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4. Rational Dispute Resolution – Weak
4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution
In-Country Assessment Information

4. Rational Dispute Resolution – Weak

Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default

 

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4.1 Rule of Law

 

Core Question:  Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Weak, the continued prevalence of customary law and weakness of the courts leads to disputes.

 

Impartiality

4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Weak – Percentile Ranking –  43.7 Trend

Source: Governance Matters  2011, World Bank, www.govindicators.org

 

Judiciary

4.1.2   Can members of the judiciary be held accountable for their actions? Yes– Score  79 out of 100 – Strong

 Source: Global Integrity Report 2011 – https://new.globalintegrity.org/

Costs of Crime

4.1.3   What are the business costs of crime and violence? High costs – Ranking  126th out of 144 – Very Weak

Source: The Global Competitiveness Report  2012-2013, World Economic Forum

http://www.weforum.org/issues/global-competitiveness  

 

 

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4.2 Enforcement of Contracts

 

Core Question:  Are systems in place for timely and efficient enforcement of contracts?
Commercial – No – Weak
Residential –   Yes – Strong

 

4.2.1 – Judicial Enforcement

Commercial – Weak – Ranking  117th out of 185 Trend   

4.2.1.1    What is the number of procedures involved in resolving a commercial dispute? 38

4.2.1.2     What is the time between the filing of a lawsuit and resolution in judicial enforcements? 490 days

4.2.1.3      What is the cost of judicial enforcements as a percentage of debt value? 44.9%

Source: Doing Business  2013– www.doingbusiness.org/ExploreEconomies/?economyid=193  

 

Residential – Strong

Survey Questions

SQ 12  What is the time between notice of intent to foreclose and loan collection in judicial enforcements? See below for power-of-sale

SQ 13  What is the cost of judicial enforcements as a percentage of property value? See below for power-of-sale

 

4.2.2 – Summary Proceedings

SQ 14  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders?  See below for power-of-sale

SQ 15  What is the cost of summary proceeding if available to lenders as a percentage of property value? See below for power-of-sale

 

4.2.3 – Power-of-Sale

SQ 16  Power-of-sale agreements give creditors to power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? 235 days – Strong

SQ 17  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? 5.28% – Very Strong

 

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4.3 Commercial Dispute Resoluiton

 

Core Question:  Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? Yes – Strong, despite a lack of funds and space, the commercial courts dispose of disputes within about seven months, as opposed to the several years it used to take litigation to wind through the Ugandan judiciary.

 

Survey Questions

Commercial Courts

SQ 18  Do specialized commercial courts exist for the handling of property disputes and foreclosures? Yes – Strong, High Court – Commercial Division, all cases must first have a mediation session before a magistrate.

Source: Judiciary of the Republic of Uganda www.judicature.go.ug/  

 

Alternative Dispute Resolution

SQ 19  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes – Strong – a member of the New York Convention. 80% of commercial disputes are settled through arbitration.

Civil Society Resource: Centre for Arbitration and Dispute Resolution

 

Commercial Treaties

SQ 20  What bilateral, regional and international commercial treaties exist concerning business between countries? Strong – a member of WTO and the East Africa Community with a Trade Investment Framework with the U.S. and Economic Partnership with the E.U.

Source: Uganda Investment Authority www.ugandainvest.com/

 

 

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In-Country Assessment Information (as of August 2008)

FQ 7.To what extent do practitioners report contracts as enforceable?

Real estate contract enforcement is questionable and none of the practitioners interviewed had a great deal of confidence in the legal system of the country.

Source: IRPF Assessment August 2008

 

 

 

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