Chongquing International Construction Corporation v Zeintaka Corporation (Japan ) and Another (Miscellaneous Civil Application No. 1122 of 2020)

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

The High Court held that it has jurisdiction under s.6(1) of the Arbitration and Conciliation Act to grant interim measures of protection even where parties have agreed to arbitration. The court found that the applicant satisfied the conditions for security for appearance, given that the respondents are foreign entities in the final stages of their project with no clear evidence of assets in Uganda, and ordered the respondents to furnish a bank guarantee or face attachment of payments due from UNRA.

Outcome

Application allowed; respondents ordered to furnish bank guarantee within 7 days, failing which payments from UNRA shall be attached

Facts

The applicant, Chongqing International Construction Corporation, filed Civil Suit No. 854 of 2020 against the respondents, Zenitaka Corporation (Japan) and Hyundai Engineering & Construction Co. Ltd, seeking recovery of USD 473,319.514 and UGX 170,060,613.7. The respondents were executing construction works for the new Nile Bridge at Jinja under contract with Uganda National Roads Authority. The applicant contended that the respondents, being foreign entities, were in the final stages of the project (expected completion March 2021) and likely to leave Uganda upon completion without resolving the disputes, rendering any judgment nugatory. The respondents opposed the application, asserting they had movable and immovable assets in Uganda worth billions and that the subcontract contained a binding arbitration clause requiring disputes to be resolved through arbitration. The subcontract in question involved works related to the New Nile Bridge, which was commissioned in 2018, with the respondents remaining until expiry of the Defects Liability Period.

Issues

1. Whether the court has jurisdiction to entertain the application given the existence of an arbitration clause in the parties' subcontract.
2. Whether the applicant satisfied the conditions under Order 40 Rules 1 and 2 of the Civil Procedure Rules for an order directing respondents to furnish security for appearance.
3. Whether the court should grant an order for attachment before judgment of sums due to the respondents from Uganda National Roads Authority.

Orders

• The Respondents shall furnish to this honourable Court a Bank Guarantee in the sum of USD 473,319.514 and UGX 170,060,613.7 within 7 working days from the date of this ruling.
• In the event the Respondents fail to comply with the order to furnish a bank guarantee within the time stipulated, the payments sufficient to satisfy the sums in the above order due to the Respondents under the contract between the Respondents and UNRA shall be attached and deposited in this honourable court pending determination of the dispute between the parties.
• Costs shall be in the cause.

Rules and key headnotes

Legislation cited (11)

• Civil Procedure Act s.64
• Civil Procedure Act s.98
• Judicature Act Cap 13 s.33
• Civil Procedure Rules S.I 71-1 Order 40 Rule 1(1)(b)
• Civil Procedure Rules S.I 71-1 Order 40 Rule 2
• Civil Procedure Rules S.I 71-1 Order 41 Rule 7
• Civil Procedure Rules S.I 71-1 Order 41 Rule 9
• Civil Procedure Rules S.I 71-1 Order 52 Rule 1
• Arbitration and Conciliation Act Cap 4 s.40
• Arbitration and Conciliation Act Cap 4 s.5
• Arbitration and Conciliation Act Cap 4 s.6(1)

Cases cited (5)

• Shell (U) Limited v Agip (U) Limited (Supreme Court Civil Appeal No. 49 of 1995)
• Ivan Samuel Sebaduka v Warid Telecom Limited (High Court Miscellaneous Application No. 204 of 2014)
• Mahmoud Saad Said and Another v Attorney General (High Court Miscellaneous Application No. 1023 of 2015)
• Swabri Ali Abubaker Mukungu v Kobil Uganda Limited (High Court Miscellaneous Civil Application No. 41 of 2015)
• Welt Machinen Engineering Ltd v Chine Road & Bridge Corporation and 2 Others (High Court Miscellaneous Application No. 51 of 2015)

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