Source: https://www.scribd.com/document/233756090/Judgment-Shell-vs-Muwema-Mugerwa
Timestamp: 2016-08-27 20:28:45
Document Index: 567260154

Matched Legal Cases: ['Application No. 645', 'Application No. 622', 'Application No.625', 'Application No.622', 'Application No. 625', 'Application No. 622', 'Application No. 645', 'Application No. 646', 'Application No.\n622', 'Application No 646', 'Application No.645', 'Application No.\n645', 'Application No 622', 'Application No 622', 'Application No.645', 'Application No.645', 'Application No 194', 'Application No.194', 'Application No.194', 'Application No.194', 'Application No.194', 'Application No.194', 'Application No 645', 'Application No 194', 'Application No.194', 'Application No.625', 'Application No.622', 'Application No.645', 'Application No. 0068', 'Application No 645', 'Application No.645', 'Application No.645', 'Application No.645', 'Application No.645', 'Application No.645', 'Application No.625', 'Application No. 622', 'Application No.625', 'Application No.645', 'application No.645', 'Application No.645']

BrowseUploadSign inJoinBooksAudiobooksComicsSheet MusicWelcome to Scribd! Start your free trial and access books, documents and more.Find out moreTHE REPUBLIC OF UGANDAIN THE SUPREME COURT OF UGANDA
(CORAM: KATUREEBE J.S.C, ODOKI, TSEKOOKO, OKELLO and KITUMBA,
BETWEEN 1.SHELL (U) LTD 2.KOBIL (U) LTD
3.GAPCO (U) LTD
4.MGS INTERNATIONAL (U) LTD 5.DELTA PETROLEUM LTD
6.FUELEX (U) LTD ::::::::::::::::::::::::::::::::::::::::APPELLANTS
7.CITY OIL LTD
8.HASS PETROLEUM LTD
9.NILE ENERGY LTD 10.PETRO LINK (U) LTD
1.MUWEMA & MUGERWA ::::::::::::::::::::::::::::::::::::: 1
2.UGANDA REVENUE AUTHORITY ::::::::::::::::::::::::::2
[Appeal from the decision of the Court of Appeal at Kampala in Civil Appeal No. 18 of
2011 (Bahigeine,DCJ, Byamugisha, Nshimye JJA) dated 19
This is a third appeal to this court. The appellants fled in the High
Court Misc. Application No. 645 of 2010, challenging, inter – alia, the
decision of the Deputy Registrar on the charging orders she made as a
taxing ofcer. The appellate judge ruled in their favour and the 1
respondent successfully appealed to the Court of Appeal which
reversed the High Court decision. The appellants were dissatisfed with
the decision of the Court of Appeal and made a third appeal to this
court. The ten appellants together with forty other companies are Oil
importers. On 7
April 2009, Rock Petroleum (U) Ltd. which was
represented by Muwema & Mugerwa Advocates, the 1
frm, obtained a court order to prosecute a representative suit for
recovery of excise duty from Uganda Revenue Authority (URA) the 2
respondent which it had wrongly collected in the sum of Shs.
56,184,191,050/= through an order under the Taxes and Duties
(Provisional Collection) Act. This order had expired for the period of
2007/2008.The respondent fled and prosecuted Originating Summons
No.009/2009, Rock Petroleum (U) Ltd versus Uganda Revenue
Authority and judgment was entered in favour of the oil companies by
Mukasa J on 20
July 2011 as follows:
“The Defendant shall refund to each of the Diesel and Petrol
Importers all the moneys collected in excess and the costs of
Unknown to the ten appellants, the 1
respondent on 1
2009 the same day OS 009/2009 was fled in the High Court entered
into a remuneration agreement with Rock Petroleum (U) Ltd. in which it
was stated, inter alia, that:
“1 The Advocates shall be entitled to costs of the suit and
an additional fee which is equivalent to 16% of the total
proceeds of the clients’ claims or whatever total sum of the
claim that the court shall fnally award or declare to be due
“2 In the event the recovery is protracted by the appeal
process, advocates shall be entitled to a further 4% of the
total claim.”
None of the ten appellants signed or ever saw the agreement until the
respondent sought to execute it against them.
The frst respondent demanded Uganda shillings 8.9billion from “U R A” the second respondent which refused to pay.
respondent fled Miscellaneous Application No. 622/2009 in bid
to cause the 2
respondent to pay Uganda shillings 8.9 billion. The
second respondent opposed the application. The appellants fled Miscellaneous Application No.625 of 2010
challenging the agreement between Rock Petroleum (U) Ltd and the 1
respondent claiming that they were not aware of the agreement and
sought the following orders:
1.The applicants be joined as parties/plaintifs in the main
2.A declaration that any private agreement related to
advocates fees signed between the 1
respondent and its
counsel is not binding and/or enforceable on all the
applicants or any other person not party to it.
3.The 2
respondent pays the applicants as per the
applicants’ instructions and directive of court
4.Costs of the application be provided.
Both applications No.622/2010 and 625/2010 were heard by the
Deputy Registrar on the same day 8
November 2010, the Deputy Registrar gave her ruling in
Miscellaneous Application No.622/2010, directing the 1
be paid 16% of the decretal amount from the refunds due to the oil
importers including the ten appellants. It was not until 23
November, 2010 that the Deputy Registrar entered
on the fle of Misc Application No. 625/2010 that it was “overtaken by
The appellants appealed against the Deputy Registrar’s Ruling in
Miscellaneous Application No. 622 of 2010 by fling Miscellaneous
Application No. 645 of 2010 Shell (U) Ltd and 10 Others Vs Rock
Petroleum Ltd URA, Muwema and Mugerwa Advocates challenging
the legality of the remuneration agreement. The grounds for court’s
determination in that application were as follows:
1.The decision and orders made by the Registrar
Commercial Court Her Worship Gladys Nakibule Kisseka
in her ruling vide M.A No.622/2010 be set aside.
2.A declaration that the private agreement related to fees
signed between the 1
respondent and the 3
is null and void and unenforceable against the 1
respondent or any other person not a party to it.
3.A declaration that the private agreement related to fees
is not binding and or enforceable against the appellants
or any other person not a party to it.
4.Costs of the appeal be provided for.
The appellants also fled Misc Application No. 646 of 2010 seeking for
orders of stay of the Registrar’s Orders in Miscellaneous Application No.
622/2010.
November 2010 Mulyagonja, J., gave an interim order of
stay of the Deputy Registrar’s Orders and fxed Misc Application No 646
of 2010 for hearing on 19
November 2010, the 1
respondent fled in the Court of
Appeal ,Misc Application 194/2010 seeking a stay of all proceedings
before the Judge in Misc Application No.645/2010 including the
The Assistant Registrar of the Court of Appeal granted the interim
order for stay of proceedings in High Court Misc Applications No.
645/2010 and 646/2010 pending the hearing and determination of the
main application for stay. Mulyagonja, J., on 19
heard and granted the stay in Misc Application 646 of 2010 in favour of
the appellants. Before the hearing of Miscellaneous Application No.
645 of 2010, which was an appeal against the decision of the Learned
Deputy Registrar in Miscellaneous Application No 622 of 2010, the 1
Respondent raised preliminary objections on points of law and prayed
the same be determined before the hearing of the appeal. The learned
judge declined to determine the preliminary objections right away and
instead decided on addressing them in her fnal ruling. The appeal was
heard and on 22
December, 2010 a ruling was given in favour of the
appellants and made the following orders:
“i) …..that the fee agreement entered into between the
respondent frm on 01/09/2009 for
remuneration of OS 009/2009 was illegal and therefore
ii) The charging orders issued by the Deputy Registrar
of this court on the 15/11/2010 in Misc Application
No.622 of 2010 based on the said fee agreement and in
favour of the 3
respondent frm are hereby set aside.
iii) The 3
respondent frm is not entitled to any fees
per agreement, nor to costs in respect of prosecuting OS
009/2009 and Misc Application No 622 of 2010, due to
the misconduct that they displayed before the fling of
OS 009/2009 and in the subsequent proceedings to
recover their alleged fees, per agreement with the 1
iv) Mr. Fred Muwema is hereby suspended from
practicing before the Commercial Court till a complaint
about his misconduct in these proceedings and in
respect of fees of OS 009/2009 is lodged by the Chief
Registrar before the Disciplinary Committee of the
Uganda Law Council, and heard to its fnal conclusion.
v) The costs of this appeal and Misc Application
625/2010 shall be paid by the 3
respondent, in any
event, and there shall be a certifcate for the costs of
the 3 advocates who represented the appellants in this
appeal, and in Misc. Application 625/2010”.
set aside the High Court judgment on the ground that it could not be
allowed to stand because it was a nullity. The second respondent fled a
cross appeal which reads:
“The learned judge found the remuneration agreement
illegal but acted illegally by allowing the appellant frm to
take proceeds of an illegal remuneration agreement and
remitting suit orders’’.
