THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISCELLANEOUS APPLICATION NO……………OF 2025
(ARISING OUT OF CIVIL SUIT NO……………… OF 2023)
ATTORNEY GENERAL………………………APPLICANT/JUDGEMENT DEBTOR
VERSUS
BITWENDA PROPERTIES LTD…….RESPONDENT/JUDGEMENT
CREDITOR
APPLICANT’S WRITTEN SUBMISSIONS
INTRODUCTION
These submissions are made on behalf of the Applicant in support of its
application seeking to set aside the Garnishee Order Nisi issued against the
Petroleum Fund, to stay further execution proceedings, and to be awarded costs.
The Respondent’s attempt to attach the Petroleum Fund contravenes
constitutional and statutory provisions governing the management of public funds
in Uganda and is, therefore, illegal.
BACKGROUND
The High Court Commercial Division of Uganda passed a
judgement in September 2023 in favour of the respondent in
respect to a contract with Ministry of finance to design the
refurbishment of the ministry headquarters in Kampala and were
awarded Ugx. 2,600,000,000/= with interest of 15% and costs.
The registrar High Court Commercial Division issued a garnishee
order nisi in respect to the petroleum fund account
0045800222600040 in Bank of Uganda in execution of the
judgement which was served on 9th May 2025 by the respondent
to the executive director of Bank of Uganda.
ISSUES FOR DETERMINATION
1. Whether the Petroleum Fund Account Number
0045800222600040 can be attached?
2. Whether the attachment was regular?
3. What remedies are available to the parties?
RESOLUTION
1. Whether the petroleum fund account can be attached?
Your Lordship, the Petroleum Fund account cannot be attached.
The system of management of funds by government is
constitutional and its foundation is under Article 154 of the
constitution. Like the consolidated fund, it is created in a similar
way by an Act of Parliament. Article 153 of the Constitution
provides as follows:
“153. Consolidation Fund.
(1) There shall be a consolidated Fund into which shall be
paid all revenues or other monies raised or received for
the purpose of, or on behalf of, or in trust for the
Government.
(2) The revenues or other monies referred to in clause (1)
of this article shall not include revenues or other
monies-
(a) That are payable by or under an Act of Parliament,
into some other fund established for a specific purpose;
or
(b) That may, under an Act of Parliament, be retained
by the department of Government that received them
for the purposes of or on behalf or in trust for the
Government shall be paid. Secondly, article 154
provides that there shall be no
withdrawal from the consolidated fund except as
authorized by law. It provides as follows:
“154.Withdrawal from the Consolidated Fund.
(1) No monies shall be withdrawn from the
Consolidated Fund except-
(a) to meet expenditure charged on the fund by
this Constitution or by an Act of Parliament; or
(b) where the issue of those monies has been
authorized by an Appropriation Act, a
Supplementary Appropriation Act or as provided
under clause (4) of this article.
(2) No monies shall be withdrawn from any public
fund of Uganda other than the Consolidated Fund,
unless the issue of those monies has been authorized
by law.
(3) No monies shall be withdrawn from the
Consolidated Fund unless the withdrawal has been
approved by the Auditor General and in the manner
prescribed by Parliament.
(4) If the President is satisfied that the Appropriation
Act in respect of any financial year will not or has not
come into operation by the beginning of that
financial year, the President may, subject to the
provisions of this article, authorize the issue of
monies from the Consolidated Fund Account for the
purposes of meeting expenditure necessary to carry
on the services of the Government until the
expiration of four months from the beginning of that
financial year or the coming into operation of the
Appropriation Act, whichever is the earlier.
(5) Any sum issued in any financial year from the
Consolidated Fund Account under clause (4) of this
article in respect of any service of the Government-
(a) Shall not exceed the amount shown as
required on account approved by Parliament by
resolution for that financial year
(b) Shall be set off against the amount provided
in respect of that service in the Appropriation Act
for that financial year when that law comes into
operation.
(c) Expenditure out of the consolidated fund has
to be charged by the Constitution or by an Act of
Parliament, otherwise money shall not be
withdrawn from the Consolidated Fund since it is
the preserve of Parliament to do so. Similar
provisions have been enacted to apply to the
Petroleum Fund.
