Court approves Aya Bakery receivership
Nov 15, 2010
THE Commercial Court has rejected an application by Aya Bakery to block being put under receivership and paying a sh2b arbitral award to Roko Construction.
By Hillary Nsambu
THE Commercial Court has rejected an application by Aya Bakery to block being put under receivership and paying a sh2b arbitral award to Roko Construction.
The head of the Commercial Court, Justice Geoffrey Kiryabwire, ruled that Enoth Mugabi of Mugabi and Company Advocates, who was appointed receiver of the Aya Bakery, should, instead, immediately enter the premises and prepare a statement of affairs of the company and file his findings in court.
The judge also ordered Mugabi to ensure the smooth operation of the company under receivership until the final determination of the company’s main application challenging the award and receivership.
“The receiver shall not waste or dispose of any company assets. He should also ensure that receivership is managed in the interest of all creditors,†Kiryabwire ruled.
Aya Bakery was recently put under receivership for failure to pay over sh2b to Roko Construction Limited, which it contracted in 2005 to construct a factory building at Plot 16A in Kawempe on Bombo Road.
The judge agreed with Enos Tumusiime, the lawyer representing Roko Construction, that a company under receivership cannot bring such an application under its own name other than the names of the receiver.
Tumusiime had also opposed an affidavit sworn by his fellow lawyer, GodfreySserunkuuma-Lule supporting the company’s application, arguing that in doing so, he became a potential witness in the case.
However, Lule argued that there was no absolute bar that the directors of a company cannot bring a case in the name of the company, as it all depends on the circumstances of the case.
He said there was no law barring him from swearing the affidavit.
The application, he said, was not against the receiver but the judgment creditor, Roko Construction Company and the arbitral award. Retired Justice Alfred Karokora made the award.
THE Commercial Court has rejected an application by Aya Bakery to block being put under receivership and paying a sh2b arbitral award to Roko Construction.
The head of the Commercial Court, Justice Geoffrey Kiryabwire, ruled that Enoth Mugabi of Mugabi and Company Advocates, who was appointed receiver of the Aya Bakery, should, instead, immediately enter the premises and prepare a statement of affairs of the company and file his findings in court.
The judge also ordered Mugabi to ensure the smooth operation of the company under receivership until the final determination of the company’s main application challenging the award and receivership.
“The receiver shall not waste or dispose of any company assets. He should also ensure that receivership is managed in the interest of all creditors,†Kiryabwire ruled.
Aya Bakery was recently put under receivership for failure to pay over sh2b to Roko Construction Limited, which it contracted in 2005 to construct a factory building at Plot 16A in Kawempe on Bombo Road.
The judge agreed with Enos Tumusiime, the lawyer representing Roko Construction, that a company under receivership cannot bring such an application under its own name other than the names of the receiver.
Tumusiime had also opposed an affidavit sworn by his fellow lawyer, GodfreySserunkuuma-Lule supporting the company’s application, arguing that in doing so, he became a potential witness in the case.
However, Lule argued that there was no absolute bar that the directors of a company cannot bring a case in the name of the company, as it all depends on the circumstances of the case.
He said there was no law barring him from swearing the affidavit.
The application, he said, was not against the receiver but the judgment creditor, Roko Construction Company and the arbitral award. Retired Justice Alfred Karokora made the award.