The Court of Appeal further held that the cross appeal sufers the
same fate. The Court of Appeal ordered that the record be returned to
Commercial Court for disposal by another judge. The costs were to
abide the re-hearing.
Dissatisfed with the decision and orders of the Court of Appeal the
appellants have appealed to this Court.
respondent has fled a cross-appeal on one ground and the 1
respondent has fled one ground for afrmation of the decision of the
Court of Appeal. The appellants fled 10 grounds of appeal. I will
reproduce all the above mentioned grounds later in this judgment. During the hearing of the appeal before the Court, the appellants were
represented by Messrs Enos Tumusiime, Andrew Kibaya and Enoch
Mr. Oscar Kihika together with Messrs Elbert Byenkya, Mulema
Mukasa and Siraj Ali appeared for the 1
respondent. Mr. Sekatawa
represented the 2
Mr. Enos Tumusiime, learned counsel for the appellants, argued
grounds 1, 2 and 3 together and ground 4 separately. Mr. Kibaya
argued grounds 7 alone 6 and 8 jointly and 10 separately. Both counsel
argued ground 5 jointly. Counsel for the respondent Mr. Byenkya
argued grounds 1, 2 and 3 together and Mr. Kihika argued grounds 4,
5, 6 and 8 Mr. Siraji Ali argued grounds 7 and 10 and Mr.Sekatawa
argued the cross- appeal.
In this judgment I will deal with the grounds as counsel for the
appellants have argued them. Now I will deal with grounds 1, 2 and 3 of the appeal which read:
1.The learned Justices of Appeal erred in law when they failed
to address and resolve whether the Remuneration Agreement
Respondent and Rock Petroleum (U) Ltd was
illegal. 2.The learned Justices of Appeal erred in law when they failed
enforceable against the Appellants and the 2
3.The learned Justices of Appeal erred in law when they
condoned an illegality which had been brought to their
attention by the Appellants.
The gist of the complaint in the three grounds is that the learned
Justices of Appeal erred regarding the issue of the legality of the
remuneration agreement between the 1
Respondent and Rock
Petroleum (U) Ltd. The complaint can be put into three categories. Firstly that the said agreement was illegal, secondly that the agreement
was unenforceable against the appellants and thirdly that the illegality
was condoned by the Court of Appeal.
In his arguments Mr. Tumusiime contended that the remuneration
agreement is made under the Advocate’s Act.
The agreement in issue stipulates that the advocates are entitled to
costs of the suit and an additional fee which is equivalent to 16% of the
total proceeds of the client’s claim and whatever total sum of the claim
the court shall fnally award or declare to be due to the clients.
In the event of the recovery process being protracted by appeal the
advocates shall be entitled to a further 4% of the total claim. Each of the parties and anyone of those represented by them shall be
irrevocably jointly be bound by the agreement.
The agreement is signed by Muwema and Mugerwa Advocates. Mr.
Fred Nyapida and Mr. Allan Papaok Dokoria signed on behalf of the
Rock Petroleum (U) Ltd.
There is a certifcation by the Notary Public that he had explained the
nature and content of the agreement to the Directors of Rock Petroleum
(U) Ltd, a company seeking excise refund on behalf of numerous
Importers of Diesel and Petrol and they appear to have understood it.
He stated that Miscellaneous Application No.645 of 2010 was brought
under section 62 of the Advocate’s Act for the purpose of challenging
the remuneration agreement as being illegal and unenforceable.
Counsel referred to sections 48,50 and 55 of the Advocate’s Act, and
submitted rightly that section 50 allows an advocate to make an
agreement with his client as to his or her remuneration in respect of
the contentious business done or to be done providing that he or she
shall be remunerated by a gross sum or salary. Section 51 provides that agreements made under sections 48 and 50
must be in writing, signed by the person to be bound and contain a
certifcate by notary public to the efect that a person bound by the
agreement had explained to him or her the nature of the agreement
and appeared to have understood the agreement. The copy of the
certifcate shall be sent to the Secretary of the Law Council. Those who
signed did not explain to the notary public instead it was the notary
public who explained to the persons bound by the agreement its
nature, which in counsel’s view was contrary to the law. The
agreement stipulated that the advocate was to be paid in case of
success. This was illegal according to section 51(2) of the Advocates
Act. Additionally, he argued the appellants did not sign. He submitted that
section 51 of the Advocate Act provides that an agreement under
sections 48 and 50 that does not satisfy the above requirements of the
law is not enforceable. An advocate who obtains or seeks to obtain
beneft under the unenforceable agreement is guilty of professional
misconduct. He submitted further that section 55(1) (b) prohibits an advocate to
prosecute a contentious matter where the payment should be made
only in the event of success. Counsel also referred to regulation No.26
of the Advocates (Professional Conduct) Regulations which prohibits an
advocate to enter into an agreement for sharing of a proportion of the
proceeds of a judgment whether by way of percentage or otherwise,
either as part of the entire amount of his or her professional fees be in
consideration of advancing to a client funds for disbursement. Counsel contended that the remuneration agreement ofended the law
against champerty and maintenance. In support of his submissions on champerty and maintenance he
referred to the judgment of Lord Denning Re Trepaca Mines Ltd
(1962) ALL ER 350 wherein he held that the solicitor could not recover
his fees if he too was guilty of champerty. He relied on a Tanzanian High Court authority of Mkono & Co
Advocates V JW Land War [1977] Ltd [2002] EA 145 wherein
Karegeya, J, held that an advocate who had entered into an agreement
with the defendant for a success fee of 7% on the amount for the debt
recovered from the government could not have it enforced by court. Counsel contended that because of the illegalities pointed out above the
remuneration agreement was illegal and unenforceable. He submitted
that it is trite that the court will not condone or enforce an illegality. In support of that submission he relied on Active Automobile Spares
Ltd V Crane Bank Ltd and Anor, (Supreme Court Civil Appeal No 21
of 2001). For the proposition that no court ought to enforce an illegal
contract if the illegality has been brought to its notice, where the
person seeking the aid of the court is party to the illegality.
He quoted Makula International Ltd V His Eminence Cardinal
Nsubuga and Another [1982] HCB 13 for the holding that a court of
law cannot sanction what is illegal and once an illegality is brought to
the attention of the court it overrides all questions of pleading
including any admissions made.
He referred to section 19(2) of the Contract (Act No. 7 of 2010) which
prohibits the enforcement of agreements whose objects are unlawful
and no suit shall be brought to enforce such contract. He submitted
that by the time Miscellaneous Applications No. s 622 of 2010 and 645
of 2010 were fled the new Contract Act was in force.
Counsel pointed out that the Court of Appeal received an appeal which
was based on the ground of illegality and enforceability but did not deal
with that issue. He argued that throughout the proceedings in all
courts the respondent has never disputed the fact that the
remuneration agreement was illegal.
In reply to grounds 1, 2 and 3 Mr. Byenkya supported the decision of
the Justices of the Court Appeal. He contended that they did not
condone an illegality as alleged by counsel for the appellants. He
argued that Justices of Appeal considered the remuneration agreement
and stated that it is governed by section 50, 51, 54 and 61 of the
Advocates Act. They went on to hold that the learned judge should
have considered the remuneration agreement according to the above
provisions of Advocates Act.
In case she had found the agreement to be unfair or unreasonable she
would have declared it void. She would have ordered for its cancellation
and order for the costs covered by it to be taxed as if the agreement had
never been made and also make further orders as to the costs of the
Counsel argued that from what the Justices of Appeal decided, the
remuneration agreement is merely voidable and not void abnitio.
He contended that what the learned Justices of Appeal did not
determine is a question of enforceability which they returned to the
High Court for determination.
It was Mr. Byenkya’s submissions that all statutory requirements
necessary to render the remuneration agreement valid were complied
with. He argued that the representative Order gave Rock Petroleum (U)
Ltd implied power to employ an advocate and anything that could be
done in so employing an advocate.
According to counsel, this included entering into a remuneration
agreement with the 1
respondent on behalf of all the Oil Companies
which included the ten appellants. Rock Petroleum (U) Ltd signed on
Regarding the explanation by the Notary Public he argued that it was
correctly done. He submitted that the intention and the reason why
they send these people to a Notary Public to certify that the person
before him has understood. He relied on Odgers, Construction of
Deeds and Statutes, 5
Ed, by Gerald Dworkin Sweet and Maxwell, at
page 240 -243. Where it is stated:
Counsel denied that the remuneration agreement did not stipulate that
there would be no payment in case of failure. Counsel contended that
the common law of champerty and maintenance is no longer relevant in
many countries because of the existence of a strong judicial system and
local statutes which regulate the conduct of advocates. He argued that
such a situation allows the public access to justice.
