[2024] UGHCCD 151

### **THE REPUBLIC OF UGANDA**

## **IN THE HIGH COURT OF UGANDA AT KAMPALA**

#### **CIVIL DIVISION**

#### **MISCELLANEOUS APPLICATION NO. 494 OF 2022**

# **(Arising from civil suit no. 116 of 2022)**

# **JAPAN INTERNATIONAL COOPERATION AGENCY:::::::::::::::::::::::::::::::APPLICANT**

## **VERSUS**

### **DEVELOPMENT MEASURES INTERNATIONAL LIMITED::::::::::::::::RESPONDENT**

#### **RULING**

The Applicant brought this under Section 33 of the Judicature Act, Section 1 & 2 of Diplomatic Privileges Act, Section 98 of the Civil Procedure Act, The Diplomatic Privileges (Extension to prescribed organizations) Regulations 2003, Order 6 rules 28, 29 & 30, Order 7 rules 11(a), (d) and (e) and Order 52 rules 1& 3 of the Civil Procedure Rules seeking the following orders;

- *i. The Respondent/ Plaintiff's plaint in High Court Civil No. 116 of 2022 be struck out* - *ii. High Court Civil Suit No. 116 of 2022 be dismissed* - *iii. The Respondent/Plaintiff pays the costs of this application and the main suit in HCCS 116/2022 and* - *iv. Any other orders as this Honorable Court may deem appropriate and just.*

The application was supported by the affidavit of *Mr. Takayuki Uchiyama-The Chief Representative of the Japan International Cooperation Agency* where he stated that;

1. The Applicant enjoyed diplomatic immunity from civil and administrative jurisdiction of courts of law in the Republic of Uganda. He stated that the Respondent had not pleaded any exceptions to the Applicant's immunity and none existed.

- 2. That the applicant is an organ of the Government of Japan through which it delivers the bulk of its Official Development Assistance (ODA) to developing countries, including Uganda. Its mandate involves administering all ODA such as technical cooperation, loans and grant aid in over 150 countries and regions across the globe. - 3. That the State of Uganda accords JICA diplomatic status, immunities and privileges. - 4. That pursuant to Article V of the Agreement, the Government of the Republic of Uganda agreed to accord to the applicant's members of the mission such privileges, exemptions and benefits as are no less favourable than those accorded to experts, senior volunteers, members of missions and their families of any third country or any international organization performing a similar mission in Uganda. - 5. That pursuant to Article VI of the agreement, the Government of Uganda agreed to bear claims that may arise against the applicant in the course of, or otherwise connected with, the performance of the applicant's duties as a mechanism to resolve such claims. - 6. That the respondent has no enforceable right at all against the applicant because participation in the call for proposals in no way entitles any applicant to receive funding from the applicant. - 7. That the advert in the newspapers was a call for proposals from entities that had projects in the selected sectors of the economy and the advert in no way guaranteed any funding to the applicants. It only called for investment proposal concepts and the applicant ought not to be compelled to give funds to any applicant.

The Respondent opposed the application in an affidavit sworn by Mr. Opolot Martin a Director of the Respondent. He stated therein that the immunities and privileges accorded to the Applicant were not absolute but depended upon the agreement between the two countries which was applicable in this case.

That the plaint is not incompetent or even incapable of proper adjudication since the applicant engaged in commercial transactions with a third party like the respondent outside its official functions which act is an exception to the immunity.

The parties filed written submissions that were considered by this court.

The applicant was represented by *Kenneth Mugira and Kushaba Marvin* holding brief for *Jones Musiime* while the respondent was represented by *Ben Ikilai*

## *Whether the Applicant enjoys diplomatic immunity in Uganda?*

The Applicant argued that HCCS 116/2022 was barred by law because the Applicant was clothed with diplomatic immunity in Uganda and that the Respondent/Plaintiff had not pleaded any exceptions to the Applicant's/ Defendant's diplomatic immunity.

