Court upholds Leads Insurance Limited’s appeal against IRA after 10 years

The Court of Appeal has upheld Leads Insurance Limited’s appeal against the Insurance Regulatory Authority (IRA) Uganda after 10 years since it was filed.

An appeal that had spent 10 years on shelves since it was filed by Leads Insurance was upheld by a Coram of three Court of Appeal judges including; Justices of Appeal Muzamiru Mutangula Kibeedi, Christopher Gashirabake and Fredrick Egonda-Ntende who alluded that its time was due.

The appeal in question arises from the ruling of Hon. Justice Eldad Mwangushya delivered on the 5th day of April 2013 at the High Court of Uganda at Kampala, Civil Division. The background to this appeal is that in 2012 the Appellant (Leads Insurance), was a holder of a license issued to it by the respondent (Insurance Regulatory Authority Uganda) authorising it to carry on insurance business for the year ending 31st of December 2012.

However, in the course of the year of 2012, the appellant experienced operational challenges following the freezing of its bank accounts by the Bank of Uganda and several Court Orders of the Nabweru Chief Magistrate’s Court on account of the Criminal investigations and eventual prosecution of the appellant’s majority shareholder and director, Christopher Obey (now deceased).

ln the course of processing the appellant’s application for issuance of the insurance License for the year 2013, the respondent learnt that the appellant’s bank accounts had been frozen. At the same time, the respondent got complaints from the appellant’s clients about the non-settlement of their claims owing to the freezing of the bank accounts. This made the respondent revoke the Appellant’s operational license.

The appellant was aggrieved with the decision of the Respondent to revoke its license, and instituted a suit by way of judicial review, seeking a declaration that the revocation of its License by the Respondent was a nullity in law; an order for certiorari quashing the resolution of the Respondent made on 20th December 2012 revoking the appellant’s license.

The Appellant asked that the court prohibit the Respondent and or any officer of the Respondent from implementing or otherwise taking action against the appellant on the basis of the Resolution and revocation, and an order of mandamus to compel the Respondent to renew the Appellant’s License for the year 2013.

However, after hearing the arguments of both parties, the trial Judge ruled that the Appellant’s application for judicial review did not establish any ground for judicial review and dismissed it with costs.

Nevertheless, the Appellant was dissatisfied with the decision of the High Court and appealed to this court on the grounds that; the trial Judge erred in law when he held that no ground of judicial review had been established. The trial Judge erred in law and fact when he failed to rule on whether the Respondent’s notice of revocation complied with the relevant law and the subsequent revocation process as contemplated by the said law, etc.

The Appellant filed their Appeal to the court of Appeal through their lawyers Mr Nasser Lumweno of M/s Lumweno & Co. Advocates, and Mr Yesse Mugenyi of M/s Mugenyi & Co. Advocates.

In their submission, they faulted the trial judge for failing to evaluate the evidence before him in order to establish whether the respondent acted illegally, irrationally and with Procedural impropriety when it revoked the license of the Appellant.

Unfortunately, their Appeal has been at a standstill for almost 10 years but on Friday the three Appeal judges ruled to uphold the Appellant’s appeal.

In their ruling; Justice of Appeal Kibeedi said by the time the appeal came before the Court of Appeal for hearing and disposal, the remedies sought by the appellant had long been overtaken by the passage of time and would have rightly been referred to as “academic” if it were not for the “public interest” component in the dispute of Court of Appeal made a judicial pronouncement on the procedure for the exercise of the respondent’s mandate of revoking insurance licenses, which is a matter of great public importance.

“To that extent, the appeal would succeed, and I would declare that the respondent did not comply with the law when revoking the appellant’s insurance licence of 2012. I would allow the appeal and set aside the Ruling and orders of Hon. Justice Eldad Mwangushya, J (as he then was) made on the 5th day of April 2013 in Miscellaneous Cause No. 1 of 2013 of the High Court of Uganda at Kampala, Civil Division, and declare that the respondent did not comply with the law when revoking the appellant’s insurance licence of 2012.”

Justice of Appeal Christopher Gashirabake also agreed with Justice Kibeedi’s ruling as well as Egonda -Ntende Justice of Appeal.