Counsel relied on the case of Price Water House Coopers Inc & 4 Ors
v National Potato Cooperative Ltd, case No.448/02; The Supreme
Court of Appeal of South Africa and submitted that it was more
persuasive than the Tanzanian case of Mkono & Co. Advocates v J W
Ladwa (supra) because it was from a court of similar jurisdiction. He
argued that their Lordships from the South African Supreme Court had
found that champerty and maintenance are no longer relevant
principles of common law. He referred to paragraph 32 which says:
“The law of maintenance and champerty developed out of
the need to protect the systems of civil justice, and the civil
justice system has developed its own inner strength so the
need for the rules of maintenance and champerty has
diminished if not entirely disappeared.”
It is important for the sake of clarity to reproduce in this judgment the
remuneration agreement in issue which was signed between the 1
respondent and Rock Petroleum (U) Ltd on 1
September 2009. The
agreement states as follows:
“This Agreement made this 1
day of September 2009
Between Muwema & Mugerwa Advocates of P.O. Box
6074 Kampala (hereinafter referred to as the
“ADVOCATE” which expression shall include their
successors and assigns) on the one part and ROCK
PETROLEUM (U) LTD which was granted permission by
Court to sue the URA in representative suit on its behalf
and on behalf of numerous importers of Diesel and
Petrol seeking refund of monies illegally collected by
URA on Excise Duty [hereinafter referred to as the
“CLIENTS” which expression shall include succors and
assigns] on the other part. WHEREAS:
1. The client has instructed the Advocates to research and
investigate the viability of maintaining legal action
against Uganda Revenue Authority and thereafter pursue
appropriate action in respect of a refund of monies
allegedly collected as Excise Duty in the 2007 /2008
2.The subject matter is involving, big and complex and the
Advocates have agreed with the clients for a negotiated
fee over and above what is provided in the Advocates
Remuneration Rules.
3.Further in consideration of the Advocates meeting all
necessary statutory and contingency expenses required to
1.The Advocates shall be entitled to costs of the suit and an
additional fee which is equivalent to 16% of the total
2.In the event the Recovery process is protracted by Appeal
process Advocates shall be entitled to a further 4% of the
3.Each of the parties and/or any one of those represented by
them shall be irrevocably jointly and severally bound by the
WHEREOF the parties have laid their respective hands, the day, frst
Signed this _____________day of _______________________2009 by said __________________
1.Fred Nyapidi ____________________
MANAGING DIRECTOR ROCK PETROLEUM 2.ALLAN PAPAOK DOKORIA ___________________________
DIRECTOR ROCK PETROLEUM
I have witnessed and executed this Agreement as a Notary Public Name:_________________________________________________________
KAMPALA”. I have carefully perused the agreement and listened to the arguments
of counsel for both parties.
According to the provisions of the above agreement it is clear that the
respondent was to handle a contentious matter for his client.
Section 50(1) of the Advocates Act allows the advocate to make an
agreement with his client in contentious matters.
(1)“Notwithstanding any rules for the time being in force, an
advocate may make an agreement with his or her client as
to his or her remuneration in respect of any contentious
business done or to be done by him or her providing that
he or she shall be remunerated either by a gross sum or by
This position has been held by this court in Kituuma Magala &Co
Advocates Vs Celtel (U) Ltd, [2001-20005] HCB Vol 3 at 72 that
advocates are free to enter into remuneration agreements with their
clients in terms of section 48 and 50 of the Advocates Act as long as
these agreements comply with the requirements provided by section 51
of the Act otherwise they are not enforceable.
One of the issues for determination in the appeal in grounds 1, 2 and 3
before us is whether the agreement in issue complied with the required
conditions by the law.
The agreement provides: “The Advocate shall be entitled to costs of the suit and an
proceeds of the clients, claims or whatever total sum of the
“In the event the recovery process is protracted by appeal
total claim”.
One has to consider the terms of the remuneration agreement in issue
in light of section 50 (1) of the Advocates Act. The agreement provides
for costs of the suit and an additional fee of 16% of the total proceeds of
the clients’ claims and 4% in case of a protracted recovery process by
way of appeal. The agreement in the instant case is for contentious
business as it involved court action. The remuneration stipulated in
this fee agreement is in form of percentages and not a gross sum or
salary as provided for in section 50(1).This makes the remuneration
agreement illegal as per section 50(1) of the Advocates Act.
Counsel for the appellants submitted that all the requirements under
section 51 were not complied with specifcally subsection (1) (b) and
(c).Counsel for the 1
respondent in reply submitted that all the
conditions had been satisfed.
I must take into account the fact that the representative order issued on 7
April 2009 only gave Rock Petroleum (U) Ltd. power to sue on behalf of the other oil companies and give notice of the institution of the suit to all said importers by public advertisement in a newspaper of
wide circulation in Uganda. The advertisement is dated 22
The representative order did not provide anywhere that Rock Petroleum
(U) Ltd can enter into a remuneration agreement. The remuneration agreement was only signed by Allan Papaok Dokoria,
director of Rock Petroleum (U) Ltd. The 10 Appellants did not sign any
where on this remuneration agreement as provided for in Section 51 (1)
(b). Granted the fact that Rock Petroleum acting on behalf of the 10
Appellants obtained the legal services of the 1st Respondent frm, the
10 Appellants were not aware of the said remuneration agreement as
they did not sign anywhere on it. This means that the Appellants did
not authorize Rock Petroleum (U) Ltd to enter into such an agreement
later or intended to be bound by its terms. The agreement thus does
not comply with Section 51(1) (b). When one gives powers to sue by
way of a representative action, in my view, that does not necessarily
include making a remuneration agreement of this nature such as the
one under consideration in this case, without further reference to the
Be that as it may the agreement satisfed requirements of section 51(1)
(c) of the Advocates. It was in writing and the Notary Public explained
the contents of the agreement to the Directors of Rock Petroleum (U)
Ltd and the agreement was sent to the Secretary of the Law Council.
The argument by Mr. Tumusiime that it was the directors of Rock
Petroleum (U) Ltd to explain the contents of the agreement to the
Notary Republic is not, with due respect, correct. This is contrary to
the intention of the Advocates Act which was enacted to protect the
public see SV Pandit V William Mukasa Ssekatawa and Others
[1964] E.A at pg 490.
Section 51(1) (C) provides: “ (1) An agreement under section 48 and 30 shall-
(a) ………………………………………………………..
(b)……………………………………………………………
(c)contain a certifcate signed by a notary public (other
than a notary public who is a party to the agreement) to
the efect that the person bound by the agreement had
explained to him or her nature of the agreement and
appeared to understand the agreement. A copy of the
certifcate shall be sent to the secretary of the Law
Council by prepaid registered post.”
I am of the considered view that interpreting this provision literally
would defeat the intention of the legislature which is to protect the
clients who are less enlightened than advocates about legal matters. It
is clear that the person to be bound by such agreement is the one to be
explained the nature of the agreement and then that person satisfes
the notary public that they understand or appear to understand its
provisions. The appellants who, it is claimed, were to be bound by this
agreement were not even brought before the notary public. It is not
sufcient that the advocate and Rock Petroleum (U) Ltd. above should
appear. Each person bound had to appear and satisfy the Notary Public
that they understood the nature of the agreement. This was never
I have considered the argument by counsel and the authorities quoted
by counsel on champerty and maintenance. The law prohibiting such
practices by advocates has been codifed in the Advocates Act and
Regulations made there under .Mr. Byenkya’s argument that because
we have a strong legal system these two are no longer ofences is, with
respect, not correct. Champerty and maintenance are against Public
“The reason why the common law condemns champerty is
because of the abuses to which it may give rise. The common
law fears that the champertous maintainer might be
tempted, for his own personal gain, to infame the damages,
to suppress evidence, or even to suborn witnesses.”
In the case of Mkono & Co. Advocates v J W Ladwa (supra) the
doctrines are still applicable in Tanzania under the reception clause
notwithstanding the fact that even in the country of their origin they
have undergone some changes. For this reason, I fnd this Tanzanian
case more persuasive than the South African case of Price water
House Coopers Inc & 4 Ors v National Potato Cooperative Ltd, case
(supra). The argument by counsel for the 1
champerty and maintenance doctrines are not relevant any more to our
legal jurisprudence because of statute law and the strong civil justice
system is not plausible. Champerty and maintenance doctrines have
been codifed in the Advocates Act. It is now not only a matter of
common law, but also statute law protecting the public. This court
must also take into account the level of civic education of the general
population and the numerous complaints made by lay people against
advocates’ malpractices.
