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PTA Bank v Ogang; The never-ending COMESA case

The PTA Bank v Ogang case has continued to trouble the nascent COMESA Court. The court has already made a decisive ruling on its jurisdiction with respect to the PTA Bank charter and apparent conflict with the COMESA Treaty. In the latest decision, the court tackles allegations of apparent bias made against some of its members. It is an absorbing decision, but it pushes further into the future the prospect of an eventual conclusion to this pioneering case. The decision also calls into doubt the value of the previous ground-breaking decisions of the court in this dispute.

PTA Bank & Gondwe v Ogang
COMESA COURT, LUSAKA
LORDS KORSAH, NYAKINYE, KALAILE, SAKALA and MUTSINZI

Date of Judgment: 26 April 2002
Sourced By: S Dhanji
Citation: [2000] LLR 8 (COM)

Bias – Rule against bias – Previous acquaintance between judge and litigant – Relationship known to applicants – Whether there was an appearance of bias – Whether judge was disqualified under statute by failure to disclose interest – Whether there can be waiver of a statutory disqualification on ground of bias

Bias – Waiver – Facts leading to appearance of bias known to applicants – Failure to disclose interest by judge – Applicants acquiesced for two years – Whether regularity can be conferred on the proceedings by acquiescence – Whether proceedings must be set aside
Procedure – Preliminary applications – Omission to order preliminary report or hold preliminary enquiry – Whether judge president had discretion to omit preliminary report – Whether proceedings irregular

In December 1999 the former president of PTA Bank, Mr Ogang, was removed from office by the bank’s board of governors and replaced by Dr Gondwe. He brought Reference 1B/2000 contesting his removal and seeking declarations that his removal was illegal, null and void, and seeking orders reversing his removal as well as damages. Concurrently, he brought an application, 1A, seeking an expeditious order suspending of the resolution removing him from office. The judge president ruled that this latter application must be served on the respondents who would have 2 weeks to file a response. On the date of serving application 1B on the respondents, the applicant lodged a further application, 1C, seeking exparte suspension orders to forestall an imminent meeting of the board of governors. The application was granted but the board of governors ignored the order. The bank then brought a reference, 1D, raising preliminary objections to the court’s jurisdiction in entertaining reference 1B and applications 1A and 1C. The court upheld its jurisdiction in an extensive ruling.

Mr Ogang subsequently brought a further reference, 1E, seeking committal for contempt and sequestration of the property of the PTA Bank and the governors who ignored the order in 1C. On the day of hearing 1E, the advocates for PTA Bank stalked out in protest. The court however raised and considered a preliminary issue of whether reference 1E was well founded. It surprisingly concluded that the exparte order in application 1C was a nullity as the respondent ought to have been served with the application before the exparte hearing. The court therefore declined to grant the orders of committal or sequestration.

It was in this involved and advanced state of affairs that PTA Bank and Dr Gondwe, the now-acting president of the bank, brought this application for stay of proceedings in Reference 1B/2000 and an order that the matter be heard de novo. The applicants alleged failure to follow some procedural steps on preliminary reports and enquiries after receipt of preliminary applications. Further, it was alleged that the Lord President Akiwumi and Justice Ogoola ought to have recused themselves from hearing the earlier reference and applications on the ground of apparent bias.

Lord Justice Akiwumi had been involved in drafting the PTA Bank charter together with Dr Gondwe. Mr Ogang had subsequently contacted the Lord Justice in 1996 (then an appeal court judge in Kenya) to prepare an opinion to resolve some matters in dispute among the members of the board of governors. Later in 1999, Dr Gondwe had invited the Lord President to lunch and had sought his opinion on the immunity of the PTA Bank following the Kenyan appeal court decision in Tononoka Steels v PTA Bank.

Dr Gondwe further stated that in September 1999, after a request by Mr Ogang, he had taken Lord Ogoola out for lunch to obtain advice on how to reclaim PTA Bank’s immunity, which had been lost in the Tononoka case. Lord Ogoola had spent the night at Mr Ogang’s house. Dr Gondwe asserted that Lord Ogoola and Mr Ogang were friends because they had been work colleagues for a period of two years from 1989.

Under Article 22 of the Charter, any judge directly or indirectly interested in a case before the Court should report the nature of his interest to the President who shall determine whether the judge’s interest in the case is prejudicial. If the President is directly or indirectly interested he shall consider the nature of his interest and if of the opinion that it would be prejudicial for him to take part in a case he shall recuse himself. The court therefore considered whether Reference 1B/2000 should be stayed and the matter heard de novo.

Held:

1. The President is not enjoined to order a preliminary report or to hold a preliminary enquiry every time a Reference is made.

2. There is no evidence on record to suggest that Justice Akiwumi and the Respondent were bosom friends, rather than they were dealing with each other professionally and at arms-length. No reasonable person would reasonably suspect bias on the part of the judge.

3. In any case, the right to challenge proceedings conducted in breach of the rule against bias may be lost by waiver, either express or implied, except in the case of a new statutory disqualification. The applicants knew of the facts in this case but had done nothing about them for two years. Even had the court held that Justice Akiwumi was disqualified due to the likelihood of bias, the applicants had lost by waiver their right to challenge under the common law the proceedings conducted in this Court in respect of which Justice Akiwumi in any way participated.

4. Regarding Justice Ogoola, the test is whether a reasonable person might reasonably suspect bias, if a tribunal of which the judge was a member was adjudicating a matter in which the Respondent was a party. We do not for a moment doubt that Justice Ogoola is a man of integrity who would not allow his prior acquaintance with the respondent to cloud his judgment. However, the fundamental rule of law is that justice should not only be done, it should manifestly and undoubtedly be seen to be done.

5. Justice Ogoola should have disclosed the nature of his interest to the Judge President for the latter’s consideration. Having failed to do so, he should take no further part in these proceedings. Since this disqualification is imposed by statute, regularity cannot be conferred by waiver or acquiescence. It follows, therefore, that the proceedings thus far in Reference 1B/2000 in which Justice Ogoola participated are irregular and must be set aside.

Reference 1B/2000 referred to the Judge President for his consideration.

LawAfrica thanks Mr Salim Dhanji for this decision. Should you feel that there are decisions of particular importance to Advocates in East Africa and you wish them to be considered for HFTB kindly send these to the address below.

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