procedure of the Republic of South Africa as proof of
existence of a partnership, but those Rules do not apply in Uganda a sovereign state
with its own Rules. Even when the Applicant submitted a Partnership deed purportedly
signed on 27th February 2013 by one party, yet it is trite law that the minimum number
of persons to commence a partnership relationship is two, but also does not indicate
the country or place where it was signed, does not contain provisions establishing a
partnership relationship, a copy is not registered in accordance with the Registration of
Documents Act, it is not notarized by the Notary Public of South Africa as per Section 84
of the Evidence Act, hence a deed signed by one party is not sufficient to create a
partnership relationship.

Analysis

I have taken the liberty to address my mind to the meaning of a “Partnership” as per
Section of the Partnership Act and also some decided case law. In consideration of the
meaning which is very clear and also the requirements listed, as per the facts, its
existence in South Africa is not basis to be disregarded as a partnership.
Justice Wilson Masalu Musene (as he then was) in Asingwire Alex Willy & Biryabarema
Deo v. Rwakojo Grace HCT – 01 – CV – CS N0. 001 0F 2014, stated that:
“a partnership may be governed by a partnership contract, a written agreement,
agreed positions between partners either from their express or implied conduct or
overriding prohibitions entrenched within the Act unless if expressly negated by
the written partnership agreement.”

The applicant may indeed be a partnership in South Africa but it is not clear to this court
whether it was registered or not in the same country or the same laws applicable in that
country are in pari materia with the legal position in Uganda. Therefore this court will
interrogate this fact to come to its finding and determination.
In South Africa, a partnership is not regarded as a legal entity. Unlike trusts, companies
and close corporations, which are considered 'legal or juristic persons', a partnership is
not, and there are no formalities required in order to set up a partnership.

Introduction to the South African law of Partnership

A partnership is a legal relationship that derives from a contract. The salient features of
the contract are:
• it is concluded between two or more persons (but normally not more than 20
persons)
• each partner must undertake to contribute to an enterprise,
• the partnership must be carried on in common
• and the object must be the making and sharing of profits.

A partnership is not a corporate entity" It does not have a separate legal persona and
this has several important legal consequences: in the relationship between the parties
all rights and duties only exist between the partners Inter se, the rights and duties of the
partnership are the rights and duties of the partners and the continued existence of the
partnership depends on the continued participation of partners in the partnership
hence it has no perpetual succession.

Establishing a Partnership under South African law

Partnerships are created by contract. Thus for a partnership to be validly formed all the
general requirements as regards to contractual validity must be met, Furthermore for an
agreement to be one of partnership consensus must have been reached on all the
essential terms of partnership or rather as was described herein above as its salient
features.

The principles of creation of partnership in South Africa would appear similar to the
Ugandan law since they also have a bearing to the common law principles and they
guide in this area of the law. It is not clear whether the applicant partnership is duly
registered in South Africa and it would appear it is not a requirement to register the
same in that country although a business name should be registered as such. The
document attached to the supplementary Affidavit in rejoinder is titled SECOND
AMENDED AND RESTATED EN COMMANDITE PARTNERSHIP AGREEMENT OF THE
VANTAGE MEZZANINE FUND II PARTNERSHIP entered into between VANTANGE
MEZZANINE FUND II (PROPRIETARY) LIMITED, in its capacity as general partner of the
VANTAGE MEZZANINE FUND II GP PARTNERSHIP and THOSE PERSONS SIGNING DEEDS
OF ADHERENCE IN THE FORM OF SCHEDULE 1 is part of the alleged partnership
agreement that created the applicant.

This document is a foreign document that was not notarized for authenticity and
verification of the content as genuine and replica of the original partnership agreement.
Such a document ought to have been notarized in accordance with section 84 of the
Evidence Act which provides;
“84. Presumption as to private documents executed outside Uganda
The court shall presume that private documents purporting to be executed out of
Uganda were so executed and were duly authenticated if—
(c) in the case of such a document executed in any country of the
Commonwealth in Africa, it purports to be authenticated by the signature and
seal of office of any notary public, resident magistrate, permanent head of a
government department, or resident commissioner or assistant commissioner in
or of any such country; and, in addition, in the case of a document executed in
Kenya, it purports to be authenticated under the hand of any magistrate or head
of a government department;”
The same is not registered and was not signed by all the parties/partners or the pages of
the signatures were not attached. It is contended that the same document/partnership
agreement is confidential and it is produced in bits and is incomplete which makes it
difficult for this court to determine whether it is a partnership. The country of origin of
the partnership deed is not indicated apart from a clause within indicating that the
governing law shall be laws prevailing in RSA. This document cannot be relied upon in
determining the existence of a partnership for purposes of establishing legal capacity to
sue or be sued in Uganda.