Your Lordship under section 2 of the Public Finance
Management Cap 171 the term Petroleum Fund is defined.
Petroleum Fund means the fund established under section 54.
The term “petroleum revenue” also means tax paid under the
Income Tax Act on income derived from petroleum operations,
Government share of production, Signature bonus, surface
rentals, royalties, proceeds from the sale of Government share of
production, any dividends due to Government, proceeds from the
sale of Government’s commercial interests and any other duties
or fees payable to the Government from contract revenues under
a petroleum agreement. Finally, the “Petroleum Revenue
Investment Reserve” means the investment reserve referred to in
section 60 of the Public Finance Management Act.
My Lord, considering paragraph 4,our client states that Garnishee order Nisi was
issued to attach the Petroleum fund Account in Bank of Uganda to satisfy the
decretal sum and also paragraph 5,our client states that that account is majorly
for collection of oil revenues and the Petroleum fund Account is also regarded
as a consolidated fund and not liable for attachment.
Your Lordship there are specific statutory provisions which govern
the management of the Petroleum Fund that emphasize the
authority of Parliament on how those Funds are to be generated
and managed. To interfere with the system created by Parliament
on how to apply those moneys may be a breach of the doctrine of
separation of powers. Your worship the executive arm of
Government cannot change the rules of the management of the
funds neither can the courts. Only legislature through an Act of
Parliament can. The Petroleum Fund is created by an Act of
Parliament which is provided for under section 54. Thereof that
petroleum revenues which accrue to Government shall be paid to
the Fund and disbursements from the funds shall be /overseen by
the Minister. Section 54 of the Public Finance Management
Act Cap 171 provides as follows:
“54. Establishment of the Petroleum Fund.
(1) There is established a fund to be known as
the Petroleum Fund.
(2) The petroleum revenues, which accrue to
Government, shall be paid into the Petroleum
Fund.
(3) The Minister shall be responsible for the
overall management of the Petroleum Fund and
shall oversee the transfer into and the
disbursements from the Petroleum Fund.
Secondly apart from providing for the creation
of the fund, the law also prescribes which
revenue shall be paid into it under section 55
as follows:
“57. Collection and deposit of the Petroleum
revenues into the Petroleum Fund
(1) The petroleum revenue due to the
Government shall be collected or received by
the Uganda Revenue Authority.
(2) The petroleum revenue assessed as due
each month, shall be paid by the seventh day
of the following month by the person obliged
to make the payment.
(3) Where a person does not make a
payment by the date specified in subsection
(2), the person shall pay as a penalty, a
surcharge of seven percent of the amount in
default for each day of default.
(4) Where Government accepts petroleum
instead of cash, the value of the petroleum
shall be calculated in an international and
freely convertible currency, at the rate
pertaining on the day the petroleum is to be
received.
(5) The National Oil Company shall receive
and record petroleum received as an asset of
the Petroleum Fund, and shall submit a copy
of the record to the Minister, Uganda
Revenue Authority, the secretary to the
Treasury, the Accountant General and the
Auditor General.
(6) Upon disposal of the petroleum received
under subsection (4), the proceeds shall be
collected by Uganda Revenue Authority and
shall be remitted directly into the petroleum
Fund.”
Your Lordship the subsequent section 56 of the Public Finance
Management Cap 171 prescribes how monies shall be
withdrawn from the petroleum fund. It is couched in mandatory
terms. Withdrawals shall only be made under an authority of an
Appropriation Act of Parliament. Appropriation Acts are passed
after government presents a budget for approval of Parliament.
Section 56 of the Public Finance Management Act cap 171
provides as follows:
“56. Withdrawals from the Petroleum Fund.