The Applicant cited the Diplomatic Privileges Act Cap 201 stating that it operated to prevent this Honorable Court from taking cognizance of, trying and deciding the main suit. Counsel further cited Section 5 of the CPA Cap 71 and Order 7 Rule 11 of the CPR concerning the suit being barred by law.

Counsel submitted that the Diplomatic Privileges Act gave effect to the Vienna Convention on Diplomatic relations. He cited Article 31 of the Convention which provided that a diplomatic agent would enjoy immunity from civil and administrative jurisdiction of the receiving state. He stated that the Ministry of Foreign Affairs had confirmed that the Applicant enjoyed diplomatic status by its letter dated 25th June 2022.

The Applicant additionally argued that the Government of Uganda and that of Japan had signed an agreement of technical cooperation on 8th December 2005 which specifically extended immunities in the Convention to the Applicant and its staff.

Counsel submitted that based on the provisions of the Vienna Convention and those of the Agreement, the Applicant had legally valid immunity and exemption from the jurisdiction of the Court. Counsel accordingly prayed that the Court reject the Plaint and dismiss HCCS 116/2022 with costs.

In response, counsel for the Respondent submitted that the Applicant did not enjoy diplomatic immunity against the legal process in Uganda. Counsel submitted that the immunity of the Applicant was restricted to transactions between the Applicant and the Government of Uganda and did not extend to transactions of a commercial nature between the Applicant and third party. Counsel submitted that to confer absolute immunity upon the Applicant would be contrary to public policy.

Counsel while relying on Article 31(1) of the Diplomatic Privileges Act Cap 201 submitted that the Applicant had no diplomatic immunity when engaging in commercial transactions with third parties outside his official functions.

Counsel submitted that there was no agreement between the Government of Uganda and Japan and the Applicant had not furnished any evidence to that effect save an agreement that was entered on the 8th December 2005 as evidenced in Annexture C furnished by the Applicant. Counsel submitted that without any evidence furnished by the Applicant, the Applicant was not immune from legal process in Uganda.

Further that under Article 32 of the Vienna Convention, the immunity conferred upon international organizations was not absolute. That the activities of the Applicant were of commercial nature which was an exception to diplomatic immunity.

# *Analysis*

Diplomatic immunity is a rule of international law that shields diplomatic agents of the sending State from the jurisdiction of the foreign state where they perform their functions. The diplomatic relations among the different states have today become a key element in international relations. The diplomatic agents who act in favor of the state's interests play a crucial role in building a peaceful Internationalised environment of the world.

The extraterritorial theory in international law exempts certain diplomatic persons and Agencies operating in a foreign country from the jurisdiction of the host country. Also it states that these diplomatic persons/Agencies do remain accountable to the laws of their native countries. The concept of extraterritoriality theory was propounded by French legal theorist and jurist Pierre Ayraut. According to him *"certain persons and things, while within the territory of a foreign sovereign; remained outside the reach of the local judicial process".* However, if a body is enjoying immunity and it operates outside its mandate and objectives, then it must a *fortiori* be subject to the laws of the land. See *Tononoka Steels v Eastern and Southern Africa Trade and Development Bank [2000] 2 EA 536*

The functional theory is a more practical and expected one in the diplomatic law. It is based on the thesis that diplomatic agents could successfully or perfectly perform their function in other countries, only if they are protected or shielded with the immunity and privileges in the receiving Nation.

Diplomatic agents enjoy immunity from the jurisdiction of the local courts. The immunity extends to criminal jurisdiction as well as to civil and administrative jurisdiction. Diplomatic agents are immune from being presented as witnesses in a civil, criminal, or administrative code of the state to which they are accredited. [Article 31\(2\)](https://legal.un.org/) of the Vienna Convention provides that a diplomatic agent is not obliged to give any evidence as a witness in any case.

The Agreement between the Government of Uganda and the Government of Japan shows that the two countries entered into agreement with the intention of promoting the economic and social development of their respective countries. The Applicant as the agency for the Government of Japan was granted diplomatic status in Uganda to allow it duly execute its duties in Uganda.