The Ugandan law under the Partnership Act makes it is a mandatory requirement for
certain partnerships to register and the failure to register may have serious
consequences to the existence of the partnership entity.

Mandatory registration

(1) A firm carrying on business in Uganda under a business name which does not
consist of the true surnames of all partners who are individuals and the corporate
names of all partners which are corporations without any addition other than the
true first names of individual partners or initials of the first names; and the
corporate names of all partners which are corporations, shall register its name
under the Business Names Registration Act.

(2) Where any persons operate a business as a partnership in contravention of

subsection(1), every party to the business commits an offence and is liable on
conviction, to a fine not exceeding twenty currency points and to an additional
fine not exceeding five currency points for each day for which the offence
continues after the expiration of fourteen days.

The law in Uganda is prohibitive of such a partnership to operate without registration

and penalizes the offending party continuously for offending the provision for
registration under the partnership Act. In the present case the applicant contends that it
is a partnership, which means that it must comply with the law which requires
registration in order to have capacity to sue or not to sue in Uganda. The applicant’s
status as a recognized entity in South Africa has not be proved to the satisfaction of this
court since there is no single registered document that has been produced before this
court apart from a few pages of the unregistered partnership agreement.

The applicant’s counsel cited the case of Krone Uganda Limited v Kerilee Investments
Uganda Limited HCMA No. 306 of 2019 in support of his argument that there was no
need for it to be registered in Uganda having been recognized and there is requirement
for registration of partnerships in South Africa, therefore like in other jurisdictions it has
the right to sue and be sued as an existent legal entity worldwide. Once a partnership is
properly or registered in its country of origin then it can sue or be sued. Justice Wamala
in that case found that legal capacity is not diminished by boundaries and that once a
company is incorporated elsewhere it has the right to do business in Uganda and by
extension to enforce its contractual rights. At page 17 learned judge held thus:
“Under the law, once a company is incorporated, it obtains legal personality as
against the whole world. The legal personality is not diminished by legal
boundaries. Like natural citizenship, it is only restricted to what it can do outside
its geographical boundaries. It is therefore the true position that a company
incorporated in the United Kingdom can transact business in Uganda without
having to go through any form of registration. Counsel for the Applicant
appeared to agree with this position. If such a company can transact business in
Uganda without first having to register, then it follows that it has capacity to
enforce its rights if they are affected in the course of doing business. Bringing
and maintaining a court action is one major way of enforcing such rights. It is
therefore not true that a company incorporated in the United Kingdom is a non-
existent entity that cannot bring and maintain an action in Uganda.”

The above decision is quite distinguishable from the present case since it was a
company matter and the law never required mandatory registration of such a company
unlike in the present case where the nature of partnership requires a mandatory
registration whether by a Ugandan partnership or a foreign partnership. It should be
appreciated that a partnership operates in a fluid manner and thus the need to ensure
proper monitoring through registration especially where the partners are not using their
true surnames or corporate names of all partners which are corporations like in the
present case where it is appears to be a partnership of companies whose particulars and
place of registration or incorporation is not known.

Unlike partnerships— which do not have a separate existence from their owners since
partners are individually liable for partnership obligations, companies have a separate
legal existence from their shareholders (Salomon v A Salomon and Co Ltd [1897] AC 22)
and are recognized internationally. A partnership is not under the law a juristic person
as it is only compendious name for the collection of individuals or companies who are
members of the firm. The existence of a partnership is a matter of law. See Sirma v
Kiprono [2005] KLR 197

At page 16 of the ruling in Krone, His Lordship Justice Boniface Wamala stated: “Let me
point out that there is a difference between incorporation of a company and registration
of a company for purposes of foreign presence. Under the law, once a company is
incorporated, it obtains legal personality against the whole world”. Partnerships have no
corporate personality, which is why the language used under the Partnerships Act, 2010
and the Business Names Registration Act is registration and not incorporation.
Partnerships therefore do not have legal personality against the whole world, the
reason they have to register in every national jurisdiction and there legal recognition
may vary in different jurisdictions depending on the laws in that country.

