Wakilii

Blue Pearls Company Limited v Britam Insurance Company Limited (Miscellaneous Cause 93 of 2021)

High Court · [2022] UGCOMMC 181 · 2022 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitral award under Arbitration and Conciliation Act
Decision
Arbitral award set aside; application granted with costs to the Applicant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

An arbitral award based on unsigned insurance policies exceeding twenty-five currency points is contrary to public policy and must be set aside. Section 10(5) of the Contracts Act 2010 requires contracts exceeding 25 currency points to be in writing. The tribunal's reliance on unsigned policies to award UGX 215,465,225 and USD 2,832 contravened mandatory contract law requirements, rendering the award inconsistent with Ugandan law and therefore against public policy under section 34(2)(b)(ii) of the Arbitration and Conciliation Act.

Outcome

Arbitral award set aside; application granted with costs to the Applicant

Facts

Blue Pearls Company Limited applied to set aside an arbitral award made in CADER/ARB No. 39/2021. The arbitral tribunal had awarded UGX 215,465,225 and USD 2,832 to Britam Insurance Company Limited based on 22 unsigned insurance policies. The applicant contended that the unsigned policies did not constitute valid contracts under Ugandan law. The tribunal acknowledged throughout its award that the policies were unsigned but proceeded to make the award based on them. The applicant argued that contracts exceeding 25 currency points (UGX 500,000) must be in writing and signed under section 10(5) of the Contracts Act 2010, and that the award was therefore contrary to public policy.

Issues

  1. Whether the arbitral award in CADER/ARB No. 39/2021 should be set aside on grounds of public policy.

Orders

  • The arbitral award in CADER/ARB No. 39/2021 is set aside.
  • Costs of the application awarded to the Applicant.
  • Application to strike out affidavit in support dismissed.

Rules and key headnotes

Setting Aside Arbitral Awards — Public Policy — Conflict with Mandatory Contract Law Requirements
An arbitral award that is based on contracts which contravene mandatory statutory requirements is in conflict with the public policy of Uganda and may be set aside under section 34(2)(b)(ii) of the Arbitration and Conciliation Act.
Formalities — Writing Requirement — Contracts Exceeding 25 Currency Points
Under section 10(5) of the Contracts Act 2010, a contract the subject of which exceeds 25 currency points (UGX 500,000) must be in writing. An unsigned contract exceeding this threshold is not binding on the parties and cannot be enforced.
Arbitral Awards — Validity — Reliance on Unsigned Contracts
Where an arbitral tribunal acknowledges that the policies upon which it bases its award are unsigned but proceeds to make an award exceeding the statutory threshold for written contracts, the award is procured in contravention of the law and must be set aside.
Enforcement — Contracts Offending Section 10(5) of Contracts Act 2010
A suit or claim that seeks to enforce a contract that offends the provisions of section 10(5) of the Contracts Act 2010 is incompetent, bad in law, and barred by law.

Legislation cited (5)

Cases cited (3)

  • Lakeside Dairy Limited v International Center For Arbitration And Mediation Kampala & Another (Miscellaneous Cause No. 0021 of 2021)
  • Cooke v Turner (1845) 60 Eng Rep. 449
  • HJK Trading Co. Ltd v Ahmed Zziwa (Civil Suit No. 475 of 2018)

Full judgment

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

Blue Pearls Company Limited v Britam Insurance Company Limited (Miscellaneous Cause 93 of 2021) [2022] UGCommC 181 (19 November 2022)
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.