[2025] UGCA 200

# THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

#### **CIVIL APPLICATION NO. 0549 OF 2024**

(Arising from Civil Appeal No. 150 of 2016)

MAVID PHARMACEUTICALS LTD....................................

#### **VERSUS**

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ROYAL GROUP OF PAKISTAN....................................

# RULING OF CHRISTOPHER GASHIRABAKE, JA (SINGLE JUSTICE)

### **Introduction**

- [1] This application was brought under Rule 105(3) of the Judicature (Court of Appeal) (Rules) Directions SI 13-10, and section 282 of the Companies Act for Orders that: - a. The Respondents do provide further security for the Costs and decretal sums of the Applicant in this appeal. - b. The costs of this application be provided for

[2] The application is premised on the following grounds:

- a. The Respondent will be unable to pay for the costs and the decretal sums of the Applicant in case they are not successful in the appeal. - b. The Respondent is a foreign company with no known address within this court's jurisdiction because it is domiciled at R2W2+GQQ+ONB-E/2 Meharsons Estates, Talpur Road, Lalzar, Karachi City, Sindh 74000, Pakistan. - c. That Judgment in High Court Civil Suit No. 319 of 2009, MAVID Pharmaceuticals Ltd vs Royal Group of Pakistan, was delivered in favour of the Applicant.

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that lhe compony v,ill he unable to pay the cosls of the de.fendant if successful in his or her defence, requirc s4fficienl securily to he givenfor those costs and any stay all proceedings until lhe securily is given. "

- [6] Counsel argued that it is only fair and just that, since the Applicant has not even executed its decree in Civil Suit No.03 l9 of 2010 and it has to incur costs in defending the Civil Appeal No. I 50 of 201 6, the Respondent should fumish further security for costs. - [7] Counsel contended that the Respondent is a loreign company with no known address within this court's jurisdiction. Counsel argued that there was no reciprocal enforcement of judgment with Uganda, thereby making it impossible to execute against it in case the Applicant succeeds on appeal. - [8] Counsel highlighted the fact that the Respondent deposited some money as security for due performance of the decree however its now four years since and yet the interest rate in civil suit No. 3 19 of 2009 indicatcs a 20o/o interest rate per annum as security because of the accumulation ovcr the years that have gone by sincejudgment came out on the 24th ofJuly, 2015. - [9] Counsel cited Rules 105(3) of the Rules of this Court, which stipulates that; "'l'he court moy ot ony lime, if il think./it, direct lhat .furlher security for cosls he given and may direct lhat securily.[or the payment of past cosls rclating to lhe maller in queslion in the appeal. " - [0] It was further contended for the Applicant that the deposit made for security for due performance of the decree was no longer substantial because the 20%o interest per annum had made the outstanding decretal sum grow. Counsel submitted that the total amount due for the judgment creditor is USD 214,228.4 (Two Hundred Fourteen Thousand Two Hundred Twenty-Eight and four cents) and Ugx 3,850,938/: ('Ihree million eight hundred fifty thousand nine hundred thirty-eight only). It was further submitted that the

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[5] Counsel prayed that this court Orders the I{espondent to dcposit security for the costs of Ugx. 753,803,6541= (Uganda Shillings Seven hundred fifty-three million eighty hundred three thousand six hundred fiftyfour shillings only) based on the value of the subject matter of the suit in regard to the scale under -lhe sixth schedule of The Advocates (Remuneration and Taxation of Costs Rules) Sl 267-4 and The Advocates (Remuneration and Taxation of Cots) (Amendment) Regulations 2018 as the Applicant had to hire a lawyers in Uganda to defend this suit.

## Submissions by Counsel for thc llcsnondent

- [6] Counsel for the Respondent submitted that thc principles that guide consideration of the applications for orders lor furlhcr security for costs are well settled. That firstly, thc appcllant will bc unablc to pay the costs of thc Respondent ifordered so, and secondly, that there arc circumstances to show that the appcllant will evade the payment ofcosts due to lack ofan address or intentional change of address. Counsel cited Noble Builders (U) Limited and Anor vs Jabal Singh Sandhu (supra), Mawogola Farmers & Growers Ltd vs Kayanja and othcrs (Nol) [97] | I EA 108 and Kakoza Jonathan and anor vs. Kasaala Cooperative Society Ltd, SCCA No. l3 of 2011. - [7] Counsel contended that all the authorities cited by the Applicant, including section 282 of the Companies Act Cap 106, are to the effect that the Applicant must, in such an application, prove that the Respondent will not be able to pay the costs olthc defendant. - [ 8] Counsel submitted that thc accumulated intercst on the decretal sum is a situation beyond the Respondent. Counsel argued that the Respondcnt has undertaken all the necessary processes to prosecute the appeal.

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security for taxed costs in prelercnce to allowing the Respondent to fumish security for costs sincc it had ben judiciously made.