The importance of registration of the partnership which does not operate under its
surnames should be underscored since it is intended to protect the public dealing with
such a persons who have come up to operate under a partnership. The Business Names
Registration Act requires a registration which will automatically include providing
particulars of the partners which provide the true identity of such a partnership. This
Honorable Court has stated in the case of Asingwire Alex Willy vs Rwakojo Alex HCT –
01 – CV – CS No. 001 of 2014 “Under the Business names Registration Act, Cap. 109
Laws of Uganda, Business Names are to be registered whether partnership or otherwise.
Registration is therefore compulsory. In this case, the Plaintiffs, from the evidence on
record, did not comply with Sections 4, 5 and 6 of the Business Names Act. That meant
that there was no partnership in place. Even if Section 2 (1) of the Partnership Act
defines a partnership as the relation which subsists between persons carrying on
business in common with a view point of profit, as submitted by Counsel for the
Plaintiffs, such partnership, presumed or real has to be registered under the Business
Names Registration Act.”

In the same vain, this Court rejects the submission of counsel for the applicant, that
foreign partnerships are free to operate in Uganda outside the regulatory registration
requirements contained in the Partnerships Act, 2010 and the Business Names
Registration Act (Cap 109). Order 30 of the Civil Procedure Rules provides suing and
being sued once the partnership has satisfied the mandatory requirements of the law.
Therefore, the international partnerships or foreign partnerships just like the Ugandan
partnership cannot be recognized once they are not registered since their identities are
unknown and it may open the door wide for fraud in their transactions and dealings.

The locus standi or standing to sue (capacity) in a partnership name should be by

mandatory registration under the Partnership Act and Business Names Registration Act
which sets out the regulatory framework for partnerships in Uganda.

For the reasons hereinabove stated, the applicant has no legal presence and locus
(capacity) to commence this application. The application is dismissed.
However, for completeness I will determine the application on merit in case they had
had locus (capacity).

Whether the Applicant sets out proper case for judicial review? & Whether the
Application raises any grounds for judicial review?

Counsel for the Applicant submitted that the application presents a proper case for
judicial review in so far as it challenges the actions and decisions of the 1 st Respondent,
a public body. The 1st Respondent is enjoined to ensure that all its actions comply with
the public laws of this country. The current application shows that all the actions and
decisions challenged herein fail dismally against this standard. The objectives of Judicial
Review are provided for under Regulation 1A and 7A of the Judicature (Judicial Review)
Rules, 2009 as amended (See. Mohammed Alibhai & 2 others v. Attorney General Misc
Cause 70, 117 & 119 of 2020 at pp. 8-12. Rutayisire Alphonso & Another v. Uganda
Revenue Authority (The Commissioner Customs) Misc. Cause 236 of 2020 at pp.7-10
and Marvin Baryaruha v. Attorney General.)

Counsel cited the following grounds as the basis of the judicial review application that;

a) Contrary to Regulation 15 of the Companies (Powers of Registrar) Regulations,

2016, Refusing to register documents immediately upon verifying that the said
documents conform with requirements for registration
b) “halting” and “declining” to register documents which conformed to registration
requirements contrary to Regulation 15 cited above
c) Refusing to register documents on grounds not provided for in Regulation 17 of
the Companies (Powers of the Registrar) Regulations, 2016 which provide for
specific grounds for declining to register documents
d) Failing to provide detailed reasons for declining to register documents within the
mandatory time stipulated in Regulation 17
 e) Entertaining a “complaint” cum “application” to halt registration of documents
which application or complaint is not specifically envisioned or provided for in
law
f) Purporting to hold a “hearing” not provided for in law
g) Purporting to grant injunctive reliefs whereas not being whereas not being
clothed with powers to do so
h) Acting with bias in the making of administrative decisions affecting the
Applicant’s contractual rights

In support of the grounds counsel further submitted that before filing the instant
application, the Applicant exhausted every effort to seek internal mechanisms within
the Applicant to correct its illegal, unfair and unjust course of action. The Applicant even
issued a final notice of intention to sue which was roundly and wantonly ignored. As per
the apparent facts;

Counsel for the Applicant submitted that upon having received the Applicant’s
documents, the 1st Respondent was bound and required to follow Regulation 15 of the
Companies (Powers of Registrar) Regulations, 2016. Where the 1st Respondent is to
decline registration of any document, it must do so within the precincts of Regulation 17
of the said Regulations, any application to oppose registration of documents must be
based on at least one of the five grounds listed.

