THE REPUBLIC OF UGANDA,
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISC APPLICATION NO 359 OF 2015
ARISING FROM HCCS NO 169 OF 2013
ZTE CORPORATION}...........................................................................APPLICANT
VERSUS
UGANDA TELECOM LIMITED}..........................................................RESPONDENT
BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA
RULING
The Applicant commenced this application under the provisions of section 100 of the Civil
Procedure Act and Order 6 rule 19 of the Civil Procedure Rules for an order to amend the Plaint
in HCCS 169 of 2013 to join ZTE (HK) Ltd as a party to this suit and for costs of the application
to be provided for.
The grounds of the application are that the Applicant instituted Civil Suit Number 169 of 2013 in
the Commercial Court against the Respondent to recover a sum of US$6,108,272 arising out of
various contracts. Secondly the Respondent contests liability to the Applicant in respect of the
contract dated 29th of October 2007 executed by ZTE (HK) Ltd, a wholly owned subsidiary of
the Applicant, for the benefit of the Applicant. Thirdly the presence of ZTE (HK) Ltd as a party
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
1
is necessary for the effectual determination of the main suit. Fourthly the Respondent would not
be prejudiced by the addition of ZTE (HK) Ltd to the main suit. Lastly that it is in the interests of
justice that the application is allowed.
The application is supported by the affidavit of Cao Chao, a legal officer with the Applicant
Company. The deposition repeats the grounds and adds that the Respondent contested liability of
the Applicant in respect of the main contract in a preliminary objection. The contract dated 29th
of October 2007 was executed by ZTE (HK) Ltd, a wholly owned subsidiary of the Applicant,
for the benefit of the Applicant. The deponent relies on a copy of the Respondent’s submissions
contesting liability and annual returns of the company. He asserts that the Respondent made
several payments to the Applicant’s account in respect of the above contract and copies of the
evidence are attached. Furthermore he deposes that the presence of ZTE (HK) Ltd is necessary
for the effectual determination of the main suit. The rest of the deposition repeats the grounds in
the chamber summons which need not be repeated.
The application came for hearing on 1 June 2015 at 2:30 PM. At the hearing Counsel Terrence
Kavuma appeared but the Respondent did not appear either in person or through Counsel.
Counsel Terrence Kavuma relied on the affidavit of Kakaire Frederick filed on court record on
the 25th of May 2015 in which he deposes that he received the chamber summons with
documents annexed as on the 15th of May 2015 and immediately proceeded to the Respondent's
offices located at Telephone House Speke Road Kampala whereupon he tendered the court
documents to Counsel Kibuuka Rashid, the Respondent’s advocate in this matter. Counsel
Kibuuka Rashid received the court documents on the 15th of May 2015 and acknowledged it
went the stamp of Uganda Telecom, chief legal Counsel according to the returns filed by the
deponent. At the request of the court Counsel Terrence Kavuma was given in a few minutes to
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
2
get in touch with Counsel Rashid Kibuka on his mobile phone whereupon he came back and
informed the court that the said Counsel was in Mbarara and had informed him that he had
forgotten about the application. He prayed for the matter to proceed ex parte on the ground that
there was no response to the chamber summons and due to the absence of the Respondent’s
Counsel.
The prayer of the Applicants Counsel to proceed ex parte under Order 9 rule 20 (1) (a) of the
Civil Procedure Rules was granted. Subsequently a representative of the Respondent appeared
and waited patiently in court until after the Applicant’s Counsel completed his submissions and I
gave a ruling date for 5th of June 2015 at 9.30 am (today’s date). He then sought to be heard and
stated that there was no response to the application because they presumed that because the
Respondent had filed a formal application for leave to appeal the ruling of the court on the
preliminary objection, they assumed that the Applicant’s application would not be heard. This
was at variance with what the Applicant’s Counsel reported about Counsel Kibuuka Rashid
having forgotten. I decided that the application to adjourn was belated and without merit and
have proceeded with the ruling as scheduled.