Counsel for the appellants stated that the agreement stipulated for
payment only in the event of success. It was contingent upon the
success of the suit. Counsel for the 1
respondent denied this
allegation. The agreement stipulated for ‘‘an additional fee which is
equivalent to 16% of the total proceeds of the clients’ claims or
whatever total sum of the claim that the court should fnally award or
declare to be due to the clients.’’ It follows that if the court fnds
otherwise and does not make any awards, then the fee of 16% is not
payable. This is fees contingent on success. It is not allowed.
Having considered that the 1
respondent sought to share in the
proceeds of the appellants claim at 16% as per the remuneration
agreement, the remuneration agreement is champertous in nature. It is
therefore illegal and unenforceable and the 1
respondent cannot seek
to enforce it. In Active Automobile Spares Ltd v Crane Bank Ltd &
Rajesh Pakesh (supra) it was held that no court ought to enforce an
illegal contract if the illegality has been brought to its notice, where the
Now I consider whether the learned Justices of the Court of Appeal
condoned an illegality.
In their judgment the learned Justices of Appeal did not consider the
issue of the illegality of the remuneration agreement. With due respect,
they concentrated on the fact that the judge proceeded with the
hearing of the case when there was an interim order of stay from the
Assistant Registrar. They simply stated that the agreement is governed
by sections 50, 51, 54 and 61 of the Advocates Act. Their fnding has
been echoed by Mr. Byenkya who contended that the Court of Appeal
decided that the remuneration agreement is merely voidable and not
void abnitio and that what they did not decide was the question of its
enforceability and they returned it to the High Court for determination.
With due respect, I do not agree with Mr. Byenkya’s submission on this
point. According to the judgment of the Justices of the Court of Appeal
they merely outlined the procedure the learned judge should have
followed in determining whether the agreement in issue was illegal or
not. They did not consider the question of illegality that was argued
before them. Their main focus was on the fact that the learned judge
proceeded to hear Misc Application No.645 of 2010, and 646 of 2010,
inspite of the fact that there was an interim order of stay of those
proceedings which was granted by the Assistant Registrar of the Court
of Appeal in Msc Application No 194 of 2010.In my view, the learned
Justices of the Court of Appeal should have decided the issue of the
legality of the remuneration agreement.
Grounds 1, 2 and 3 should succeed. 28
The learned Justices of Appeal erred in law and fact in holding
that the interim order issued by the Registrar of the Court of
Appeal in Miscellaneous Application No.194 of 2010 “had not
been withdrawn as argued by the Respondents.
Mr. Tumusiime for the appellants vehemently argued that, Misc.
Application No.194 of 2010 had been withdrawn from the Court of
Appeal. He submitted that on 22
November 2010, there was a letter
by Mr. Kiggundu of Muwema & Mugerwa & Co. Advocates withdrawing
Miscellaneous Applications No.193 and 194 which had been over taken
by events after the High Court disposed of Miscellaneous Application
No.646 of 2010.This letter was endorsed on by the Registrar of the
Court of Appeal and copied to Tumusiime & Kabega & Co. Advocates,
Shonubi ,Musoke & Co. Advocates and Birungi, Barata & Co.
Advocates and their frm received that letter. He submitted further that on 23
November 2010, the parties went to
court, Tumusiime, Kabega & Co, Advocates opposed the withdrawal
under rule 94 of the Court of Appeal rules, which is to the efect that if
the other party does not consent to the withdrawal, the application or
suit is dismissed with costs. However, the Registrar ignored the
application and decided to grant the withdraw without costs.
Counsel for the 1
respondent in response argued that the parties
attended court on 23
November 2010, after the withdrawal letter was
endorsed with the words withdrawn with no order as to costs by the
Registrar. The record of appeal shows that the Assistant Registrar of
the Court of Appeal entertained arguments for both sides about the
withdrawal. The Assistant Registrar, adjourned court and was to deliver
his ruling on 26
November 2010 at 02:30 p.m. However, there is
nowhere on the record that this ruling was delivered. Mr. Kihika also argued that the letter which is annexture F to the
application for withdrawal of the record of appeal does not bear the
endorsement of the Assistant Registrar. He submitted that
Miscellaneous Application No.194 of 2010 was never withdrawn.
The arguments by counsel for both parties and the record of
proceedings in Court of Appeal do not show a clear picture of what
actually happened in Misc Applications No 193 of 2010 and 194 of
2010 apart from the fact that there was an interim order of stay by the
Assistant Registrar of the Court of Appeal.
respondent maintains that Miscellaneous
Application No.194/2010 was never withdrawn. Annexture F to the
application for withdrawal is the same letter that Counsel for the
appellants relies on to prove the withdrawal. There is something
suspect about the two letters since the one relied on by counsel for the
appellants bears the endorsement of the Assistant Registrar of
withdrawal with no order as to costs whereas the one relied on by
respondent bears no such endorsement. Counsel for
the appellants argued that it is this same letter that was copied and
served to all the parties. It is, therefore, surprising that one of the
letters does not bear the Assistant Registrar’s endorsement. There is no
evidence on the record to prove withdrawal of Miscellaneous
Application No.194/2010. That notwithstanding the learned judge who
tried Misc Application No 645/2010 was aware that Court of Appeal
Misc Application No 194/2010 was not withdrawn.
The Court of Appeal considered this submission which was ground 7 of
appeal. In her lead judgment Mpagi DCJ, as she then was, quoted
from the Mulyagonja, J. judgment thus:
“The Interim Order dated 18
November, 2010 stayed all
proceedings in Misc Appl. No.645/2010 and 646/2010 in the
High Court pending the hearing and determination of Misc.
Application No.194/2010. I proceeded to hear the application for stay in Misc. Appl.
646/2010 inspite of the interim order issued by the Registrar
of the Court of Appeal to stay proceedings and the complaint
about me to the Principal Judge. And with all due respect
the learned Assistant Registrar, his intervention in the
matter at that premature stage was similar to the actions of
the proverbial bull in a china shop…
I am constrained to point out not only is it embarrassing for
a judge of High Court to receive an order from a Registrar,
through the Court of Appeal, to stay all proceedings before
him/her but it is a challenge by the Registrar of the judge’s
jurisdiction in his or her own court. No judge should be
faced with a battle for his or her jurisdiction as such, as
happened in this case with any registrar…
.. I am therefore of the opinion that the complaints raised by
respondent in Misc. Application 194/2010 now before
the Court of Appeal do not hold any water because the
questions that were raised in Misc. Application 625/2010 are
no longer in issue in any pending suits or application in this
court. If they were, they were conveniently overtaken by the
decision of the Deputy Registrar that ordered the 2
respondent to pay the monies that the 3
claimed under their remuneration agreement. It was the
reasons above that I was not deterred from proceeding to
hear this application either because the 3
frm’s intended to appeal and/or by His Worship Nzeyimana’s
order staying these proceedings. In any event the intended
appeal is without any doubt in my mind premature and
“It cannot be put any clear that the interim order had not
been withdrawn as argued by the respondents. The learned
judge made it clear that she would not be deterred by orders
issued by the Registrar of the Court of Appeal”.
Mpagi Bahigeine DCJ (Rtd) concluded by referring to the legal nature of
interim orders and that they have to be obeyed by court whether lawful
or not and that disobedience of such orders renders subsequent
proceedings null and void.
This rule gives Registrars the jurisdiction to hear and grant interim
orders. However, this power must be exercised judiciously and not
abused. The Assistant Registrar, Mr. Deo Nzeyimana, issued an interim
order in M/A 194/2010 to stay all proceedings before Mulyagonja, J.,
in M/A 646/2010 and M/A 645/2010. The Assistant Registrar issued
the interim order without a clue about the facts regarding the appeal
before Justice Mulyagonja, save what had been selectively placed before
him by the 3
respondents in Court of Appeal M/A 194/2010.This is
why he failed to appreciate the fact that the interim order issued was
only to last for a day as it was issued on 17/11/2010 and would lapse
on 19/11/2010 when the substantive application for stay of execution
would be heard inter parties on 19/11/2010 .The Assistant Registrar
by issuing an interim order to stay the proceedings in the High Court
was a premature step and an abuse of court process. Article 139(1) of the Constitution gives the High Court unlimited
original jurisdiction in all matters. The Constitution being the supreme
law of the land, this power enshrined in Article 139(1) of the
Constitution reigns over the power issued in a practice direction for
purposes of doing justice like in the instant case where court process
The Registrar by issuing an interim order without frst understanding
the circumstances of the case was a misuse of his powers and an abuse
of court process that the Supreme Court cannot shut its eyes to.
