[2011] UGCommC 1

[2011] UGCommC 1

The court found that the first Defendant, as a forex bureau, was prohibited by law from taking deposits from the public, making the transaction illegal. However, the Plaintiff did deposit US$160,000 with the first Defendant, as evidenced by documentary and testimonial proof. Despite the illegality, the court held...

Source-derived case information.

Citation
[2011] UGCommC 1
Parties
Plaintiff: Damas Mulagwe; Defendant: Lanex Forex Bureau Ltd; Defendant: Stanhope Finance Co. Ltd; Defendant: Noorali Manji; Defendant: Mohan Drolia Manji; Defendant: Diamond Drolia
Court
Commercial Court of Uganda
Jurisdiction
Uganda
Case Number
HCT-00-CC-CS 358 of 2006
Procedural Posture
Civil Suit / Judgment
Outcome
partly allowed
Legal Topics
Illegality of Contract, Deposit Taking by Forex Bureaus, Corporate Veil, Money Had and Received
Source Language
en
Commercial and Corporate Banking and Finance Illegality of Contract Deposit Taking by Forex Bureaus Corporate Veil Money Had and Received

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Parties

Damas Mulagwe

Plaintiff

Lanex Forex Bureau Ltd

Defendant

Stanhope Finance Co. Ltd

Defendant

Noorali Manji

Defendant

Mohan Drolia Manji

Defendant

Diamond Drolia

Defendant

Procedural Posture

Civil Suit / Judgment

  1. 1 Whether the first Defendant could lawfully take deposits from the public.
  2. 2 Whether the Plaintiff did make a deposit with the first Defendant of US$160,000 as alleged.
  3. 3 If the deposit was made, whether the Defendants or any of them is liable to pay the Plaintiff the said sum with interest as claimed.

Ratio Decidendi

The court found that the first Defendant, as a forex bureau, was prohibited by law from taking deposits from the public, making the transaction illegal. However, the Plaintiff did deposit US$160,000 with the first Defendant, as evidenced by documentary and testimonial proof. Despite the illegality, the court held that the Plaintiff was entitled to recover the principal sum as money had and received, since the Plaintiff was not equally at fault (not in pari delicto) and the law places the duty to comply on the recipient. The claim for contractual interest was denied as it would contravene the regulatory prohibition. The court further held that there was no basis to lift the corporate veil...

Court Disposition

partly allowed

Orders

  • The first Defendant shall refund the Plaintiff US$160,000 as money had and received.
  • The claim for interest and general damages is denied.