From the submissions of the Applicant’s Counsel the Applicant’s case is as follows. The
Respondent by the time of submissions never filed an affidavit in reply opposing the application
or rebutting the facts in the affidavit in support. In such cases courts have held that the
application stands unchallenged and the facts deposed to in the Applicant’s application are
presumed admitted by the Respondent. The Applicants Counsel relied on the cases of Tororo
Steel Works vs. Betty Akikoth OS No. 1 of 2008 and a decision of Hon. Justice Lameck
Mukasa as well as the case of Erusani Kivumbi and 3 Others vs. Registrar of Titles HCMA
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
3
No. 102 of 2009 a decision of Hon. Justice Joseph Murangira. The Applicant’s Counsel invited
the court to find that the application is admitted and should be allowed as pleaded.
Notwithstanding the foregoing, Counsel submitted that in ground 3 of the application, it is stated
that the presence of ZTE is necessary for effectual determination of the suit. The reason is
basically because the present Applicant in the plaint on record seeks to recover monies arising
from a contract that was executed by ZTE Hong Kong and the present Respondent which
contract is annexed. In that contract the beneficiary of the monies arising is the present Applicant
and the implementing party in the contract is ZTE Hong Kong Ltd. ZTE (HK) not a party to
HCCS 169 which is the main suit. However for effectual determination of all issues, it is a
necessary party (under the contract). On a question put to Counsel by court as to what capacity
of party ZTE (HK) should be, Counsel submitted that it would be co – Plaintiff. This would
enable all parties affected by the contract to be properly before the court. The court will be in a
position to determine the issues arising under the contract conclusively and avoid multiplicity of
proceedings in respect of the particular matter. If the court is disinclined to grant application, he
contended that ZTE Hong Kong could file a separate plaint. For the holding that a necessary
party may be added Counsel relied on the case of Stanbic Bank vs. Canstar Rags HCMA 349
of 2012 and where the High Court relied on the Supreme Court Decision of DAPCB vs. Jaffer
Bros. A further rationale is that addition of parties is made to avoid multiplicity of suits.
The Applicant’s Counsel contended that any decision the court makes is likely to affect the rights
of ZTE Hong Kong Ltd and as such it would be prudent that the court hears from ZTE (HK) as a
party. Civil Suit 169 of 2014 is not premised only on the particular contract but also on purchase
orders and repayment agreements. In the circumstances he invited that court to grant the
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
4
application on the ground that the Applicant has met all the relevant criteria for the grant of
applications to add a party.
Ruling
The Applicant’s application is deceptively couched as an application for amendment of pleadings
under order 6 rule 19 of the Civil Procedure Rules whereas it is an application for the addition of
a party. Order 6 rule 19 of the Civil Procedure Rules provides that:
“19. Amendment of pleadings
The court may at any stage of the proceedings, allow either party to alter or amend his or
her pleading in such manner and on such terms as may be just and all such amendments
shall be made as may be necessary for the purpose of determining the real question in
controversy between the parties.
Order 6 rule 19 deals with amendment of pleadings and not substitution or addition of parties.
Pleadings are made by parties whereas substitution or addition deals with who makes the
pleadings and who is seeking what by any pleadings in the plaint or defence. Section 2 (p) of the
Civil Procedure Act defines “pleadings” to include:
“... any petition or summons, and also includes the statements in writing of the claim or
demand of any Plaintiff, and of the defence of any Defendant to them, and the reply of
the Plaintiff to any defence or counterclaim of a Defendant;”
Similarly section 100 of the Civil Procedure Act under which the Applicant purported to move
the court also deals with amendment of pleadings. It provides as follows:
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
5
“100. General power to amend
The court may at any time, and on such terms as to costs or otherwise as it may think fit,
amend any defect or error in any proceeding in a suit; and all necessary amendments shall
be made for the purpose of determining the real question or issue raised by or depending
on such proceeding.”
The substitution or addition of parties on the other hand is made under Order 1 rule 10 of the
Civil Procedure Rules which is what the Applicants Counsel seemed to base his submission on.
