Wakilii

Airtel Uganda Limited v Opportunity Bank Uganda Limited (Arbitration Cause 12 of 2023)

High Court · [2024] UGCOMMC 28 · 2024 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside an arbitral award under section 34 of The Arbitration and Conciliation Act
Decision
Award of general damages set aside and remitted to arbitrator for reconsideration; remainder of arbitral award upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Application to set aside arbitral award partly allowed. Court held no evident partiality was established where arbitrator and opposing counsel merely attended law school together and enrolled on same date 34 years prior; relationship too remote and trivial to require disclosure. Arbitrator did not exceed jurisdiction by framing sub-issues where these arose from parties' pleadings and evidence already adduced. Award manifestly disregarded law by awarding general damages on top of commercial interest on liquidated claim. Award of general damages set aside and remitted for reconsideration; remainder of award upheld.

Outcome

Award of general damages set aside and remitted to arbitrator for reconsideration; remainder of arbitral award upheld

Facts

On 11 April 2013, Airtel Uganda and Opportunity Bank executed a Facilitated Electronic Fund Transfer Platform Agreement (FEFT). The agreement required the respondent to hold a collection account for processing transactions. The parties agreed in Clause 8.3 that no charge would be deducted from the respondent's collection account. No charge was deducted from April 2013 to September 2019. From October 2019, Airtel started levying a 1% transaction charge. Opportunity Bank filed an arbitration claim on 22 August 2022 seeking refund of shs. 368,580,811/= deducted from October 2019 to August 2021. Airtel defended on grounds that the respondent never opened its own collection account as required by the agreement but instead transacted through an aggregator's account. The arbitrator found Airtel had breached the agreement, ordered refund with interest, awarded general damages, but denied respondent costs for failing to open its own collection account. Airtel applied to set aside the award.

Issues

  1. Whether there was evident partiality on the part of the arbitrator.
  2. Whether the arbitrator engaged in the misconduct of exceeding her jurisdiction and not complying with the terms of the arbitration agreement.
  3. Whether the award is contrary to The Arbitration and Conciliation Act.

Orders

  • The award of general damages of shs. 30,000,000/= with interest of 8% from the date of the award until payment in full is set aside and remitted to the arbitrator for re-consideration.
  • The application to set aside the rest of the award is dismissed.
  • The applicant is awarded half the costs of the application.

Rules and key headnotes

Arbitration — Challenge to Arbitrator — Evident Partiality — Standard of Disclosure
An arbitrator's duty to disclose under section 12(1) of the Arbitration and Conciliation Act is limited to interests or relationships likely to affect impartiality or which might create an appearance of partiality. Trivial, indirect, tenuous and non-substantial relationships need not be disclosed because full disclosure would be impractical for arbitrators who are knowledgeable about their field.
Arbitration — Challenge to Arbitrator — Evident Partiality — Relationship Between Arbitrator and Counsel
Advocates who attended the same law class as undergraduate or post-graduate students should be considered mere acquaintances. Such an acquaintance, standing alone, is not enough to require disclosure. Where the relationship between an arbitrator and opposing counsel is remote with no direct link to the arbitration, occurring decades earlier with no evidence of subsequent contact or close ties of affection, there is no evident partiality and no duty to disclose.
Arbitration — Challenge to Arbitrator — Standard of Impartiality for Arbitrators Distinguished from Judicial Officers
Because arbitrators are often experts within their respective fields, they have many more potential conflicts of interest than judicial officers and should not therefore be held to the same standards of judicial decorum as that applicable to judicial officers. An arbitrator's trivial, indirect, tenuous and non-substantial relationships with a party or counsel should not foreclose the arbitrator from being considered neutral.
Arbitration — Challenge to Arbitrator — Time Limit — Waiver
A party may only challenge an arbitrator's appointment within fifteen days after becoming aware of any reason to do so under section 13(3) of the Arbitration and Conciliation Act. If a challenge is unsuccessful, and the arbitrator decides that there is no reasonable apprehension of bias or other justifiable grounds to doubt the independence or impartiality of the arbitrator, he or she must then continue the arbitral proceedings and make an award. It is only after such award is made, that the party challenging the arbitrator's appointment on grounds of partiality may make an application for setting aside the arbitral award on the aforesaid ground.
Arbitration — Setting Aside Award — Scope of Review — Misconduct versus Errors of Law or Fact
Setting aside an arbitral award requires a challenge to the legitimacy of the process of decision, rather than the substantive correctness of the award. It is not misconduct on the part of an arbitrator to come to an erroneous decision, whether the error is one of fact or law, and whether or not findings of fact are supported by the evidence. An arbitral award cannot be set aside merely because it is erroneous in law or on the ground that a different view could have been taken by the court.
Arbitration — Framing of Issues — Power to Recast Issues During Proceedings
Issues can be recast at any stage prior to the delivery of the award. Where the issues as recast are substantially similar to the issues which were framed earlier, and the evidence on record is sufficient to decide even the recast issues, no prejudice will be occasioned to either party when the recasting is done without notice to the parties or giving them an opportunity to adduce additional evidence. An arbitrator is entitled to make findings on matters that were actually litigated and were necessary to a final award on the merits, whether or not the parties raised them as formal issues.
Arbitration — Setting Aside Award — Manifest Disregard of Law — Award of General Damages on Top of Interest on Liquidated Claim
An award which quantifies general damages without sufficient legal and/or evidential justification constitutes manifest disregard of the law. An arbitral award of general damages on top of and in addition to commercial interest awarded on a liquidated claim is patently illegal. The award of interest is meant to compensate a person wrongfully deprived of money for the period he or she has been deprived of the use of the money; to award general damages in addition constitutes double compensation for loss of use of money.