Withdrawals from the Petroleum Fund shall only be made under
authority granted by an Appropriation Act and a warrant of the
Auditor General
a. To the Consolidated Fund, to support the
annual budget; and
b. To the Petroleum Revenue Investment
Reserve, for investments to be undertaken
in accordance with section 61
Your Lordship, the only way to withdraw funds from the Petroleum
fund is through an Act of Parliament. To make an order or cause
through court order to withdraw funds from the consolidated fund
or from the Petroleum Fund without an appropriation of the funds
by Parliament after considering a budget to justify the approval of
expenditure charged on the fund offends the cardinal doctrine of
separation of powers and is unconstitutional. The term
“appropriation” is defined by section 2 of the Public Finance
Management Act to mean “an authorization made under an
Appropriation Act permitting payment out of the consolidated
fund or the Petroleum Fund under specified conditions or for a
specified purpose”. Secondly the term “Appropriation Act” means
“the Act passed in accordance with Article 156 of the
Constitution, which authorizes expenditure of public money for
financial year.” Finally the expenditures of government are
presented to Parliament in a budget and maybe approved. The
term “budget” is also defined and means the Government plan of
revenue and expenditure for the financial year”
According to paragraph 3 of the affidavit in reply to this
application, the respondent avers that order nisi for attachment of
Petroleum Fund Account 0045800222600040 with Bank of
Uganda is untrue which is inconsistent with the law provided for in
the Constitution and the Public Finance Management Act.
Your Lordship, a garnishee order nisi attaching and transferring
revenues in the Petroleum Fund usurps powers of the Executive
to present a budget for approval of Parliament and also usurps
powers of Parliament to authorize any expenditure out of the
Petroleum Fund. It is unconstitutional because it offends the
doctrine of separation of powers as stated in the Zimbabwean
case of Smith v Mutasa and Anor (1990) LRC 87.
In that case the Supreme Court of Zimbabwe held that the
Constitution is the supreme law of the land and Parliament though
supreme in the legislative field assigned by the Constitution
cannot go beyond its constitutional limits.
The Supreme Court of the India in special Reference No. 1
of 1964 (1965) 1 SCR 413 at 446 that;
“…just as the legislature are conferred legislative
authority and their functions are normally confined to
legislative functions, and functions and authority of the
executive lie in the domain of executive authority, so
jurisdiction and authority of judicature in this country lie
within the domain of adjudication….” (reported in All India
Reporter (1965) (Vol 52) page 745 SC pages 1 – 1200).
In Smith vs. Mutasa (Supra) the court held at page 95
that:
“the Constitution of Zimbabwe divides powers between
the executive, the legislature and the judiciary as l have
mentioned above, and…leaves to courts of law the
question of whether there has been any excess of power,
and require them to pronounce as void any act which is
ultra vires.”
Your Lordship the Executive present a budget to get funds out of
the Petroleum Fund and it is up to Parliament to exercise its
mandate to see whether the withdraw from the fund as proposed
by the Executive Arm of Government should be made or not. The
court cannot interfere with that process by imposing another
route for withdrawals out of the Petroleum Fund in the name of
satisfying judgement debts in execution.
Your Lordship the garnishee proceedings as attached and
purporting to transfer any money from the petroleum Fund is an
illegality and is null and void. Whether the procedure followed in
moving the court is right or wrong the law is that an illegality
once brought to the attention of court overrides all questions of
pleadings including any admissions made therein of court
overrides all questions of pleadings including any admissions
made therein is found in the Ugandan Case of Makula
International vs His Eminence Cardinal Nsubuga and
another reported in (1982) HCB 11 and holding No.16 of
the digest of the case, that the court could interfere with a taxing
officer’s order even where the appeal from the order was
incompetent. They held that, “a court of law cannot sanction what
is illegal and illegality once brought to the attention of court
overrides all questions of pleadings, including any admissions
made thereon.
Your Lordship in conclusion Section 19(4) is to the effect that no
execution or attachment or process in the nature of an execution
or attachment shall be issued out of any court for enforcing
payment by the government of any such money or costs and no
person shall be individually liable under any order for payment by
the government as such of any such money or costs. This was
reechoed in the case of Attorney General and Uganda Land
Commission v Namaiba Tea Estate Ltd (Misc App
No.758/2012).
Your Lordship it is our submission that the Petroleum Fund
Account 0045800222600040 in Bank of Uganda cannot be
attached by the respondents in relation to execution of the
decree in Civil Suit No.222 of 2023 as it would be illegal and
unconstitutional.
