Wakilii

Cerba Lancet Uganda Ltd v Nile International and Another (Arbitration Cause No. 5 of 2025)

High Court · [2026] UGCOMMC 181 · 2026 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application under section 34 of the Arbitration & Conciliation Act to set aside part of an arbitral award relating to costs
Decision
Application dismissed. Arbitral award upheld.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed an application to set aside an arbitral award of costs to a non-party. The court held that section 34 of the Arbitration & Conciliation Act provides for setting aside awards only in limited circumstances, none of which applied. The arbitral tribunal acted within its discretion in awarding costs to the beneficial owner of a trademark where the applicant had dealt with that entity with full knowledge and did not come to equity with clean hands. Courts reviewing arbitral awards do not function as appellate courts but decide only on legality and validity, not merits.

Outcome

Application dismissed. Arbitral award upheld.

Facts

Cerba Lancet Uganda Ltd (formerly Lancet Laboratories Uganda) and Nile International Hospital entered into a Service Level Agreement in March 2020. When a dispute arose, Nile International Hospital initiated arbitration proceedings (CAD/ARB No. 15 of 2024) against Cerba Lancet. Cerba Lancet filed a preliminary objection (Misc. Application No. 01 of 2025) arguing that Nile International Hospital was a non-existent entity lacking legal capacity, as it was not a registered company under Ugandan law and had allegedly ceased to exist in October 2018. Evidence showed that Nile International Hospital was a trademark owned by Turquoise International Healthcare Limited, which held the operational license. The arbitrator agreed that Nile International Hospital lacked capacity and dismissed the arbitration claim, but awarded costs to be paid to Turquoise International Healthcare Limited on the basis that Cerba Lancet had dealt with the entity with full knowledge and did not come with clean hands. Cerba Lancet then applied to the High Court to set aside the costs award to the non-party.

Issues

  1. Whether the Applicant has sufficient grounds warranting the setting aside of the arbitral award of costs to the 2nd Respondent?

Orders

  • Application to set aside part of the arbitral award dismissed.
  • Arbitrator's decision upheld.
  • No order as to costs.
  • Each party to bear its own costs.

Rules and key headnotes

Arbitration & ADR — Setting Aside Awards — Grounds for Intervention — Limited Judicial Review
Section 34 of the Arbitration & Conciliation Act provides the exclusive legal remedy for challenging an arbitral award and reflects a pro-arbitration approach ensuring minimal court interference. A court adjudicating the validity of an arbitral award does not function as an appellate court but merely decides upon the legality or validity of the award. The court should not concern itself with the merits of the determination. If the arbitrator has acted within jurisdiction, has not been corrupt, and has not denied the parties a fair hearing, the court should accept the arbitrator's reading as definitive even if the court might have read the contract differently.
Arbitration & ADR — Costs — Award of Costs to Non-Party — Tribunal Discretion
An arbitral tribunal has discretion to award costs to a non-party where the successful party lacks legal capacity but the non-party is the beneficial actor behind the transaction and was known to the other party throughout. The tribunal may exercise this discretion where the party seeking to challenge the award does not come to equity with clean hands, having dealt with full knowledge of the non-party's role and interest. The discretion to award costs must be exercised judiciously, taking into account the outcome of proceedings, the conduct of the parties, reasonableness of costs incurred, and the overarching interest of fairness.
Arbitration & ADR — Setting Aside Awards — Partial Setting Aside — Scope of Section 34(2)(a)(iv)
Section 34 of the Arbitration & Conciliation Act contemplates annulment of an award in its entirety. Partial setting aside is permissible only in the limited circumstances set out under subsection 2(a)(iv), where the award deals with matters not referred to arbitration. Those exceptions are narrowly construed and apply only where the impugned portion contains decisions on matters substantively not referred to arbitration.
Civil Procedure — Costs — Clean Hands Doctrine — Effect on Costs Award
A party who does not come to equity with clean hands, having drafted a defective contract and later sought to enforce points of law arising from their own actions, may be denied costs or ordered to pay costs to the other party. The principle that he who comes to equity must come with clean hands applies in determining costs awards in arbitration proceedings.

Legislation cited (7)

Cases cited (4)

  • Fort Hall Bakery Supply Co v Fredrick Wangoe [1959] EA 474
  • Sudhir Ruparelia and Another v Crane Bank Limited (in Receivership) (Miscellaneous Application No. 320 of 2019)
  • Kyaninga Royal Cottages Ltd v Kyanyinga Lodge Limited (Miscellaneous Application No. 551 of 2018)
  • Airtel Uganda Limited v Opportunity Bank Uganda Limited (Arbitration Cause No. 12 of 2023)

Full judgment

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

Cerba Lancet Uganda Ltd v Nile International and Another (Arbitration Cause No. 5 of 2025) [2026] UGCommC 181 (30 April 2026)
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.