Wakilii

Bayeti Farm Enterprises Ltd v Transition Grant Services & 2 Ors (CAD ARB 2 of 2009)

Tribunal · [2009] UGCADER 3 · 2009 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for compulsory appointment of a single arbitrator under Section 11 of the Arbitration and Conciliation Act
Decision
Arbitrator appointed; matter to proceed to arbitration

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Centre for Arbitration and Dispute Resolution held that pending High Court proceedings do not automatically preclude the compulsory appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act where the parties to the arbitration application differ from those in the court case. The tribunal appointed an arbitrator, finding that the arbitration agreement in Article 79 of Ark Chick Limited's Articles of Association was valid and enforceable, and that respondents who fail to appoint an arbitrator after proper notice may be subject to compulsory appointment by the tribunal.

Outcome

Arbitrator appointed; matter to proceed to arbitration

Facts

Bayeti Farm Enterprises Ltd and the respondents were parties to Ark Chick Limited, a company whose Articles of Association contained an arbitration clause at Article 79. Differences arose between the applicant and the first and second respondents regarding management and investment issues of Ark Chick Limited. On 20 November 2008, the applicant served notice of intention to commence arbitration proceedings and notice to concur in the appointment of an arbitrator on the respondents. The respondents did not respond or appoint an arbitrator. The applicant then applied to CADER for the compulsory appointment of an arbitrator. The respondents opposed the application on the ground that Ark Chick Limited had sued Joseph Muyeti Zema (a person associated with the applicant) in HCCS No.147/2008 before the Commercial Court, and that the same issues were pending before Justice Geoffrey Kiryabwire.

Issues

  1. Whether the Centre for Arbitration and Dispute Resolution should appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act despite pending High Court proceedings involving related parties.
  2. Whether the existence of HCCS No.147/2008 before the High Court precluded the compulsory appointment of an arbitrator.
  3. Whether the respondents' failure to respond to the notice to concur in the appointment of an arbitrator justified the compulsory appointment.

Orders

  • Application granted.
  • Mr. Kagaba Muhumuza appointed as arbitrator.
  • Should Mr. Kagaba Muhumuza decline appointment under Section 12(1) ACA on grounds of impartiality, Mr. Geoffrey Otim or Rachel Kabala shall be deemed appointed in sequential order.
  • Arbitrator directed to sign Declaration of Impartiality and Party Undertaking Agreement and file same with CADER upon assuming jurisdiction.
  • Arbitrator directed to return file to CADER for archiving upon completion of case.
  • All monies regarding the arbitration to be submitted through CADER.
  • Costs of the application awarded to the applicant, to be borne by the respondent.

Rules and key headnotes

Arbitration & ADR — Compulsory Appointment of Arbitrator — Effect of Pending Court Proceedings
Pending court proceedings do not preclude the compulsory appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act where the parties to the arbitration application are distinct from the parties to the court case.
Arbitration & ADR — Arbitration Agreement — Binding Effect Under Section 5 ACA
An arbitration agreement is binding on the parties under Section 5 of the Arbitration and Conciliation Act unless it is shown to be null and void, inoperative, or incapable of being performed, or that there is no dispute between the parties.
Arbitration & ADR — Duty to Alert Court of Arbitration Clause
Where a respondent in a Section 11 ACA application is aware that a court is presiding over a matter that may be affected by the arbitration clause in issue, the respondent is obligated to notify the court so that the matter may be resolved under Section 5 ACA promptly.
Arbitration & ADR — Section 11 ACA Application — Tribunal's Consideration Limited to Arbitration Agreement and Failure to Appoint
In considering whether to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, the tribunal is bound to consider only the presence of an arbitration agreement and the failure by the respondent to appoint an arbitrator, regardless of the reasons for such failure.

Legislation cited (9)

Cases cited (2)

  • Comtel Integrators Africa Ltd v J & M Airport Road Hotel/Apartments and Leisure Centre Ltd (CAD ARB 1 of 2009)
  • Ark Chick Ltd v Joseph Muyeti Zema (HCCS 147 of 2008)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Bayeti Farm Enterprises Ltd v Transition Grant Services & 2 Ors (CAD ARB 2 of 2009) [2009] UGCADER 3 (11 March 2009)
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.