FROM: Firm C1 & Co.

Advocates
TO: Liquidator
DATE: 6/09/2022
SUBJECT: LEGAL OPINION ON THE LAW AND PROCEDURE FOR
RECOGNITION OF FOREIGN PROCEEDINGS IN UGANDA
1. The Law:
This relates to cross boarder insolvency practice. The UN General Assembly, in an
attempt to address the inefficacies of the uncoordinated approaches to cross boarder
insolvency; in December 1997 endorsed the UN Commission on International Trade Law
(UNCITRAL) model law on cross boarder insolvency. These rules are internationally
recognised and accepted as guidelines on cross boarder insolvency. Uganda has been
pacesetter in the East African Region to incorporate the model law in its substantive law
regime.
Part IX of the Insolvency Act, 2011 (the ‘Act’) elaborately provides for cross boarder
insolvency in line with the model law. Kenya has followed suit and made provision fro
the model law particularly under section 20 of the Kenyan Insolvency Act, 2015. The
Act provides that the Model law on cross border insolvency has the force of law in Kenya
in the form set out in the 5th Schedule. The rest of the East African states are yet to adopt
the model law. However, Uganda and Kenya can only work together under the enabling
law,
Section 121 (1) of the Act provides that where the Minister is satisfied that any state has
enacted laws for reciprocity in bankruptcy which have the same effect as this part, the
Minister may by Statutory Instrument declare the state to be a reciprocating state and the
court with jurisdiction in bankruptcy to be a reciprocating court for purposes of this Act.
More so, section 225 (3) of the Act provides that cross border insolvency rules shall not
come into force until the Chief Justice by Statutory Instrument declares that the
reciprocating state has similar rules. Currently, the Ugandan and Kenyan Cross-border
Rules are pending finalization. This effectively means that in order for Uganda and
Kenya to have a coordinated cross boarder insolvency practice, it is not enough that both
Uganda and Kenya have incorporated the model law in their respective insolvency
legislation but that enabling regulations must be passed the line Minister.
2. The Procedure:
This is provided for under section 235 of the Act as follows;
(1) A foreign representative may apply to court for recognition of the foreign proceedings
in which the foreign representative has been appointed.
(2) An application for recognition shall be accompanied by—
(a) a certified copy of the decision commencing the foreign proceeding and appointing
the foreign representative;
(b) a certificate from the foreign court affirming the existence of the foreign proceeding
and of the appointment of the foreign representative; or
(c) in the absence of the evidence referred to in paragraphs (a) and (b), any other evidence
acceptable to the court, of the existence of the foreign proceedings and the appointment
of the foreign representative.
(3) An application for recognition shall also be accompanied by a statement identifying
all foreign proceedings against the debtor that are known to the foreign representative.
(4) The court may require a translation into English of documents supplied in support of
the application for recognition.
The effect of recognizing a foreign receiver
Section 240 of the Act provides for the effects of recognition of foreign main
proceedings
(1) Upon recognition of a foreign main proceeding—
(a) commencement or continuation of individual actions or individual proceedings
concerning the debtor’s assets, rights, obligations or liabilities is stayed;
(b) execution against the debtor’s assets is stayed; and
(c) the right to transfer, encumber or dispose of any assets of the debtor is suspended.
(2) The scope and the modification or termination of the stay and suspension in
subsection (1) are subject to this Act.
(3) Subsection (1) shall not affect the right to commence individual actions or
proceedings to the extent necessary to preserve a claim against the debtor.
(4) Subsection (1) shall not affect the right to request the commencement of a proceeding
under this Act or the right to file claims in such a proceeding.
In conclusion, the liquidator in Kenya may not be able to access the MMLs assets in
Uganda by virtual of appointment in Kenya with out but shall take all the steps as by law
prescribed under the insolvency act of 2011 to be recognized as a foreign liquidator in
Uganda .

1. What are the arguments you would raise in contesting the application for
recognition of the liquidators proceedings.

As much as the judgment is recognised, it is unenforceable in courts of Uganda as there is no

reciprocal treaty with Kenya as per (Section 2 of Foreign Judgments (Reciprocal Enforcement)
Act Cap 9) neither has the Minister made any statutory order to give the same effect of
registration in Uganda. A state is not bound to enforce within its territories the judgment of a
foreign tribunal unless there is a reciprocal treaty as per Goddard versus Gray 1870 LR 6 QB
139). This is the position in Uganda today. It was also the intention of the legislature when
enacting Foreign Judgments (Reciprocal Enforcement) Act Cap 9

It is only the Minister (responsible) with mandate to make a statutory order with effect to
reciprocity (under S.2 of Foreign Judgments (Reciprocal Enforcement) Act Cap 9) and not court.
The authority of M/s Gulu Municipal Council Vs Nyeko Gabriel & others (1996) HCB 66 is
instructive. It is illegal to ask court to enforce a foreign judgment basing on general common law
principles when there is a specific statutory law applicable

As per the Foreign Judgments (Reciprocal Enforcement) Act Section 7 of Cap 9, it states that
no proceedings for recovery of a sum payable under a foreign judgment, being a judgment to
which this part of this Act applies, other than proceedings by way of registration of the judgment
shall be entertained by any court in Uganda