The Respondent did not register the documents immediately, neither did it decline
registration with detailed reason within five working days, as required by the law. The
1st Respondent treated the Applicant with disdain in refusing to take calls, colluded with
2nd to 5th respondents to fabricate and purported to hear a complaint that is not
provided for in law, ignoring protests as to its illegal conduct. All these actions, and the
process through which they were reached violated due process, were unfair and unjust.
The 1st Respondent misdirected itself on the law,(Regulation 15 and 17 of the
Companies (Powers of Registration) Regulations 2016 and Section 6 of the Arbitration
and Conciliation Act Cap 4) when it appropriated powers to grant injunctive reliefs that
it does not have, exceeded its jurisdiction in every way, used its powers for improper
purposes, failed to take into account the fact that the court vacated its own interim
orders and did not issue further injunctions, did not take into account that a reference
to arbitration is not in itself an injunction, acted in bad faith by frustrating transfers that
are intended to mitigate loss and further doing business, and acted unlawfully and in
breach of its statutory duties

Counsel for the 1st Respondent’s argued the two issues concurrently since they are
related.

Counsel for the 1st Respondent submitted that its administrative decisions are amenable
to judicial review and that the application is without merit as it does not raise any
grounds for judicial review. The 1st Respondent at all material times acted within the
law, rationally and fairly to all parties when it declined to register the documents
submitted by the applicant’s lawyers

The Applicant’s lawyers submitted resolutions, charges and share transfer forms
intending to transfer shares in 2nd to the 5th Respondents. Upon pursuing the ruling in
M.A 201, 2020, the Respondent established that the documents submitted constitute a
significant part of the dispute contained in the Mezzanine Agreement between the
Applicant 2nd to 5th Respondents. The 1st Respondent is not privy to that contract and in
rejecting the documents, it was purely interested in ensuing that due process is followed
as per Article 42 of the Constitution.

Counsel further submitted that the 1st Respondent has a legal duty to cooperate with
Courts of law. Regulation 5 of the Companies (Power of Registrar) Regulations, 2016,
the Respondent is required to cooperate with other ministries, departments and
agencies of government and most importantly courts of Judicature. Hence the
Respondent could not proceed to register documents when court order vide 201 of
2020 had been brought to its attention referring the matter to arbitration.

The 1st Respondent has different verification levels and even if one officer is unable to
point out the illegalities and irregularities in documents submitted, other officials and
structures can do so and did so. The verbal assurances of mentioned officials did not
constitute the official position of the 1st Respondent. The 1st Respondent communicates
its official position formally on its headed paper as it did when the decision to decline.

Counsel also submitted that on the company register, the applicant and their lawyers
are neither directors nor secretary of the 2nd to 5th Respondents, they have no express
authority to file documents on behalf of the said companies. The 1st Respondent only
recognizes Directors and Secretary appearing on form 20 as persons with legal mandate.
The Applicants are strangers on the record of the five companies and URSB as the
custodian of the register could not allow them to alter the register without the
concurrence of the directors and shareholders of those companies.

The 1st Respondent also acted within its powers under regulation 17 of the Companies
(Power of Registrar Regulations), 2016, which empowers the registrar of companies to
refuse documents. If the respondent had gone ahead to effect registration of
documents, it would thereafter be required to invoke its powers under Regulation 8, to
rectify the register by cancelling of the same.

