Supreme Court caught in Incafex shareholding fight

A company has lodged a petition in the Constitutional Court seeking orders to stop a panel of Supreme Court judges from hearing a case that the petitioners say has already been decided by the same court.

The petition arises from a long-standing shareholding legal battle between businessmen and former Minister Matthew Rukikaire and lncafex Limited led by among others businessman James Garuga Musinguzi, the managing partner of the company.  The dispute has dragged on for close to 20 years.

The petition filed last Friday, seeks to stop five judges of the Supreme Court including Chief Justice Owiny-Dollo from hearing Civil Application No. 4 of 2021 in which Mr Rukikaire is suing lncafex Limited. Mr Rukikaire and the Attorney General are named as respondents.

The Constitutional Court has also been asked to block Justice Mike Chibita, Justice Elizabeth Musoke, Justice Christopher Madrama, and Justice Stephen Musota.

Court documents seen by the Monitor show that the matter was heard and determined on January 4, 2022, by a single judge, Justice Chibita.

The petitioners are also seeking a declaration from the Constitutional Court that the act of the Supreme Court of hearing the aforementioned application is “inconsistent with and is in contravention of Articles 28(l), 44(C), 126(1) and 132 of the constitution of the Republic of Uganda”.

To back their petition, Incafex Ltd and their lawyers, argue that they have never been served with any “letter, written request or pleadings requiring the Supreme Court to hear afresh, review, hear on appeal, reference or otherwise reconsider Civil Application No. 4 of 2021”.

They have asked the Constitutional Court to issue a permanent injunction restraining the Supreme Court from hearing the application and requested that Mr Rukikaire and the Attorney General be slapped with costs of the petition if it succeeds.

Genesis

On February 9, 2021, Mr Rukikaire filed an application against Incafex Limited in the Supreme Court which was fixed for hearing on April 15, 2021.  

On January 4, 2022, Justice Chibita dismissed the Application and asked each party to bear its own cost.

In an affidavit supporting the petition, Mr Musinguzi says he was “surprised” when on February 13 this year, he was served with a “Hearing Notice for Civil Application No. 4 of 2021 that had already been concluded by Hon Mr. Justice Mike Chibita”.

The petitioners allege that they did not receive any response from the Supreme Court registrar which prompted the petitioner through his lawyers to write to the Chief Justice requesting him to advise on the matter “but again received no response”.

On March 16, the petitioners were served with a hearing notice for an application that sought different reliefs from that of the concluded Civil Application No. 4 of 2021.

When they appeared in court for that hearing, the petitioners allege that Mr Rukikaire’s lawyer, also former minister Mwesigwa Rukutana, asked the court to hear the two applications including the one petitioners had objected to as concluded.

Chief Justice Dollo heading the panel after ascertaining from court records ruled that there was no evidence of court service of Application No. 4 of 2021. The CJ directed that the application be heard only after proper service.

Incafex Ltd through their lawyers, M/S KBW Advocates, was subsequently served on the same day with a hearing notice due on March 28 about the process they now challenge in the Constitutional Court.

Background

Mr Rukikaire filed a petition with the High Court in 2004 saying that Incafex Limited was conducting its business in a way that was oppressive to him as a shareholder. The High Court decided in Mr. Rukikaire’s favour. 

The matter went on to the Court of Appeal, which overturned the High Court’s decision, holding that Mr Rukikaire was not a member of the company. On a subsequent appeal to the Supreme Court, the Court of Appeal’s decision was reversed. 

In the decision which was reinstated by the Supreme Court, the High Court had ordered that the accounts of Incafex be audited to establish among others whether the foreign shareholder Multiple Hauliers Ltd, a Kenyan company, were compensated for their investment and if not to advise on a fair amount for compensation. After the Supreme Court judgment, the parties agreed to the terms of reference for the audit, and the first meeting was organised. 

Part of the terms agreed upon was that evidence from Multiple Hauliers Ltd would be presented by its directors or secretary or a person duly authorised by the directors. 

Incafex claims Mr Rukikaire has failed to produce acceptable evidence that he is authorised to act on behalf of the directors of Multiple Hauliers Ltd. Incafex filed a suit to set aside the High Court judgment, which was dismissed and is currently on appeal.   

In an interview, Mr Rukutana accused the petitioners of engaging in delaying tactics. 

“We have not been served but all those are delaying tactics. When the matter comes up, we shall demonstrate to the court that there is no issue for constitutional interpretation,” he said.