Wakilii

Oil Seeds (U) Limited v Uganda Development Bank (Civil Appeal 9 of 2009)

Supreme Court · [2010] UGSC 35 · 2010 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal from the Court of Appeal concerning the enforceability of an arbitral award
Decision
Appeal dismissed; the arbitral award held unenforceable by reason of the settlement, and the prayer for interest refused

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Cited — treatment unverified cited in 5 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

The Supreme Court dismissed a second appeal seeking to execute an arbitral award of UGX 2,882,400,000 as a decree. The Court held that the award was rendered unenforceable by a settlement the parties voluntarily entered into while objections and cross-objections to the award were still pending before the High Court. Under rule 14 of the Arbitration Rules an award could only be enforced after objections were disposed of; here they were resolved by the settlement, which the Registrar merely sealed. The settlement, on its plain wording, covered the whole dispute, and the appellant, having received UGX 870,000,000, was estopped from reviving the award. The claim for interest accordingly failed.

Facts

In 1988 the appellant took a loan from the respondent bank to finance an oil extraction and milling plant. Disputes arose and the loan was recalled in 1992. Pursuant to an arbitration clause, an arbitrator awarded the appellant UGX 300,000,000 general damages and the respondent its outstanding loan and interest. Dissatisfied, the appellant obtained a fresh arbitrator who, on remission, awarded it UGX 2,882,400,000 for loss of profits but declined a claim of UGX 1,023,644,800. The appellant filed an application to remit that declined claim in part, and the respondent cross-objected to the whole award. Before the High Court disposed of the application, the parties entered into a settlement on 25 July 2000, under which the respondent paid the appellant and its lawyers UGX 870,000,000, duly received. Almost a year later the appellant sought to have the UGX 2,882,400,000 award executed as a decree, contending the settlement covered only the separate claim.

Issues

  1. Whether the arbitral award of UGX 2,882,400,000 made in the appellant's favour was rendered unenforceable by the settlement deed endorsed by the Registrar.
  2. Whether the settlement entered into by the parties related to the entire dispute, including the arbitral award, or only to the appellant's separate claim of UGX 1,023,644,800.
  3. Whether the Court of Appeal erred in refusing to order that the arbitral award be executed as a decree of the High Court with interest.

Orders

  • The appeal is dismissed.
  • Costs of the appeal awarded to the respondent in this Court and in the courts below.

Key headnotes

Arbitration — Enforcement of Award — Effect of a Voluntary Settlement of Pending Objections
Where parties voluntarily settle their objections and cross-objections to an arbitral award before the court disposes of them, the award is thereby rendered unenforceable and cannot afterwards be executed as a decree of the court.
Arbitration — Enforcement of Award — Rule 14 Arbitration Rules — Objections Must First Be Disposed Of
Under rule 14 of the Arbitration Rules, an application to enforce an arbitral award as a decree of court cannot be made until any objections lodged against the award have been dealt with by the court.
Civil Procedure — Registrar's Powers — Sealing a Settlement of a Pending Application
A Registrar acts within the inherent jurisdiction of the court in sealing or endorsing a settlement reached by the parties in respect of a matter still pending before the court, and such endorsement does not vitiate the settlement.
Contract Law — Construction of a Settlement Deed — Plain Meaning and Estoppel
A settlement deed expressed in clear words must be given its natural meaning covering the whole dispute referred to, and a party who has received and accepted the agreed sum in full and final settlement is estopped from later reviving a claim said to fall outside it.

Legislation cited (14)

  • Arbitration Act, Cap. 55 (repealed) s.9(2)
  • Arbitration Act, Cap. 55 (repealed) s.11
  • Arbitration Act, Cap. 55 (repealed) s.12
  • Arbitration Act, Cap. 55 (repealed) s.13
  • Arbitration Rules (Rule 55-2) r.7
  • Arbitration Rules (Rule 55-2) r.8
  • Arbitration Rules (Rule 55-2) r.14
  • Civil Procedure Act, Cap. 65 s.35 (now Civil Procedure Act, Cap. 71 s.34)
  • Civil Procedure Act, Cap. 65 s.101 (now Civil Procedure Act, Cap. 71 s.98)
  • Judicature Statute 1996 s.35 (now Judicature Act, Cap. 13 s.33)
  • Judicature Act, Cap. 13 s.14
  • Civil Procedure Rules Order 46 rr.2, 3 and 4
  • Constitution of Uganda art.126
  • Constitution of Uganda art.139(1)

Cases cited (3)

  • Gokaldas Laximidas Tanna v Sr. Rosemary Muyinza and Another (Civil Appeal No. 12 of 1992)
  • Christopher Sebuliba v Attorney General (Civil Appeal No. 38 of 1995)
  • Oil Seeds (Uganda) Ltd v Uganda Development Bank (Civil Appeal No. 23 of 1995)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.