Counsel for the Respondent also submitted that upon studying the documents carefully,
discovered gross illegalities that ought to be brought to the attention of Court. The
illegality relates to failure to register charges as required under Section 105 of the
Companies Act, 2012. After failing to register charges as required by Section 105 of the
Companies Act, the applicant sought to enforce irregular charges in form of pre-signed
resolutions transfer forms and charges by circumventing the Section but failed.
The arrangements of pre-signed resolutions and transfer forms are also against the
public policy generally. If the applicant wished to perfect its security over the
respondent companies, it would have registered a charge in accordance with the
provisions of the Companies Act. At this stage, the applicant seeks to enforce
unperfected and irregular securities, which they should have registered in 2014. Section
105 provides that unregistered charges are void. Even if the applicant intends to perfect
these securities, it had to first apply to the Registrar under Section 111 of the
Companies Act, 2012 to seek leave to file out of time, proofing justifiable reasons why
they did not do so for such a long period of 8 years since their creation.

The allegations of collusion and bias labeled against the 1st Respondent are unfounded.
The Respondent invited both counsel to the parties to the dispute and accorded them a
fair hearing before making its decision. The allegation that the 1st Respondent alerted
the 2nd to 5th respondents is without evidence but a mere speculation. The 1st
Respondent avers that fairness entails hearing both sides as it did, ascertaining the
various parties that may be affected by the decision and taking into account the impact
of the decision on all parties.

Counsel further submitted that the claims by the applicant had a legitimate expectation
to have its documents registered and that such a principle does not apply in these
circumstances for a number of reasons. First there was no promise to the applicant to
register its documents, since the 1st Respondent makes official representations by way
of letter addressed to the concerned party on its letter head. One of the requirements
for legitimate expectation to be effective is that the promise, the representation that
gave rise to the expectation should be clear, unambiguous and unqualified. (See Dr.
Peter Okello v. Kyambogo University and another Misc. Cause No. 23 of 2017). This
meant that there was no expectation that could be made by an official, where
implementation of the promise is contrary to law or public policy.
Analysis

The 1st respondent contended that the main reason for refusal to continue to consider
the registration of the documents was that there was a dispute which in their view was
referred to arbitration by Justice Wamala in his ruling when he noted thus; “ Impugned
arbitration agreement exists, is valid, operative and capable of being performed, and
that there is an arbitrable dispute between the parties herein, it is ordered that this
matter be and is accordingly referred to arbitration in accordance with section 5 of the
Arbitration and Conciliation Act”

I respectively disagree with the respondents’ argument that the above ruling meant that
the Registrar General should not do what the law directs her to do. The court merely
acknowledged that there was a dispute between the parties and the same would be
best resolved by arbitration as envisaged by the parties in their agreement. Therefore,
the 1st respondent misdirected itself to stop the registration process by taking into
account extraneous matters related to arbitration process. This court faced with a
similar challenge of exercise of power of the Registrar of Companies held in the case of
Brian Xsabo Strategy Consultants (Uganda) Ltd & 2 others v Great Lakes Energy Co. NV
Company Cause No. 13 of 2020 as follows;