The trial by Mulyagonja J proceeded well conscious of the fact that the
Assistant Registrar was not aware of the full facts of the appeal. As
observed in the judgment there was nothing to stay and Misc
Application No.625 of 2010 had already been disposed of by the
Registrar’s charging orders in Misc Application No.622 of 2010.
The Learned Justices of Appeal, therefore, erred in declaring that the
judgment in Misc Application No.645/2010 was a nullity because the
judge disobeyed the interim order issued by the Assistant Registrar. I would venture to add that a closer perusal of the record of appeal
shows that Muwema &Co, Advocates, were out to fle any application
which, in my view, was on the verge of abuse of court process. They
were all out to make sure that Mulyangonja, J., did not proceed to hear
the applications so long as they could use some provision of the law
and block her court proceedings. When counsel uses such means to
deter the judge from administering justice one wonders whether the
constitutional provisions of Article 126(2) (e) are observed.
Ground four should succeed. Ground 5:
The learned Justices of Appeal erred in law when they held,
“The learned trial Judge therefore was in error to interfere with
the order of costs OS 009/209”
Mr. Tumusiime for the appellant argued that Muwema & Co Advocates
were not entitled to costs at all because they had a remuneration
In support of his argument he relied on Mutoigo V Shell (U) Ltd (High
Court Misc Application No. 0068 of 2007) which is to the efect that
where an advocate has a remuneration agreement with the client for
contentious business an advocate cannot present, an advocate/client
In reply, Byenkya supported the fnding of the Justices of Appeal. He
argued that Mulyagonja, J., did not have powers to countermand the
orders of a fellow judge. He contended that she could not use section
69 of the Advocates Act because no ofence was committed during the
proceedings in Miscellaneous Application No 645 of 2010.
Mr. Byenkya argued that the learned judge considered Misc
Appl.No.645 of 2010 as a taxation reference/appeal under section 62 of
the Advocates Act. The application was in fact against the order of the
Deputy Registrar in Misc .Appl.No.622 of 2010, allowing the charging
fees of 16% on the claim sum due to the respondents from URA as
decreed by Mukasa, J., in OS 009/2009.
Counsel argued further that Mukasa, J., relied on Section 27 of the
Civil Procedure Act which provides that costs follow the event. He then
went ahead to award costs of the suit to the plaintif.
The learned judge purported to act under section 69 of the Advocates
Act to set aside an order for costs made by another judge. Section 69
“No costs shall be recoverable in any suit, proceedings or matter by any person in respect of anything done, the doing of which constituted an ofence under this Act, whether or not any prosecution has been instituted in respect of the ofence.”
The proceedings in question were in OS 009/2009 which were before
Mukasa, J., and not Mulyagonja, J. They were properly concluded and
Mukasa, J., went ahead to award costs. No ofence was committed
during these proceedings. 37
According to my reading of the Record of Appeal, Mukasa, J. gave inter-
alia the following orders:
According to order 4 “The defendant shall refund to each
of the Diesel and Petrol importers all moneys so
collected in excess”
5. “The defendant doth pay the costs of this suit” Mukasa,J., did not at all refer to the illegality in the remuneration
agreement. This is because he was not aware of the existence of a
remuneration agreement and apparently the 1
respondent tried to
conceal this fact. His order was simply that the defendant was to pay
costs. The defendant was URA (the second respondent in this appeal).
I am of the considered view that Mulyagonja J having found the
remuneration agreement illegal, she had the right not to allow the costs
as per the agreement. She did not interfere with the award of costs
made by Mukasa, J. OS 9 of 2009 was between Rock Petroleum (U) Ltd
suing by representative action on behalf of numerous importers of
Diesel and Petrol in Uganda and Uganda Revenue Authority. In his
judgment Mukasa J. stated as follows:
“Unless Court has reason to order otherwise costs follow the
event See, Section 27 of the Civil Procedure Act. I have no
reason to order otherwise. So the plaintif is awarded cost
of this suit”.
Mulyagonja J rightly exercised powers under section 69 of the
Advocates Act after having found the fee agreement champertous which
is an ofence under section 55 of the Advocates Act. Similarly, she held
in her judgment, the Deputy Registrar of the Commercial Court did not
have the powers to alter the order of Mukasa, J. The order was that the
defendant who is the 2
respondent in this appeal was to pay the costs
and not the appellants. Ground fve should succeed.
“The learned Justices of Appeal erred in law when they
failed to address and resolve the ground of the 1
Respondent’s misconduct before Court in Misc. Application
No.645 of 2010.”
“The learned Justices of Appeal erred in law when they held that
the learned judge had no power to discipline Mr. Fred Muwema of
Respondent frm.”
The complaint in both grounds is that the learned Justices of Appeal
erred when they failed to address the conduct of counsel Muwema and
held that Mulyagonja, J., had no jurisdiction to discipline him.
Mr. Kibaya referred to section 17 of the Advocates Act and submitted
that the judge had powers to discipline Mr. Muwema. He contended that the provisions of section 17 of the Advocates Act give
the court powers to deal with the misconduct of an advocate. Counsel
submitted that regardless of the Court of Appeal’s reference to section
20 and 25 of the Advocates Act which provide for reference of Advocates
to the Law Council for Disciplinary action, those sections are subject to
section 17 which is intended to preserve order in the court. He argued
that in the instant case the judge mentioned the particular instances of
Counsel contended that the judge was meticulous in what she
considered to be misconduct. He further argued that though she could
have been wrong she had the jurisdiction. He submitted that the
punishment given was interim in nature.
In reply, Mr. Kihika supported the fnding of the Justices of Court of
Appeal that the learned judge had no power to discipline Mr. Muwema.
The only power she had was to charge him with contempt of court.
In their judgment the Justice of Appeal considered the provisions of the
Advocates Act relating to the disciplining of an advocate like in the
instant case. They held that the judge could only charge counsel
Muwema with contempt of court and not to suspend him until his case
had been fnally determined by the Law Council.
With due respect to the Learned Justices of Appeal, I disagree. Mr.Muwema behaved unprofessionally throughout the entire
proceedings. Mulyagonja, J., noted that Mr.Muwema requested that the
events that took place on the afternoon of 17
/11/2010 in her
chambers are not put on record. However, because Mr.Muwema
misrepresented the events that took place in the judge’s chambers on
17/11/2010, Mulyagonja J. decided to put them on record.
Mr.Muwema appeared in her chambers and was informed about a letter
that contained a complaint lodged by his colleagues M/s Kabega &
Tumusiime against the Deputy Registrar in respect of Misc Applications
622/2010 and 625/2010 and that she was to meet them about the
complaint that afternoon.
When Mr. Muwema read the letter containing the contents of the
complaint, he became very angry and began to complain in a very loud
voice accusing Mr. Tumusiime and his colleague of trying to cheat him
of the fees due to his frm on account of the fee agreement because he
was younger than them. The judge informed Mr. Muwema and his
colleague, Siraj Ali, that an interim order should issue to stay execution
so that the application for stay of execution vide M/A 646/2010 and
the appeal vide M/A 645/2010 pending before court could be heard.
Mr. Muwema completely lost control. He began to shout and accuse the
judge of siding with Mr. Tumusiime and his colleague Mr. Muwema
demanded that the judge issues the order of stay of execution
immediately. The judge together with Mr. Kiggundu Mugerwa (partner
of Muwema) tried to cool down Mr. Muwema. The judge inquired
whether the three advocates would be interested in staying in the
judge’s chambers so that they agree on the course of action about the
matter between Mr. Muwema’s law frm, Mr. Tumusiime and his
colleagues, but Mr. Muwema declined to stay. On 17/11/2010, the judge by virtue of her powers under section 98 of
the Civil Procedure Act issued an interim order which was to hold for
two days until 19/11/2010 when the substantive application was to be
heard inter parties. On 18/11/2010,Mr.Muwema and his colleagues
lodged a notice of appeal in the High Court appealing against the
interim order for stay of execution. They also obtained an interim order
from the Assistant Registrar of Court of Appeal in M/A 194/2010 to
stay all proceedings before Justice Mulyagonja. They also lodged a
complaint against Mulyagonja J before the Principal Judge that she
had a personal interest in the matter that is why she had issued the
At the hearing of M/A 645/2010 on the 19/11/2010,Mr.Tumusiime
stated that he would deal with the preliminary points of law in his
submissions in the appeal. Mr. Muwema objected to this mode of
proceeding arguing that the court was under obligation to dispose of
the preliminary points before proceeding to the appeal. Mulyagonja J
ruled that the appeal proceeds on its merits and that the preliminary
points of law would be dealt with in her judgment. Mr. Muwema made
an application that the judge disqualify herself because she was biased.
At some point during the submissions the application degenerated into
a personal afront in which Mr. Muwema treated the judge like a
criminal or witness under cross examination as follows:
“Muwema; ….You are not a proper judicial ofcer to
continue hearing this matter.