Legislation cited (17)

Cases cited (19)

  • Simbamanyo Estates Ltd v Seyani Brothers Co (U) Ltd (CA Misc. Application No. 555 of 2002)
  • Re Medicaments and Related Classes of Goods (No 2) [2001] 1 WLR 700
  • Porter and Weeks v. Magill [2002] 2 WLR 37; [2002] 2 AC 357; [2002] 1 All ER 465
  • Taylor v. Lawrence [2002] 2 All ER 353 at p.370, para 61
  • Halliburton Company (Appellant) v. Chubb Bermuda Insurance Ltd [2020] UKSC 48
  • R. v. Gough [1993] AC 646
  • Laker Airways Inc v. FLS Aerospace Limited [1999] 2 Lloyds Report 45 at pp.48-49
  • R. v. Sussex Justices, ex parte McCarthy [1924] 1 K.B. 256
  • Gillies v. Secretary of State for Work Pensions [2006] 1 WLR 781 [17]
  • Enka Insaat Ve Sanayi A.S. v. OOO Insurance Company Chubb [2020] UKSC 38; [2020] 2 Lloyd's Rep. 449
  • Newcastle United Football Company Limited v. The Football Association Premier League Limited and others [2021] EWHC 349 (Comm)
  • London Export Corporation Ltd. v. Jubilee Coffee Roasting Co. Ltd. (1958) A.W.L.R. 661
  • Margulies Brothers Limited v. Dafnis Thomaides & Co (UK) Limited [1958] 1 Lloyds Rep 250 at 253
  • Captain Joseph Charles Roy v D & D International (U) Limited (HC Misc. Application No. 283 of 2018)
  • Kahwa Z. and Bikorwenda v. Uganda Transport Company Ltd [1978] HCB 318
  • Mundua Richard v Central Nile Transporters Association (Misc. Civil Revision No. 3 of 2017)
  • CEF and CEG v. CEH [2022] SGCA 54
  • Rail India Technical and Economic Services Ltd v. Ravi Construction, Bangalore, 2003 (4) RAJ 394 (Kar)
  • Re Medicaments and Related Classes of Goods (No 2); Director General of Fair-Trading v. Proprietary Association of Great Britain and Proprietary Articles Trade Association [2001] 1 WLR 700

Full judgment

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Airtel Uganda Limited v Opportunity Bank Uganda Limited (Arbitration Cause 12 of 2023) [2024] UGCommC 28 (8 January 2024)
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.