Wakilii

Dolamite Engineering Services Limited v Board of Governors, James Ochola Memorial S.S.S Tororo & Another (Civil Suit 413 of 2013)

High Court · [2024] UGCOMMC 277 · 2024 Matter Remitted to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of building contract seeking damages and reinstatement
Decision
Suit dismissed and dispute referred to arbitration in accordance with the contract terms

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that where parties have agreed to a mandatory arbitration clause in their contract, the court cannot entertain disputes falling within the scope of that clause. The suit was dismissed and the entire dispute referred for resolution through adjudication and arbitration proceedings in accordance with clauses 24 and 25 of the contract. The court retained only appellate and supervisory powers over the arbitration proceedings as provided by the Arbitration and Conciliation Act.

Outcome

Suit dismissed and dispute referred to arbitration in accordance with the contract terms

Facts

The plaintiff was awarded a contract in November 2011 for construction of school facilities at James Ochola Memorial S.S.S. Tororo under a Ministry of Education project. After site handover on 29 November 2011, the plaintiff mobilized materials and commenced work. The plaintiff obtained performance security and advance payment security but did not receive the advance payment. In June 2012, the project manager approved an interim payment certificate of UGX 32,378,850 which was not paid. In August 2012, the plaintiff referred the dispute to adjudication under the contract. On 17 September 2012, the school terminated the contract. The plaintiff filed suit claiming special damages, general damages for breach of contract and loss of profit. The defendants contended that the plaintiff abandoned work for more than 28 days and failed to provide valid guarantees. The contract contained mandatory arbitration clauses requiring disputes to be referred to adjudication and then arbitration.

Issues

  1. Whether the suit should proceed in the High Court notwithstanding the existence of a mandatory arbitration clause in the contract
  2. Whether the court has jurisdiction to entertain disputes covered by an arbitration agreement

Orders

  • The suit is dismissed.
  • The dispute is referred for resolution through adjudication/arbitration proceedings in accordance with clause 24 and 25 of the Conditions of Contract agreement between the parties.
  • The costs occasioned by commencing the action in the High Court shall be determined by the institution agreed upon by the parties and the said issue is accordingly also referred to the said institution.

Rules and key headnotes

Arbitration & ADR — Mandatory Arbitration Clauses — Effect on Court Jurisdiction
Where parties to a contract have agreed to a mandatory arbitration clause for dispute resolution, compliance with that clause is binding and the filing of a suit in court is not permissible until the dispute resolution mechanism in the contract has been exhausted.
Arbitration & ADR — Court Jurisdiction — Limited Jurisdiction under Arbitration and Conciliation Act
Section 9 of the Arbitration and Conciliation Act provides that no court shall intervene in matters governed by the Act except as provided in the Act. The High Court has limited jurisdiction in arbitration matters and may only exercise appellate or supervisory powers over arbitral proceedings as specified in the Act.
Arbitration & ADR — Arbitration Agreements — Binding Effect and Specific Enforcement
An arbitration agreement is distinct from other contractual clauses in that it embodies the agreement of both parties that any dispute regarding their obligations shall be settled by a tribunal of their own constitution. Unlike ordinary contractual obligations, an arbitration clause can be specifically enforced.
Civil Procedure — Dismissal of Suit — Referral to Arbitration
Where the court orders a dispute embodied in proceedings before it to be referred for arbitration, the pending suit lapses. The entire dispute is referred for resolution through arbitration in accordance with the contract of the parties, and the High Court retains only appellate and supervisory powers over the arbitration proceedings.

Legislation cited (6)

Cases cited (5)

  • USAFI Market Vendors Association v KCCA (Misc. Application No. 674 of 2018)
  • Power and City Contractors v LTL Project (PVT) (HCMA No. 0062 of 2011)
  • Yan Jian Ugando Company v Siwa Builders Engineers Ltd (Misc. Application No. 1147 of 2014)
  • Heyman and Another v Darwin's Ltd [1942] 1 All ER 337
  • British American Tobacco Uganda Ltd v Lira Tobacco Stores (HCMA No. 924 of 2013)

Full judgment

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

Dolamite Engineering Services Limited v Board of Governors, James Ochola Memorial S.S.S Tororo & Another (Civil Suit 413 of 2013) [2024] UGCommC 277 (22 February 2024)
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.