The duties of the Applicant extended to supporting the private sector through the Private Sector Investment and Finance (PSIF) scheme which includes providing debt, equity, project financing and Public-Private Partnerships. It was under this scheme that the Applicant called for investment proposal concepts that the Respondent submitted. The advert for proposals by the applicant fell squarely within the operations of the applicant in Uganda in respect of which diplomatic immunity and privileges "as one necessary for the fulfillment of the applicant's purposes" may be invoked. To lift the veil of diplomatic immunity in this case would set a dangerous precedent for the funding of different projects in Uganda. See *Thai Europe Tapioca Ltd v Government of Pakistan Ministry of Food and Agriculture Supplies Imports and Shipping Wing [1975] 3 All ER 961; Killeen v International Centre for Insect Physiology and Ecology [2005] 1 KLR 718*

The Applicant called for these proposal concepts as part of its mission to provide financial and technical assistance with the aim of achieving human security and quality growth. Contrary to the Respondent's submission that this was a commercial transaction between the Applicant and the Respondent, this was part of the Applicant's official functions which is clothed with diplomatic immunity.

*Article 31 of the Vienna Convention* states that; a diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of:

- (a) a real action relating to private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission; - (b) an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee as a private person and not on behalf of the sending State; - (c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions.

The principle of diplomatic immunity is a very well-established principle of International law. Diplomacy is a foundational fact of international life without which international life will be at risk. The concept of Diplomatic Immunity is very important for the promotion of friendly and healthy relations among the states- be it for the purpose of trade, security, peace, or their cultural relations. Each case of diplomatic immunity must be decided on the basis of its own peculiar facts and circumstances. See *Beysne v Republic of Romania [200] EA 322; Trendex Trading Corporation Ltd [1977] 1 All ER 981*

The Applicant was therefore acting within its diplomatic immunity since the action relating to the commercial activity exercised by the applicant Agency was within its functions and mandate under their agreement.

Finding that the Applicant has diplomatic immunity resolves this whole matter but I will still delve into issue 2 as to *whether the suit is frivolous, vexatious and ought to be struck out.*

The Applicant contended that the prayer by the Applicant that a declaration that the Plaintiff was entitled to funding from the Defendant for the grain hub project totaling to US\$ 9,927,109.64 was not available to the Respondent/ Applicant as it would infringe on the Applicant's constitutional freedom of association and its freedom of contract.

In response however, Counsel for the Respondent while relying on Bankes L. J. at page 572 submitted that the declaratory order of the Respondent being entitled to funding was not in itself absolute but rather meant that the Respondent qualified to receive such funding. He stated that the order would still allow the Applicant to set the conditions precedent for the grant of such funding to the Respondent which if they did not meet would not benefit from the funding. Counsel argued that the Applicant was therefore not being forced to contract with the Respondent as the Applicant's Counsel had submitted. Counsel concluded that such order would therefore not infringe on the Applicant's freedom of contract.

Counsel for the Applicant also submitted that the application was based on Article 42 of the Constitution which only created rights enforceable only against public officials and bodies of the Republic of Uganda which the Applicant was not. Counsel submitted that the plaint did not allege anywhere that the Applicant was a Ugandan public body or official and it in fact was not hence the right was not enforceable.

The Respondent's Counsel disagreed arguing that the Applicant was an administrative body incorporated under the Act of the Incorporated Administrative Agency-Japan International Cooperation Agency (Act No. 136 of 2002) of Japan and operating in Uganda among other countries. He argued that the Constitution envisaged any administrative body or officials operating in Uganda and not Ugandan public officials or bodies as submitted by counsel for the Applicant. Counsel added that it would be absurd if entities such as the Applicant were in Uganda and not giving due consideration to the laws of Uganda.

Counsel concluded that the Applicant was an agency of the government of Japan performing a public function for public interest hence Article 42 applied to its administrative decisions.