Tumusiime; I wish to interject. The manner in which my
learned friend is addressing court is not proper.
Court; Let him have his day in court. He is a party to
the suit, not just counsel.
Muwema; I put it to you that you are not the proper
judicial ofcer to hear this matter.
Court; It seems I am on trial here. Mr.Muwema, are you
now cross-examining me?
Muwema; No I am not.(He continues in an accusatory
manner.)Even the ruling that you have just read
appears to have been pre-written….”
The judge stated that, this was an unfortunate occurrence in which a
judge’s jurisdiction and competence were challenged in a fully packed
court room in an embarrassing manner and without any warning. I
entirely agree with the learned judge.
Mr. Muwema should have followed the proper procedure if he wanted
the judge to recuse herself from hearing the case. This procedure was
laid down in the case of Meera Investments Ltd v The
Commissioner General of Uganda Revenue Authority CACA No.15
of 2007 where in the Court of Appeal referred to the East African case
of A.G v Anyang’ Nyongo & others [2007]1 E.A 12 at page 20.Court
“With regard to an application for a judge to recuse himself
from sitting on a Coram, as from sitting as a single judge,
the procedure practiced in the East African Partner States,
and which this court would encourage litigants before it to
follow, is similar to what was succinctly described by the
Constitutional Court of South Africa in The President of the
Republic & 2 Others vs. South African Rugby Football Union
& 3 Others, (Case CCT 16/98) (the S.A. Rugby Football union
Case). The court said at paragraph 50 of its judgment:
“….The usual procedure in applications for recusal is
that counsel for the applicant seeks a meeting in
chambers with the judge or judges in the presence of
[the] opponent. The grounds for recusal are put to the
judge who would be given an opportunity, if sought, to
respond to them. In the event of recusal being refused
by the judge the applicant would, if so advised, move
the application in open court.’
The rationale for and beneft from that procedure is
obvious. Apart from anything else, in practical terms it
helps the litigant to avoid rushing to court at the risk
of maligning the integrity of the judge or judges and of
the court as a whole, without having the full facts, as
clearly transpired in the instant case.”
Considering the professional misconduct displayed by Mr.Muwema
both in the judge’s chamber’s and open court room ,the judge had the
power to discipline Mr. Muwema as an advocate under Section 17 of
the Advocates Act which provides;
“ Nothing in this Act shall supersede, lessen or interfere with
the jurisdiction of any court, inherent or otherwise, to deal
with misconduct or ofences by an advocate, or any person
entitled to act as such, committed during, or in the course
of, or relating to, proceedings before the court.”(emphasis
added) Mr. Muwema‘s misconduct was displayed throughout the entire
proceedings as stated above. His colleague Mr. Mugerwa made an
attempt to apologize for Mr. Muwema’s misbehavior but the judge
refused stating that it was Mr. Muwema’s duty to apologize and not
Mr.Mugerwa’s duty. The judge therefore had the jurisdiction to deal
with the misconduct of Mr. Muwema.
Section 74 of the advocates Act provides for disciplinary ofences by
advocates. Section 74(1) (i) provides for misleading or deceiving a client
in any respect material to the client. Mr. Muwema made the matter
seem so big and complex to the client as indicated in the fee agreement
to the extent that there were necessary statutory and contingent
expenses to be made so as to pursue the matter which amounts were
never clearly explained to the clients.
Section 74(1)(j) provides for contempt of court which was manifest by
Mr. Muwema loudly accusing the judge of bias in a fully packed court
room yet there is a clear procedure to be followed in case a judge is to
recuse him/herself from hearing a matter.
Mulyagonja, J., therefore, had the jurisdiction under Section 17 of the
Advocates Act to discipline Mr. Muwema for his misconduct displayed
throughout the proceedings in M/A 645/2010.She was right to
suspend him from her court until disciplinary proceedings before the
Law Council were heard to their fnal conclusion as the procedure
stipulates in Sections 20 to 25.The judge, however, should only have
suspended Mr. Muwema from appearing in her court for the particular
proceedings and not the entire Commercial Court. Suspending Mr.
Muwema from appearing in the entire Commercial Court went beyond
the judge’s powers. She seems to have done this not as a judge
presiding over particular proceedings but as Acting Head of the
Commercial Court. That was wrong. I am of the considered opinion that it is not only the judge who must keep the good conduct in court. Counsel must also do so. That is the import of section 17 and 74. In case counsel has not done so the appellate court should not only condemn the judge. It is duty bound to
observe counsel’s conduct as well and make appropriate remarks in the
judgment. Unfortunately the Justices of Appeal said nothing about Mr. Muwema’s conduct. Grounds 6 and 8 should be allowed partially. 47
The learned Justices of Appeal erred in law when they allowed Ground
No.6 of the Appeal, “….that the learned trial judge exhibited bias
and animosity to the Appellant frm during the hearing and
determination of Misc Application No.645 of 2010 thereby
occasioning miscarriage of justice.”
Mr. Kibaya counsel for the appellants rightly complained that in their
judgment the learned Justices of Appeal used the word animosity
whereas that word had been dropped during the conferencing stage
and, therefore, what was left in this appeal is bias.
Counsel contended that the learned Justices of Appeal were wrong to
hold that the judge was biased. He argued that the fact that the judge
has made a decision you do not like is not evidence of bias and the fact
that she has used strong words is not also bias. He argued that the judge was alive to the law against bias and
considered relevant legal authorities on the matter. She found that the
lawyers misconducted themselves and her skills as a judge were put to
great test. Counsel argued that all those fndings of the judge might be
wrong and the judge is always allowed to be wrong when that happens
the aggrieved party can appeal. 48
He argued that bias must be from outside but not from the proceedings
themselves. He argued further that when you object to the judge that
she/he is biased you are choosing the judge to try your case.
In support of his submissions, counsel relied on Uganda Polybags Ltd
v Development Finance Bank Misc.Appln.No.2 of 2000 where this
“Before we take leave of this matter we would like to
reiterate our concern which was expressed in Constitutional
Petition No.1 of 1997 Tinyefuza v Attorney General and JM
Combined vs A.K Detergents over the growing tendency to
level charges of bias or the likelihood of bias against
judicial ofcers, We would like to make it clear that
litigants in this country have no right to choose which
judicial ofcers should hear and determine their cases. All
judicial ofcers take the oath to administer justice to all
manner of people impartially and without fear, favour
afection or ill will.”
In reply, Counsel for the 1
respondent, Mr. Ali, argued that the test to
be applied in determining whether a judicial ofcer is biased is set out
in the case of GM Combined Ltd v AK Detergents (U) Ltd Supreme
Court Civil Appeal No.19 of 1998 where Justice Oder stated with
approval in Exparte Barusley and District Licensed Valuers
Association (1960)2 QBJ 169.
“In considering whether there was a real likelihood of bias;
the court does not look at the mind of the justice himself or
at the mind of the Chairman of the tribunal or whoever it
may be who sits in a judicial capacity, it does not look to see
if there was a real likelihood that he would or did, in fact
favour one side at the expense of the other. The court looks
at the impression which he would give to other people. Even
if he was impartial as could be, on his part, then he should
not sit. And if he does sit, his decision cannot stand .Never
the less there must appear to be a real likelihood of bias
.Surmise or conjecture is not enough. There must be
circumstances from which a reasonable man would think it
likely or probable that the justice or chairman as the case
may be would think it likely or probable that the court will
not inquire whether he did in fact favour one side unfairly.
Sufce is that reasonable people might think he did. The
reason is plain enough. Justice must be rooted in confdence:
and confdence is destroyed when right minded people go
away thinking: The judge was biased.”
respondent argued that the judge according to the
record of appeal took judicial notice of the decision in
Misc.Appln.No.376, Muwema & Mugerwa v URA, which decision was
not appealed against and was concluded in 2007.
Counsel argued that the trial judge investigated the matter by taking
judicial notice of the similarity and made an efort to peruse the
various rulings and orders related to the matter as well as the
proceedings in the main suit. Counsel argued further that it is after the
trial judge’s investigations in this matter that she found the 1
respondent who was the 3
respondent in Misc.Appln.No.645 of 2010
to be guilty of professional misconduct. She punished them by
countermanding the order of costs that had been granted to them in
O.S 09 of 2009.Counsel submitted that the learned trial judge acted as
an accuser because nobody had raised the accusations before her. She
therefore, acted as a judge, investigator, and prosecutor thus exhibiting
bias. Counsel referred this court to the judge’s ruling; she stated that her
skills as a judge were tested during the hearing of the appeal and that
never before during her practice as a judicial ofcer had she met such
cunning and deceit in judicial proceedings as she did with the group of
lawyers that had been brought to account.
