Company Law

G.M Combined Limited v A.K Detergents Uganda Limited ((Civil Appeal No.34 Of 1995)) [1996] UGSC 11 (17 May 1996);

Flynote: 

Search Summary: 

This was an appeal against the order of the High Court requiring the appellant to furnish security for costs in a suit in which the appellant had sued the respondent for recovery of immovable property, allegedly obtained fraudulently.

 

The grounds of the appeal were that, the trail judge erred in failing to consider the merits of the appellant’s case, whether the decision was made with made, and whether the trail court erred on the mode and quantum of the security it ordered.

Headnote and Holding: 

From the evidence that was adduced, it was found that the appellant was under receivership because it could not pay its debenture holders, it was under liquidation proceedings for failure to pay a judgment creditor, and was indebted to many creditors and was involved in multiplicity of suits.

 

Therefore, it was found that it was right to order for security of costs, considering the financial status of the appellant.

 

Further, the court found that there was no basis for bias by the trail judge against the appellant.

Concerning last ground of appeal, it was found that security for costs at 50,000,000/= was excessive, and was thereby reduced to 30,000,000/= which was payable within 30 days.

 

Accordingly, the appeal was partly allowed on that ground.

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