- l25l Counsel argues that the Applicant acknowledged that the Respondent was ordered by the High Court and proceeded to fumish USD 62,819 as security for due performance of the decree. The sum is almost twice the valuc of the subject matter of the contract subject of the dispute, that is, USD 32,093. Counsel contended that all the other sums indicated by the Applicant constitute damages, costs and expenses as well as interest which are all indicated by the Applicant constitute damages, costs and expenses as well as interest which are all contested by the Respondent. Moreover, the Applicant has not taxed any bill of costs as to inform thc sum of Ugx 753,803,6541= which it wishes the Court to order as further security lor costs. In the circumstances, Counsel prayed the court to find that the security for due performance of the decree already furnished by the Respondcnt, as well as its economic standing, which has been shown to be credible, are sufficient to addrcss the Applicant's prayers. - 126) It was contended that Noble Builders (U) Limitcd and anothcr vs Jabal Singh Sandhu (supra) was distinguishable because the Respondent in that case was the plaintiff and had stated that he would rather put his money to morc profitable use than sccurc an unsuccessful defendant in the trial.

[27) Counsel prayed that this application should be dismissed.

## Rejoinder

[28] Counsel for the Applicant reiterated thcir earlier submissions. FIe further argued that since the full decretal sums and accumulatcd interest have not been fully paid, this court should order furthcr security lor costs.

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matter may, if it appears by credible testimony there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his or her defence, require sufficient security to be given for those costs and may stay all *proceedings until the security is given.*

- What I deduce from the above provisions is that whenever the court $[34]$ deems it fit, it can exercise its discretion to grant further security for costs. This means that the court has to evaluate the evidence on record to establish that there is reasonable cause to believe that the Respondent will not be able to pay the costs if the Applicant succeeds. The burden is upon the Applicant to demonstrate sufficient cause why the Appellant/Respondent should furnish further security for costs. - In Noble Builders (U) Ltd and Another vs Jabal Singh Sandhu, $[35]$ UGSC 12 [2004], Mulenga, JSC cited De Bry vs Fitzgerald and Another $(1990)1$ ALLER 560, to the effect that;

"*A defendant should be entitled to security if there is reason to* believe that, in the event of his succeeding and being awarded costs of the action, he will have real difficulty in enforcing that order. If the difficulty would arise from the impecuniosity of the plaintiff, the Court will, of course, have to take an account the likelihood of his succeeding in his claim, for it would be a total denial of justice that poverty should bar him from putting *forward what is prima facie a good claim. If, on the other hand,* the problem is not that the plaintiff is impecunious but that, by reason of the way in which he orders his affairs, including where he chooses to live and where he chooses to keep his assets, an order for costs against him is likely to be unenforceable only by a significant expenditure of time and money, the defendant should be entitled to security."

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within this honourable Court's jurisdiction becausc it is domiciled at R2W2+GQQ, ONB-E/z Meharsons Estates, Talpur Road, Lalzar, Karachi City, Sindh 74000, Pakistan, in their affidavit in reply, the Respondent averred that it was a major dealer in pharmaceutical products in Uganda and has a local Technical Representative, Abacus Pharmaceuticals, which is well recognized by the National Drug Authority, the sector regulator. In rejoinder under paragraph 7, the Applicant aftached a letter dated l2th March 2020, from Abacus Pharma (A) Ltd, addressed to the Applicant's advocates, denying any dealings with the Respondent company, the letter stated;

> "l'lease note that we are neilher the holder of trademarlc's and licenses oJ Royal Group of I'akistan nor are we in possession of' any slock belonging to Royal Group of Pakislan.

> Should you conlinue to unlawfully inler/bre u,ilh the business of lhc company or lhreolen any oJ'their employees, ofJicers in any u,ay whatsoever, we shall take legal aclion ogainsl you./br uny damages and losses lhereof, direct or indirect, al your ov,n cost and peril. '

- [41] Gathering from the above, it is clear that thc Respondcnt ncither has any address in Uganda, nor do they have any known assets in Uganda.'Ihc only company that they sought to associate with, denied any dealings with the Respondent. 'this is very important because it lends wcight to the Applicant's fear that if they succeed in the pending appeal, they might not readity recover thc costs awarded to them, considering that thcy havc not even been taxed at the trial Court. - l42l In further response, the Respondent stated that Pakistan is ^a Commonwealth country, having good relations with Uganda in all spheres of national cooperation, an embassy, and with a substantial business community recognized by the govemment of Uganda. It was argued by Counscl lor the

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- [45] It is my conclusion afler considering the above position of the law, and the lact that the Respondent is a foreign company with no known address within and is domiciled at R2W2+GQQ, ONB-E/2 Meharsons Estates Talpur Road, Lalzar, Karachi City, Sindh 74000, Pakistan and additionally, the fact that the local Technical Representative Pharmaceuticals denied having any dealings with the Respondent, that this is a fit case where the Applicant should be accorded further security. - [46) I therefore allow the application. I direct that the Respondent give further security for costs of the appeal by depositing in court, within thirty days from the date of this ruling, the sum of Shs. 50,000,000/:. I also order that the Applicants shall have the costs ofthis application.

## Decision

- (a) The application is granted. - (b) l'he Applicant is granted the costs of this application.

## I so order.

Dated,, signed and delivercd at Kampala this 2025. o-\*- Day... of

C. GASHIRAI}AKI]

. ITJSTICE OF APPE,AL