2. Whether the attachment of the Petroleum Fund Account
was regular
Your Lordship, the attachment was irregular. An irregular
execution is one where any of the requirements of the rules of
court or of the practice for the time being have not been complied
with James Kabaterine vs Charles Oundo and Ors HCCA 177
of 1994.
My Lord, considering paragraph 8 of the affidavit in support of Notice of
Motion,it shows that our client went through the file but did not find any
certificate order and yet it is one of the essential requirements to be followed
while executing against the government.
Section 19(1) of the Government Proceedings Act Cap 287;
Provides for satisfaction of orders against the Government.
Under Section 19(2) of the Government Proceedings Act, a
copy of any certificate issued under this section maybe served by
the person in whose favour the order is made on the Attorney
General.
Your Lordship, we perused the file but did not come across the
certificate order that means the Judgement Creditor did not issue
the certificate order on the Attorney General as it is provided for
by the law before attachment and there is no record admission of
it in respondent’s affidavit of reply.
Your Lordship the case of Brother Peter Vs Attorney General
(1980), the court stated that the proper procedure is for
judgement creditor to apply for and obtain a certificate of
satisfaction order from the Registrar and present it to the proper
officer of accounts after endorsement from the Attorney General
for payment.
Therefore, it is our submission that the attachment of the
Petroleum Fund Account Number 0045800222600040 was
irregular.
3.What remedies are available to the applicant?
The Applicant prays that the Court exercises its discretion
to grant appropriate reliefs in the interests of justice.
Setting aside the garnishee order nisi
Your Lordship the garnishee order issued in respect of the
Petroleum Fund was unlawful and unconstitutional. The
Court is empowered Section 98 of the Civil Procedure
Act Cap 282, to set aside any process that amounts to
an abuse of court process or is inconsistent with
substantive justice.
In Standard Chartered Bank (U) Ltd v Grand African
Safaris Ltd, HCCS No. 36 of 2010, the High Court held
that courts have inherent power to prevent abuse of
process by setting aside irregular orders.
Setting aside the garnishee nisi order relating to the
Petroleum Fund is necessary to avert further illegality and
irreparable damage to the national financial system.
Your Lordship the Respondent acted contrary to the
established legal procedure by attempting execution
against a protected public fund.
Costs
Your Lordship Section 27(1) of the Civil Procedure
Act Cap 282 provides that subject to such conditions
and limitations as prescribed, and to the provisions of any
law for the time being in force, the cost of and incident
to, all suits shall be in the discretion of court or judge,
and the court or judge shall have full power to determine
by whom and out of what property and to what extent
those costs are to be paid, and to give all necessary
directions for the purposes aforesaid.
In conclusion your Lordship the case of Jennifer
Rwanyindo Aurelia & Another v School Outfitters
(U) Ltd, Civil Appeal No. 53 of 1999, the Court of
Appeal held that costs follow the event and a successful
party should not be deprived of them except for good
cause. The Applicant is thus entitled to costs of this
application.
Conclusion
The Petroleum Fund is not amenable to attachment or
execution. It is governed by a strict statutory regime that
prohibits withdrawal except by an Act of Parliament
through an Appropriation Act. The Garnishee Order Nisi
issued against the applicant it is illegal and
unconstitutional.
The authorities of Bank of Uganda v Ajanta Singh,
Silver Springs, Makula International, section 19 of
the Government Proceedings Act, and section 59 of
the PFMA all converge on this point.
Wherefore, the Applicant humbly prays that this
Honorable Court:
1. The order Nisi in execution application No. 111
arising out of Civil Suit 222 of 2023 be set aside.
2. The applicant’s Petroleum Protection Fund Account
0045800222600040 in Bank of Uganda be
immediately released from execution/attachment.
3. Costs of this application be provided for.
We so pray.
DATED at Kampala this 14th day of May, 2025.
ABIGAIL NATASHA
COUNSEL FOR THE APPLICANT
ATTORNEY GENERAL CHAMBERS
DRAWN & FILED BY;
ATTORNEY GENERAL’S CHAMBERS
MINISTRY OF JUSTICE AND CONSTITUTIONAL AFFAIRS
PLOT 7 PARLIAMENTARY AVENUE
BAUMANN HOUSE
P.O.BOX 7183 KAMPALA
