_____________

KAMPALA - Court has dismissed a petition that had sought to kick Olive Zaituni Kigongo out of the Uganda National Chamber of Commerce and Industry (UNCCI) on grounds that it was filed out of time.

Phares Matanda, who describes himself as a founding chamber member, had sought a declaration that chamber president Kigongo, secretary general Ezra Rubanda and the executive are illegally occupying UNCCI offices.

He also wanted the court to direct Kigongo and Rubanda, together with their executive committee to account for all the funds and properties of the chamber handled during their tenure in office.

However, Justice Musa Ssekaana of the Civil Division of the High Court dismissed the suit on the grounds that it was filed out of time.

“The suit was instituted more than 10 years after the cause of action arose and thus cannot be said to be within time,” Ssekaana ruled and ordered Matanda to pay costs of the suit.

In a ruling dated September 15, 2023, the judge explained that the limitation period within which one can commence a suit founded on a contract shall be six years from the date on which the action arose which in the circumstances is 2003 when the amendment was made.

The Limitation Act under section 3 (a) provides that actions founded on a contract or tort shall not be brought after the expiration of six years from the date on which the cause of action arose.

In this case, the judge observed that the memorandum and articles of association of the company constitute the contract between the members/subscribers. He added that the memorandum and articles of association also constitute the contract between Kigongo and Rubanda.

“Looking at the pleadings and evidence, the allegations made against Kigongo and Rubanda arose in 2001 upon their election to the office and later 2003 when the amendments were made,” he observed.

The judge said the suit was filed before the court on December 16, 2016, 15 years after the defendants were appointed in office.

Ssekaana said the court should not aid the plaintiff in resuscitating such a claim which is time-barred, adding that the essence of a limitation law is that the legal right to enforce an action is not a perpetual right, but a right generally limited by statute.

“Once the action is stale and statute-barred, no matter how well it is conducted and determined, all the efforts put in it comes to nought and the court has no jurisdiction to deal with it,” he stated.

The judge noted that irregularity in the internal running of a company cannot be a basis for one to bring a derivative action or suit since such can be rectified by a vote/resolution at the company’s meeting.

He added that if a shareholder contemplates using a personal claim of infringement of his rights, then a derivative suit must be for the benefit of the company.

According to the judge, the plaintiff’s claims are purely intended for his benefit and not for the company.

“The company could make resolutions to amend the Articles of Associations in the best interests of the company,” he advised.

Ssekaana also ruled that the plaintiff does not have locus standi to bring a derivative action against the defendants as he is not a UNCCI member. Locus standi is the right or ability to bring a legal action to a court of law or to appear in a court.

The court found that the plaintiff ceased to be a member of the UNCCI in 2009 when he last paid his annual subscription as provided for under clause 7 of the articles of association.

“As far as the law is concerned, it is now settled that for a plaintiff to file an action, he must have locus standi which in the circumstance, the plaintiff lacks. In the premises, the defendant’s objection is sustained,” he ruled.