“The proper office to determine the legality of documents already presented to it is the
Registrar of Companies. This power is vested in a specific office under the available legal
regime……………………………………………….
The orders sought clearly fall within the ambit of regulation 8 of The Companies (Powers
of The Registrar) Regulations S.I No. 71 of 2016. Under regulation 3(i) it is provided that;
“In the exercise of the functions under the Act or any Regulations made under the Act,
the registrar—; (i) may correct or amend the register;
And Regulation 8 provides as follows:
“8. Rectification of register.
(1) The registrar may rectify and update the register to ensure that the
register is accurate.
 (2) For the purposes of this regulation, the registrar may expunge from the
register, any information or document included in the register, which—
(a) is misleading;
(b) is inaccurate;
(c) is issued in error;
(d) contains an entry or endorsement made in error;
(e) contains an illegal endorsement;
(f) is illegally or wrongfully obtained; or
(g) which a court has ordered the registrar to expunge from the
register.”
The parties could not agree to suspend the powers of the Registrar of Companies in
respect of their register for which they are the sole custodians or agree through an
arbitration process to breach the law or process governing transfer of shares or illegally
change ownership or management of the company in disregard of clear provisions of the
law. The registrar of companies still retains the jurisdiction to correct and amend the
register in case of any document or information that falls within regulation 8. The
arbitration Clause or process cannot be used suspend the powers of registrar to do what
the law mandates the office to do. The notification about arbitration process cannot be
used to suspend or stop the Registrar from executing their duties under the law.
The respondent have submitted that the rectification of the register was not one of the
disputes referred to arbitration and secondly, that by the time the matter was referred
to arbitration they had already made an application for rectification of the register. This
court is in agreement with this submission and the appellant’s have not shown how the
issue of rectification of the register is pending before the London Court of International
Arbitration. The prayers sought by the appellant are clearly set out in request for
arbitration (annex O) dated 12 February 2020.
In addition, the arbitration clause that the appellant is trying to use in taking away the
jurisdiction of Registrar of Companies was made in a different agreement (Investment
Agreement) and in my view it relates solely to disputes arising out of the same
agreement and not disputes in alleged illegal change of company management and
ownership. When the appellants made the necessary changes to the company register in
respect of the shareholding and admitted the respondent it became a new legal order
and the same could not change whimsically to the detriment of the parties or without
due process. It is trite that the registrar while adjudicating upon a lis is obliged to pose
and answer a right question as to enable it arrive at right conclusion as to whether it has
jurisdiction.
The duty of the registrar of companies to rectify a Company Register is akin to that of a
registrar of titles in Land Office, they cannot surrender that statutory obligation to a
third party once they have established errors or mistakes in the register. The registrar
could not refer a matter to the London Court of International Arbitration.”
The above decision is very instructive on the powers of the Registrar General and the
same cannot be curtailed by court proceedings or Arbitration proceedings unless there
is a specific court order stopping such exercise of power. Arbitration proceedings are
not injunctive reliefs against execution of the mandate of Registrar of Companies. Any
person likely to be aggrieved by such exercise of power is at liberty to apply for
temporary relief pending the determination of the arbitration or court proceedings.
The task of court in determining whether the decision is illegal is essentially one of
construing the content and scope of the instrument conferring the duty or the power
upon the decision maker. The main question to determine whether the decision has
been reached lawfully or not is whether the decision was taken in the within the powers
granted and if it was, was the manner in which it was reached lawful? In the present
case, the Registrar of Companies exercised her discretion by making a choice between
making alternative courses of action of proceeding to determine whether to register or
not to register. She indeed decided not register because in her view there were
arbitration proceedings. This exercise of discretion is fettered and court must be
satisfied that the exercise of power took into account factors which were legally
relevant. The reason advanced by the Registrar of Companies was not one of the
grounds the Registrar of Companies should consider whether to register documents or
not?
Therefore, the decision of the 1st respondent refusing to consider registration of
documents because the matter was referred for arbitration was illegal and contrary to
the law in absence of an order of court granting injunctive reliefs.
The applicant challenged the 1st respondent for allowing the 2nd to 5th respondent to
take part in the proceedings or entertaining their complaint challenging the registration
of the documents. The Registrar of Companies has wider powers in registering powers
and this may include verification of the documents, which may indeed involve
consulting with the company officials in order to ensure the register is free of illegal
documents or wrongly obtained or executed documents.
The 1st respondent was right to entertain the complaint of the 2nd to 5th respondent and
according them a hearing along with the applicant. The quasi-judicial powers conferred
on the Registrar of companies must be exercised in fairness to limit challenges to the
final decision premised on failure to be hear all the parties who may be affected by the
decision. The 2nd to 5th respondents would be directly affected by the outcome or
registration.
The 1st respondent was justified and right to hear the affected parties and cannot be
faulted for this exercise of power to hear the parties. There is a presumption that
procedural fairness is required whenever the exercise of power adversely affects an
individual’s rights protected by the constitution. Whenever a public function is being
performed like that of the Registrar of Companies, there is an inference, in absence of
an express requirement to the contrary, that the function is required to be performed
fairly. Although, fair hearing will not be applicable in all situations of perceived or actual
detriment. See Save Britain’s Heritage v Number One Poultry Ltd [1991] 1 WLR 153
Whether the applicant is entitled to the reliefs sought?

1. This court would have issued an order of certiorari quashing the decision of the
1st respondent not to consider the applicant’s documents for registration because
there are arbitration proceedings.
2. This court would have issued an order of mandamus compelling the applicant’s
request to consider the registration of their documents on merit or advance
reasons for denial or refusal to register the same in accordance with the law.
3. The rest of the orders sought would not have been granted.
4. Each party shall bear its costs

I so order

Ssekaana Musa
JUDGE
9th May 2022