Counsel submitted that if we apply the test set out by Justice Oder in
G.M Combined Limited v A.K Detergents Uganda Ltd (supra), a right
thinking person who attended court that day would leave with the
impression that the learned trial judge was biased. This was a strong
statement. The only impression such a person would get was that the
learned trial judge was not fair and that she had taken sides. The other
instance of bias cited by Counsel Ali for the 1
respondent is that Misc.
App No.646/2010 was unopposed and the trial judge gave costs for 3
counsel. He contended that bias is manifested when the trial judge
singled out only the 3
respondent to pay costs yet there were other
respondents. To award costs for 3 counsel must be based on clear
grounds like complexity of the case. The judge was wrong to award
costs for 3 counsel in this case.
Taking into account the quotation made, it’s obvious that counsel
Muwema was trying to choose a judge for himself. See Uganda
Polybags Ltd V Development Finance Bank (supra).
The authority of G.M Combined Limited v A.K Detergents Uganda
Ltd (supra), is not applicable at all because any person who was
present in court would have observed the conduct of Mr.Muwema. He
ruthlessly attacked the judge.
The judge was wrong in ordering the 1st respondent to pay costs
personally without the other respondents. To order an advocate to pay
costs personally, he must be given an opportunity to show cause why
he should not pay. The judge should have allowed costs for 2 counsel
The trial judge herself revealed at one time that the hearing of the
appeal was one where her skills as a judge were tested to their utmost
limits. She added further that never before had she encountered as
much cunning and deceit in judicial proceedings as she did with the
group of advocates that were being called to account in this appeal. Her
statement was a fair comment taking into account what happened
I have found that Counsel Muwema behaved in an unbecoming manner
throughout the entire proceedings in Misc Application No.645/2010.The judge has the power to control the proceedings in her
court even where the conduct of advocates like Mr.Muwema is unbecoming. This power extends to disciplining advocates for misconduct as counsel Muwema exhibited.
The judge was not biased as there was no evidence to prove bias on her
part as a judicial ofcer. The observations and comments she made in
her judgment in Misc Application No.645 of 2010 that were interpreted
by the Learned Justices of Appeal were as a result of being pushed
against the wall by counsel Muwema’s misconduct which tested her
patience as a judicial ofcer. 53
In their judgment, the Court of Appeal stated that the trial judge
should refrain from being annoyed by the advocate. While I entirely
agree with that, the trial judge should be frm like Mulyagonja J was in
this case, control court proceedings and deter any daring advocate from
abusing judicial proceedings or procedures.
‘‘The learned Justices of Appeal erred in law when they declared
the judgment in Misc Application No.645 of 2010 a nullity, set it
aside and allowed the appeal.’’
Counsel for both parties did not make specifc arguments on ground 9.
Apparently their arguments on grounds 4 and 10 covered this ground
and I would take it as such. Ground nine was therefore abandoned.
“The learned Justice of Appeal erred when they ordered the
record would be sent back to Commercial Court for disposal
before another judge”
Mr. Kibaya for the appellants contended that they had made all the
necessary submissions that the remuneration agreement was illegal.
He submitted that all the materials that were necessary to make the
decision were available before the Court of Appeal. However, the Court
of Appeal did not make the decision on that issue which according to
counsel was an error of law. He submitted that once an issue has been raised and submissions have
been made on the same by both parties the court has a duty to deal
with it and make specifc fnding. Ignoring it by court is an eror both in
law and fact. In support of his submission he relied on the decision of
this Court in Bakaluba Peter Mukasa Vs Namboze Betty Bakireke
(Supreme Court Election Appeal No. 04/2009). Mr. Ali for the respondent was in agreement with the decision of the
Court of Appeal returning the case to the Commercial Division by
another judge. He argued that Rule 52 of the Court of Appeal Rules
gives court powers on appeal to confrm, reverse, vary the decision of
the High Court or remit the proceeding to the High Court with such a
direction as may be appropriate or order a retrial.
He submitted that the Justices of Appeal exercised their discretion
properly for retrial as the trial was a nullity on the following reasons.
Firstly, willful disregard of lawful orders of court, secondly bias and
thirdly a suspension of an advocate without fair hearing.
I appreciate the submission by Mr. Kibaya that since the appellants
had presented the issue of illegality to the Court of Appeal their
Lordships should have considered and made an appropriate fnding. All
relevant facts were on the record of .
On appeal the Supreme Court has powers to make orders which the
Court of frst instance should have made.
Section 7 of the Judicature Act gives the Supreme Court powers of the
court of original jurisdiction. It provides;
“For the purposes of hearing and determining an appeal, the
Supreme Court shall have all the powers, authority and
jurisdiction vested under any written law in the court from
the exercise of the original jurisdiction of which the appeal
originally emanated.”(emphasis mine)
This section gives the Supreme Court on appeal, the power to exercise
and make orders which the court of original jurisdiction could have
made especially where the court is of the opinion that the matter was
not properly handled in the lower courts thus defeating the ends of
justice. The Court of Appeal has similar powers, but chose not to
Rule 2(2) of the Judicature (Supreme Court Rules) Directions S.I 13-11
gives the Supreme Court inherent powers. It provides: 56
“Nothing in these Rules shall be taken to limit or otherwise
afect the inherent power of the court, and the Court of
Appeal, to make such orders as may be necessary for
achieving the ends of justice or to prevent abuse of the
process of any such court, and that power shall extend to
setting aside judgments which have been proved null and
void after they have been passed, and shall be exercised to
prevent an abuse of the process of any court caused by
The instant appeal is one that has been characterized by abuse of court
process in the lower courts where the matter has been mishandled by
some judicial ofcers and advocates. For instance separate applications
like M/A 622/2010 and M/A 625/2010 with the same subject matter
were fled and heard separately yet they should have been consolidated.
It is such abuse of court process by judicial ofcers and advocates that
has delayed justice. The Supreme Court can thus exercise its
jurisdiction under section 7 of the Judicature Act and inherent powers
under rule 2(2) and make appropriate orders which should have been
made by the High Court. In the instant appeal there was no need to
send the fle back to the High Court
I now turn to the ground of afrmation of the decision which reads.
“That Misc Application No.645 of 2010 which gave rise to
Civil Appeal No.18 of 2011 was statute barred”.
On the issue of notice of afrmation of the decision of the Court of
Appeal, counsel for the respondent, Mr. Byenkya argued that it is based
on section 5 and 6 of the Civil Procedure Act. Mr. Byenkya referred to
page 566 of the record of appeal which is Misc.Appln.No.625 of
2010.This application was heard by Registrar of the High Court, Her
Worship Nakibule Kiseka. Prayer No.2 sought for a declaration that any private remuneration
agreement related to Advocates fees signed between the 1
and its counsel is not binding and /or enforceable on all the Applicants
or any other person not party to it. Counsel further argued that there is
Misc Appln .No.645 of 2010 out of which the appeal arose. The remedy sought in Misc Appln No.645 of 2010 was the same as that
in Misc Application No.625 of 2010.The remedy was a declaration that
a private agreement relating to fees signed between the 1
(Shell) and the 5
respondent Muwema & Mugerwa should be declared
null and void. Counsel argued that the elements necessary to bring
section 5 and 6 into application were present. 58
The subject matter was the same which was the legality of the
respondent and counsel. The
parties were the same; the only addition was Muwema & Mugerwa as
respondent who signed the agreement in contention. Counsel
also argued further that the suit was still pending as a ruling was
never delivered in Misc.Appln.No.625of 2010 because the fle was taken
away by the judge. The matter in the appeal in Misc Appln No.645 of
2010 was therefore the same as the one in Misc Appln.No.625 of 2010
which was still pending as a ruling was never delivered. Counsel
submitted that court cannot proceed with a matter which is statute
barred. Therefore court should uphold the ground of afrmation that
the proceedings before Justice Mulyagonja when she decided to proceed
and make a decision in any case, she was barred from proceeding by
law. Counsel for the appellants did not make any submission in reply to
the notice of afrmation.
Section 5 of the Civil Procedure Act provides for courts to try all civil
suits unless barred. It states;
“Any court shall, subject to the provisions herein contained,
have jurisdiction to try all suits of a civil nature excepting
suits of which its cognisance is either expressly or impliedly
Section 6 of the same Act provides for stay of a suit where the matter in
issue is also directly and substantially in issue in a previously
instituted suit or proceeding between the same parties, or between
parties under whom they or any of them claim, litigating under the
same title, where that suit or proceeding is pending in the same or any
other court having jurisdiction in Uganda to grant the relief claimed.