Addition of parties seeks to add a party to the suit.
The authorities the Applicant relies on deal with Order 1 rule 10 (2) which deals with the
addition of a party as a necessary party. Order 1 rule 10 (2) allows the substitution of a Plaintiff
or the addition of a necessary party.
Order 1 rule 10 (2) of the Civil Procedure Rules provides that:
"The court may at any stage of the proceedings either upon or without the application of
either party, and on such terms as may appear to the court to be just, order that the name
of any party improperly joined, whether as Plaintiff or Defendant, be struck out, and that
the name of any person who ought to have been joined, whether as Plaintiff or Defendant,
whose presence before the court may be necessary in order to enable the court effectually
and completely to adjudicate upon and settle all questions involved in the suit, be added."
Notwithstanding the submission that the Respondent filed no defence to this application, the
question of parties cannot be resolved by application as this is pre-emptive of the decision of this
court. The Applicant’s application was prompted by a ruling on preliminary objection made on
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
6
the 8th of May 2015 in which the Defendant objected to the Applicant’s application on the
ground that the Plaintiff did not have Locus Standi to bring the application. According to
Osborn’s Concise Law Dictionary 11th Edition Sweet and Maxwell locus standi means:
“[A place of standing]. The right to be heard in a court or other proceeding.”
The ruling of the court on the preliminary objection on the ground that the current Applicant has
no locus standi in the main suit is at page 11 of the ruling and is as follows:
“In the premises the Defendant’s preliminary objection is stayed. However because it
affects the standing of the Plaintiff in the court, it shall be tried as a preliminary issue by
calling evidence on the question of identity of the company which executed annexure "A"
to the plaint and that in annexure "C" to the plaint. It cannot be resolved on the basis of
submissions of the Plaintiff's Counsel.
Before a question of whether a different party which is a beneficiary under section 65 of
the Contracts Act 2010 can be resolved, the question of identity as a matter of fact has to
be determined before considering other matters.
In the premises the point of law raised by the Defendant remains a point of law to be tried
together with the question of authority to execute the relevant agreement by any of the
parties as far as annexure "C" to the plaint is concerned.
The point of law is stayed with costs to abide the outcome of the trial after adducing
evidence.”
By bringing this application deceptively couched as an application for amendment of pleadings,
the Applicant is trying to pre-empt the stay order of the court, staying a decision on the question
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
7
of locus standi of the Plaintiff. I decided that the question of locus standi would be tried as a
preliminary issue. A decision on locus standi would deal with the right of the Plaintiff be heard
and is fundamental in nature. The right to be heard is based on the identity of the party before the
court in relation to the contract in issue which is pleaded in paragraph 4 (a) to the plaint as
annexure “A”. The Plaintiff in effect and by this application admits that ZTE (HK) Ltd is a
different party from ZTE Corporation. In my ruling at page 10 I held that the question of
identity cannot be resolved only on the basis of the pleadings alone. However this application
will not resolve the quest for fact to resolve the issue of locus standi of the Plaintiff and the
assertion in this application that ZTE (HK) Ltd is a subsidiary needs to be tested and opportunity
given to the Defendant to further submit on the basis of facts for which a decision on the
preliminary objection was stayed.
The Applicant’s application tries to circumvent the stay order and decision of court to try the
issue of locus standi by calling evidence on the identity of the Plaintiff ZTE Corporation and
ZTE (HK) Ltd. The decision of the court was stayed to admit evidence only and for that matter
this application is incompetent for being an attempt to circumvent the order of the court. It is
struck out. There being no affidavit in opposition, it is struck out with no order as to costs.
Ruling delivered in open court the 5th of May 2015
Christopher Madrama Izama
Judge
Ruling delivered in the presence of:
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
8
Terrence Kavuma Counsel for the Applicant
Respondents Counsel not in court
Parties absent
Charles Okuni: Court Clerk
Christopher Madrama Izama
Judge
5/May 2015
Decision of Hon. Mr. Justice Christopher Madrama Izama *^*~?+:
9