Wakilii

Comtel Intergrators Ltd v J & M Airport Road Hotel Apartments & Leisure Centre Ltd (CAD ARB 1 of 2009)

Tribunal · [2009] UGCADER 2 · 2009 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for compulsory appointment of a second arbitrator under Section 11 of the Arbitration and Conciliation Act
Decision
Second 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 an arbitration clause survives termination of the underlying contract by virtue of the severability principle in Section 16 of the Arbitration and Conciliation Act. Questions regarding the existence of a dispute or the validity of an arbitration clause must be raised before the court or arbitral tribunal, not before CADER when considering an application for compulsory appointment of an arbitrator. One party's assertion that no dispute exists is insufficient to defeat an application under Section 11. The application was granted and a second arbitrator was appointed.

Outcome

Second arbitrator appointed; matter to proceed to arbitration

Facts

On 6 December 2006, the parties concluded a Sale Agreement for the supply and installation of ICT Network Infrastructure at the respondent's hotel. The agreement contained an arbitration clause providing for disputes to be referred to two arbitrators, one appointed by each party. A dispute arose and the applicant terminated the agreement. The applicant appointed Patricia Basaza Wasswa as its arbitrator on 25 November 2008 and requested the respondent to appoint a second arbitrator. The respondent refused to appoint an arbitrator, contending that the contract had been terminated and the arbitration clause was extinguished. The applicant had previously sued the respondent in the High Court Commercial Division (HCCS 28 of 2008), which case was dismissed at a preliminary stage with directions to refer the matter to arbitration. The respondent maintained that no dispute existed and that arbitration was expensive and uncalled for.

Issues

  1. Whether CADER has jurisdiction to appoint a second arbitrator under Section 11 of the Arbitration and Conciliation Act where the respondent has failed to appoint an arbitrator.
  2. Whether an arbitration clause survives termination of the underlying contract.
  3. Whether the existence of a dispute is a precondition for the compulsory appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act.
  4. Whether pending court proceedings preclude CADER from appointing an arbitrator under Section 11 of the Arbitration and Conciliation Act.

Orders

  • Application granted.
  • Deepti Chowdhury appointed as the second arbitrator.
  • Should Deepti Chowdhury decline the appointment under Section 12(1) of the Arbitration and Conciliation Act on grounds of impartiality, Solome Luwaga or Rachel Kabala shall be deemed appointed in sequential order to act as second arbitrator.
  • The arbitrator is reminded to sign the Declaration of Impartiality and Party Undertaking Agreement and file the same with CADER upon assuming jurisdiction.
  • All monies regarding the arbitration should be submitted through CADER.
  • Costs of the application awarded to the applicant.

Rules and key headnotes

Arbitration Agreement — Severability — Survival of Arbitration Clause After Termination of Contract
An arbitration clause forms part of a contract but is treated as an agreement independent of the other terms of the contract under Section 16(1)(a) of the Arbitration and Conciliation Act. Termination of the underlying contract does not extinguish the arbitration clause, which survives to govern disputes arising from or relating to the terminated contract.
Compulsory Appointment of Arbitrator — Existence of Dispute Not a Precondition
When considering an application for compulsory appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, CADER is not required to determine whether a dispute exists. Questions regarding the existence of a dispute or the validity of an arbitration clause must be raised before the trial court under Section 5 or before the arbitral tribunal under Section 16, not before CADER at the appointment stage.
Existence of Dispute — One Party's Assertion Insufficient
One party's assertion that there is no dispute in existence is not sufficient to defeat an arbitration clause. A dispute exists until the defendant admits that the sum is due and payable or otherwise concedes the claim. Silence or refusal to engage does not negate the existence of a dispute.
Pending Court Proceedings — Effect on Section 11 Application
The existence of pending court proceedings does not preclude CADER from appointing an arbitrator under Section 11 of the Arbitration and Conciliation Act. The issue of pending proceedings is relevant only when a court makes a final determination regarding the validity of the arbitration clause under Section 5 or when the arbitral tribunal rules on its jurisdiction under Section 16(6). The legislature's silence on pending proceedings in Section 11 indicates that such proceedings are not relevant at the appointment stage.
Substantive Justice — Application of Article 126(2)(e) of the Constitution
Substantive justice shall be administered without undue regard to technicalities under Article 126(2)(e) of the Constitution. Technical defects in a chamber summons, such as the absence of a party's or advocate's signature, do not render an application incurably defective where the content of the application is clear and the opposing party is able to respond substantively to the issues raised.

Legislation cited (13)

Cases cited (9)

  • Masaba v R [1967] EA 488
  • Gandesha v VG Lutaaya [1994] 3 KALR 20
  • Farmland Industries Ltd v Global Exports Ltd [1991] HCB 72
  • Hayter v Nelson [1990] 2 Lloyd's Rep 265
  • The M Eregli [1981] 2 Lloyd's Rep 169
  • Ellerine v Klinger [1982] 1 WLR 1375
  • Ellerine Bros Ltd v Klinger [1982] 2 All ER 737
  • BM Steels v Kilembe Mines (CAD ARB 10 of 2004)
  • Comtel Integrators (A) Ltd v J & M Airport Road Hotel/Apartments and Leisure Centre (HCCS 28 of 2008)

Full judgment

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

Comtel Intergrators Ltd v J & M Airport Road Hotel Apartments & Leisure Centre Ltd (CAD ARB 1 of 2009) [2009] UGCADER 2 (4 February 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.