Court cancels warrant of arrest against Dei Minerals boss Magoola

The Commercial Division of the High Court has set aside the execution of the warrant of arrest against the managing director of Dei Minerals International, Mathias Magoola in a case where a former minister wants to be paid UGX268 billion in legal fees.

While setting aside the arrest warrant, High Court Judge Anna Mugenyi questioned the manner in which the former minister of Urban Development Isaac Musumba, and his lawyers obtained the warrant, saying its execution would disadvantage Magoola.

Musumba had represented Dei Minerals International in a legal dispute, which saw his clients claim a compensation of $241 million (over UGX700b). 

Magoola is meant to pay Musumba the UGX268 billion as 30 percent of the decretal sum of UGX700b that Magoola and his Dei Minerals International firm are expected to earn from Videocon Industries Ltd, a UK-India based firm, for breach of contract.

The Commercial Division of the High Court on February 24 instructed Twine Muganga, a court bailiff to effect the arrest of Magoola by March 25 this year.

But Justice Anna Mugenyi on Monday, March 28, 2022, ruled that jailing Magoola will curtail his efforts to recover the monies.

“All in all, and from the fore-going, the Applicants have demonstrated that the present application is a proper case for granting an order for stay of execution and the same is accordingly granted as prayed pending determination of the Appeal.  Costs of this application shall be in the main cause,” she ruled.

 “To this court, the applicants have satisfactorily demonstrated that they will suffer substantial loss if the warrant of arrest against the 2nd applicant is executed because not only would he be incarcerated and curtailed from following up; among other things, recovery of monies mount to satisfy the respondent’s claims as well as his own, which is the main gist of the Consent Order sought to be enforced,” she ruled.

Justice Mugenyi also questioned the manner in which the warrant of arrest had been issued against Magoola.

 “Allowing execution by warrant of arrest of the 2nd Applicant to proceed without further investigation into the determination and grant of the said application for execution is likely to cause substantial loss to the Applicant who would: then, have been deprived of his right to a fair hearing resulting into violating his rights to freedom of movement, work and liberty and what all that would entail,” Justice Mugenyi ruled.

The judge also said the warrant of arrest against Magoola should have been the last resort after exploring other available options.

“In any case, as pointed out by counsel for the Applicants, execution by warrant of arrest should be a remedy of last resort when all other methods of debt collection have failed,” she ruled.

Court noted that the key clauses of the case were that Musumba would only be compensated upon recovery of the money, which has not yet happened.

“Deputy Registrar [Juliet] Hatanga …. did not at all make reference to weightier clauses of the consent judgment that were emphatic to the effect that payment to Musumba would only be after successful recovery of money from Videocon,” the appeal by Magoola states in part.

Justice Mugenyi agreed with Magoola and said that there does not appear to be any element of bad faith on the side of the latter.

“Without delving into the merits of the Appeal, the terms of payment of the Respondent’s monies appear to have been contingent to recovery of the decretal amount and there does not appear to have been evidence adduced by the Respondent to show an element of bad faith on the part of the Applicants, especially because they appear to have made an effort to explain to the Respondent the progress of the recovery process as attested to by the Respondent himself and which recovery process is meant to benefit not only the Respondent but the Applicants as well,” she said.

“The respondent contends that the applicants are bound by law to pay security for the due performance of the consent order and without such deposit being made in court, the present application is incompetent,” she added.

Magoola runs a multibillion pharmaceutical factory in Matugga, near Kampala. The multi-billion biological drugs and mRNA vaccine manufacturing facility, was commissioned by President President Museveni on July 6, 2021, and it is hoped that its construction would help “making Africa self-sustaining in health care, a giant leap”.