Considering Miscellaneous Applications 622 and 625 of 2010, both
applications had a prayer for a remedy of declaration that a private
agreement relating to fees signed between the 1
respondent (Shell) and
respondent Muwema & Mugerwa should be declared null and
void. The Registrar went ahead to hear both applications separately and
deliver a ruling in Misc Application No. 622 of 2010 reserving the
ruling in Misc Application No.625of 2010 yet the subject matter in the
two applications was the same and parties were the same. Counsel for
the appellant and URA had prayed for joinder of suits though they did
not follow it up to the conclusion.
Justice Mulyagonja rightly considered the issue of consolidation of
suits in Misc Application No.645 of 2010(NO.2). She stated that the
Registrar did not consider the application for consolidation in spite of
her obligations under the provisions of Order 11 rule 1 CPR. This provision empowers the court either of its own motion or on the
application of a party to consolidate suits pending before the same
court in which the same or similar questions of law of fact are involved.
She stated further that a careful judicial ofcer would have taken time
to ponder whether the two applications had similarities that required
them to be consolidated before going forward with either of them. She
pointed out that it is the duty of the judicial ofcer to identify crucial
issues for trial in each case, and to see to it that they are tried
expeditiously and inexpensively as possible. This duty includes making important decisions such as whether to
consolidate suits and applications or not. She stated that it is the
failure of the Registrar to exercise her discretion to consolidate these
two applications that resulted in an escalation of the dispute over the
fee agreement. Justice Mulyagonja found that the Deputy Registrar erred when she
failed to come to a decision on the issues of illegality raised in Misc
Appln No.625/2010 before she issued charging orders in favour of the
respondents in Misc Appln.No.622/2010.
Justice Mulyagonja was, therefore, right to hear application No.645/2010 which arose from Miscellaneous Applications 622 and 625 of 2010 whose subject matter was founded on the issue of legality of the remuneration agreement. As the 1
appellate court, Justice Mulyagonja had the duty to consider the issues of illegality raised before the Registrar. Therefore Misc .Application No.645 f 2010 was not barred in law. The ground for afrmation should, therefore, fail.
Counsel for the 2
respondent, argued that the 10 appellants claim the
respondent frm did not have instructions to represent them. Mr. Sekatawa for the 2
respondent wanted court to address the
question whether if someone procures a representative order and the
remuneration agreement is executed without instructions and that
agreement is found to be illegal, the appellants can obtain benefts from
an illegitimate contract which was entered into without instructions.
Respondent further argued for orders that should
the Supreme Court fnd that the remuneration agreement is null and
void, the appellants cannot take beneft of proceeds of OS No.09 of
2009, arising from the impugned remuneration agreement and
resultant orders thereof.
He relied on the case of Active Automobile Spares Ltd v Crane Bank
Ltd & Rajesh Pakesh (supra) to buttress his argument that if the
appellants cannot sustain their cause of action separate from the illegal
remuneration agreement and the fraud that surrounds it, then the
appellants cannot derive beneft from the illegal agreement.
In reply counsel for the appellants argued that the representative order
that gave the appellants permission to sue has no relationship to the
remuneration agreement. He argued further that there is no
relationship between the agreement signed and the validity of that
claim. Counsel argued that the cause of action under the original suit
O.S No. 9 of 2009 happened a long time before and it was about URA
taking money without legal backing. Counsel argued that suggesting
that parties cannot take back that money because of an illegal
agreement which was done several years ago is completely wrong.
He argued further that URA did not appeal against the OS 009/2009
and they should not be allowed to appeal under the disguise of a cross
I agree with counsel for the appellants. The representative order that
was obtained to represent the appellants was specifcally to represent
them in court to have their money refunded by URA. It did not
authorize Rock Petroleum (U) Ltd at any one time to enter into a
remuneration agreement that was to charge 16% of their money
without their consent. Rock Petroleum (U) Ltd and the 1
should have consulted the appellants before entering into such an
agreement. I do not, therefore, accept counsel for the 1
submission that the representative order gave Rock Petroleum (U) Ltd
power to enter into a remuneration agreement.
Both parties cited the case of Active Automobile Spares Ltd v Crane
Bank Ltd & Rajesh Pakesh (supra) that authority is distinguishable
from the instant appeal. The appellants are claiming their money
independent of the illegal remuneration agreement. In Active
automobile Spares Ltd (supra), the appellant deposited a Uganda
Shillings draft (cheque) with the 1
Respondent, the manager of the 1
respondent bank, to transfer to the UK British Pounds 60, 382 for
purchase of agricultural machinery spare parts, for and on behalf of
the appellant. The 1
Respondent bank did not have that amount of British pounds,
and the appellant was advised to take United States dollars instead,
which was taken to the premises of the appellant. However, the
Managing director of the appellant later refused the dollars, insisting
on British pounds. The second respondent was asked to collect the US
dollars, which he collected and issued a receipt on the letter head of the
respondent bank. No British pounds were ever sent to London on
behalf of the appellant nor were the dollars refunded to the appellant.
The appellant instituted a suit against both the bank as the 1
defendant and its manager as the 2
defendant. 64
The suit against the bank was dismissed by the trial court. The
appellant appealed to the Court of Appeal, which upheld the judgment
of the High Court. The appellant was dissatisfed with the judgment
and appealed to this court. This court held that the maxim of the law
that “ex turpi causa non oritur action” is to the efect that no court
ought to enforce an illegal contract if the illegality has been brought to
its notice, where the person seeking the aid of the court is party to the
illegality. In that case, the appellant could not make out its case for
refund of the dollars without depending on the transaction that it
purchased dollars from the 1
respondent bank purporting to be
importing agricultural machinery spare parts. The transaction was
illegal as it was contrary to section 1 Exchange Control Act. Alternatively, even if the remuneration agreement is binding on the
appellants and did not have other illegalities pointed out, it contains
two parts which are severable. One part instructing the 1
st respondent
to research and investigate the viability of maintaining legal action
respondent. The other part contains the remuneration
respondent and it is the one which is illegal. In Marles -vs- Philip Trant & Sons Ltd Mackinnon, Third party
(1954) I QB at 29 the cause of action was severed from that part of the
contract where the other party had not performed a statutory
requirement of providing the prescribed particulars, and it was held
that the other party could still recover their particular loss arising out
of the contract. The appellants being innocent parties here should not be left to sufer
the loss caused by Rock Petroleum (U) Ltd and the 1
respondent. This
is because the representative order obtained was to represent the 10 oil
companies in court and not to enter into a remuneration agreement
which turned out to be unenforceable. The said agreement was never
even brought to the Appellant’s notice even when the 1
knew it would bind them in future.
The appellants should not be made to pay costs incurred by the 3
respondent as stipulated in the fee agreement which they were never
party to. Mulyagonja, J. referred to the case of Moon v Atherton
[1972]2 Q.B 435 per Lord Denning in Market v Knight Steamship
Co. Ltd [1910]2 QB 435 1021, where it was held that the other
represented parties are not liable for costs, but will be bound by the
estoppels created by the decision .They are “free riders” on the suit and
are under no obligation under the law to pay fees or costs unless
ordered to do so by court.
The 10 oil companies being benefciaries in the representative action
were “free riders” on the suit which was brought by Rock Petroleum on
their behalf. They were under no obligation to meet the costs of the suit
incurred by the 3
rd respondent unless court so ordered.
Before I take leave of this judgment I would like to comment that this
case was mishandled by some judicial ofcers and some advocates for
reasons best known to themselves. This case was on the verge of abuse
of court process by some of them thus the record of appeal is in some
aspects incomplete. In conclusion, this appeal substantially succeeds and I would make the
a)I would dismiss the cross appeal with no orders as to costs
b)I would dismiss the grounds for afrming the decision.
c) I would allow this appeal with costs for two counsel to the appellants against the1st respondent, in this court and in the courts below. Dated at Kampala this…………...day of…………………………2014
Judgment: Shell vs Muwema & Mugerwa by The New Vision4.0K viewsEmbedDescriptionThe Supreme Court has blocked payment of sh8.9b to a city law firm which wanted to share from the sh56b excise tax refund URA is to give to 10 fuel companies. Muwema and Mugerwa Advocates and Soli...The Supreme Court has blocked payment of sh8.9b to a city law firm which wanted to share from the sh56b excise tax refund URA is to give to 10 fuel companies.Muwema and Mugerwa Advocates and Solicitors had claimed 16% of the sh56bn as remuneration for representing the oil companies, in addition to costs.Fred Muwema and Kiggundu Mugerwa are the senior partners in the firm.The Supreme Court ruled the claim illegal and ordered Muwema’s firm to pay costs to the lawyers of the aggrieved oil companies in all the courts the remuneration dispute has been.Interests: Types, Business/Law, Court FilingsRead on Scribd mobile: iPhone, iPad and Android.Copyright: © All Rights ReservedFlag for inappropriate contentShow moreShow less
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