Counsel submitted that the application did not disclose a cause of action since the Plaintiff had no right to begin with. Counsel submitted that the main suit was frivolous because participating in the Applicant/Defendant's survey or invitation for proposals could not and did not create any right entitling the Plaintiff/Respondent or any other person to funding. Being short-listed only qualified the Applicant for consideration for funding but the decision remained the exclusive prerogative of the funder. Counsel argued that it would be premature and speculative to suppose that the funder and any qualified Applicant would automatically agree on the investment terms at the stage of being short-listed. Counsel argued that in the absence of a signed contract or commitment between the Parties, there was simply no right for the Respondent/ Plaintiff to enforce that was actionable.

Counsel noted that the Respondent was among the selected 30 cases that were retained for possible selection in the future and had therefore not suffered anything except for what they termed as broken-hearted. Counsel argued that mere disappointment did not amount to an actionable wrong and that moreover no Applicant had been funded to date as the next steps were still ongoing.

The Applicant's request for proposals was a private matter and not of public procurement within the laws of Uganda. It was Counsel's view that mere submitting of a proposal did not legally oblige the recipient of the proposal to accept. Counsel prayed that the Court find that the Respondent had no enforceable right against the Applicant and therefore no maintainable cause of action hence the suit was vexatious, intended to harass, intimidate, and blackmail the Applicant into surrendering substantial amounts of money to the Respondent irrespective of whether it met the later needs of the Applicant's criteria or not.

The Respondent's Counsel however submitted that the Respondent had a maintainable cause of action having been shortlisted and considered only for the Applicant to another alleged screening without any notice or hearing to the Respondent. Counsel argued that even if the Respondent had no enforceable right, the Respondent pleaded the doctrine of legitimate expectation. He submitted that where such a legitimate expectation was defeated, it gave the person the locus standi to challenge the administrative decision as illegal and thus even in the absence of a substantive right, a legitimate expectation could enable an individual to seek a judicial remedy.

Counsel for the Applicant also argued that the application conjoined claims in public law with those in private law and yet the two cannot be tried together. The application sought declarations that were a remedy in judicial review. Additionally that the substance of the plaintiff's complaints sounded the right to a fair hearing, legitimate expectation and the rights under Article 42 all which were claims in public law which could only be litigated against public officials and bodies. Counsel argued that such claims could only be brought by Notice of Motion and not by Plaint like the Respondent had done.

Counsel concluded that public law and private claims could not be tried together hence the Court should reject the Plaint and dismiss the suit.

Counsel for the Respondent submitted that contrary to the Applicant's submission, the Respondent had pleaded legitimate expectation which was not a matter for judicial review but rather a plaint as adopted by the Respondent. Further that in any case, what was important was the substance and not form.

### *Analysis*

I concur with the Applicant's Counsel that this suit is very speculative and riddled with broken heart syndrome. The Respondent's whole claim is based off of the fact that it was not considered for possible funding. The Applicant reserved the right to give funding to projects/ businesses that met its criteria. It was not cast in stone that once the Respondent was shortlisted, it was automatically getting the funding.

The advert by the applicant was merely an invitation to treat. It was a communication in which the respondent was invited to make an offer and it was never made with intention to become binding as binding as soon as the person to whom it is addressed simply communicates his assent to its terms. There was basis to infer any contractual relations.

The respondent appears to hinge his case on Article 42 of the Constitution which provides for just and fair treatment to any person who appears before any administrative official body. The applicant is not an administrative body in Uganda and cannot be subject to the right to fair and just treatment. It a private body and it regulates its decisions in any manner and are not bound to treat the applicant justly or fairly.

The court finds the suit against the applicant discloses no reasonable cause of action and is clearly frivolous and vexatious and an abuse of court process. This case against the applicant was intended to embarrass and intimidate the applicant in funding specific projects in exercise of their discretion. The court cannot allow that to happen and it is for this reason that it must proceed to strike out the plaint and dismiss it.

This whole suit is a waste of the Court's resources and is therefore dismissed with costs.

I so order

*SSEKAANA MUSA JUDGE 12th September 2024*