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05 Nov 2019
BY Patrick Turinawe
ENSight

 


Uganda: No review of arbitral awards (High Court Miscellaneous Application No. 692 of 2019): China Communications Construction Co. Limited vs Justus Kyabahwa

The cornerstone of contract law is the freedom to contract and in many cases it may also include the choice of dispute resolution. In Uganda, the law governing arbitration is the Arbitration and Conciliation Act (Cap 4). The case of China Communications Construction Co. Limited vs Justus Kyabahwa was an application to stay enforcement of an arbitral award in the High Court of Uganda pending a review of the denial by the Court to set aside the award. It is a significant case determining whether an application for review of a ruling of the High Court (setting aside an arbitral award) is competent.

An arbitral award was delivered in favour of the respondent and the applicant was ordered to pay an award of USD2 250 000 for breach of contract with interest and costs. The applicant, dissatisfied with the award, applied to the High Court to set aside the award. The application was dismissed with costs.

Consequently, the respondent applied for, and was granted, a garnishee order nisi attaching monies on accounts of the applicant. The applicant then filed an application for a review of the ruling setting aside the arbitral award before the same trial judge who declined to set it aside. Miscellaneous Application No 692 of 2019 was filed as an interim remedy staying execution pending the determination of the application for review.

The main ground for determining whether an application for stay of execution should be granted is the likelihood of success of the main application. In this case, the application for review was the main application and the question was whether it had merit.  

The Court held that the applicant had no likelihood of success. The Court reasoned that the application for review was disguised as a review whose effect would be to set aside the arbitral award. The Court re-echoed that an arbitral award is to be enforced like a decree and that the Arbitration and Conciliation Act limits the jurisdiction of courts in arbitration matters.

In another recent case of Global Wire Industries vs Trident Infratech Limited, Miscellaneous Application No 250 of 2019, the respondent was successful in an arbitration but did not file for registration of the award as a decree as provided under the Arbitration and Conciliation Act and proceeded to enforce the award. The applicant filed an application for judicial review and a litany of other applications in the High Court to stay the enforcement of the award. The Court held that the execution, the application for judicial review and the ancillary applications were a nullity as they were out of the ambits of the Arbitration and Conciliation Act.

This decision is important as it gives prominence to the Court’s continued view on the finality of arbitral awards and the constrained intervention of the courts in arbitration matters. Most importantly here is that any ingenious form of proceedings that is meant to oust an arbitral award against the exceptions granted in the Arbitration and Conciliation Act will have a limited likelihood of success in the courts.

Reviewed by Phillip Karugaba, Head of ENSafrica Advocates, Uganda

Patrick Turinawe

Senior Associate | ENSafrica advocates | Uganda

pturinawe@ENSafrica.com

+ 256 701 424 920