Wakilii

Excel Construction Ltd v GCC Service Ltd (Miscellaneous Application No. 1245 of 2017)

High Court · [2018] UGCOMMC 47 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to strike out and dismiss respondent's application to set aside arbitral award due to failure to comply with court order to furnish security for performance of the award
Decision
Respondent's application to set aside arbitral award struck out and dismissed for failure to comply with court order to furnish security

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a court order must be obeyed unless set aside or varied, and failure to comply is disrespectful to judicial authority. Under Section 34(5) of the Arbitration and Conciliation Act and Rule 12 of the Arbitration Rules, the court may order security to be given as though the objector were appealing against a decree. By analogy with Order 26 rule 2(1) of the Civil Procedure Rules, failure to furnish security within the time fixed results in dismissal of the application.

Outcome

Respondent's application to set aside arbitral award struck out and dismissed for failure to comply with court order to furnish security

Facts

Excel Construction Limited obtained an arbitral award in its favour against GCC Service Limited in CAD/ARB Claim No. 34 of 2015. GCC Service Limited filed Miscellaneous Cause No. 23 of 2017 seeking to set aside the award. In Miscellaneous Application No. 156 of 2017, the court on 6 September 2017 ordered GCC Service Limited to deposit security for performance of the award within 30 days. GCC Service Limited failed and/or refused to comply with this order. Excel Construction Limited then filed the present application seeking to strike out and dismiss GCC Service Limited's application to set aside the award on the ground of non-compliance with the security order.

Issues

  1. Whether the respondent's failure to comply with the court order to furnish security for performance of an arbitral award warrants striking out and dismissing its application to set aside the award.
  2. Whether the court has jurisdiction under the Arbitration and Conciliation Act to dismiss an application for failure to provide security for performance of an award.

Orders

  • Miscellaneous Cause No. 23 of 2017 struck out and dismissed.
  • Respondent to pay costs of Miscellaneous Application No. 1245 of 2017.

Rules and key headnotes

Arbitration and Conciliation Act — Security for Performance of Award — Consequence of Non-Compliance
Under Section 34(5) of the Arbitration and Conciliation Act read with Rule 12 of the Arbitration Rules, a party challenging an arbitral award may be ordered to furnish security for its performance. The exercise of the court's power to order security is upon the same principles as the court applies where security is ordered for performance of decrees from which appeals have been made. By analogy with Order 26 rule 2(1) of the Civil Procedure Rules, failure to furnish security within the time fixed results in dismissal of the application to set aside the award.
Court Orders — Compliance — Consequences of Disobedience
A court order must be obeyed as ordered unless set aside or varied. It is not a mere technicality that can be ignored. To allow court orders to be ignored with impunity would destroy the authority of judicial orders which is the heart of all judicial systems.
Arbitration and Conciliation Act — Court Intervention — Section 9 Limitation
Section 9 of the Arbitration and Conciliation Act bars courts from exercising jurisdiction beyond the limits or special jurisdiction permitted by the Act. However, Section 34(5) expressly empowers the court to order a party challenging an arbitral award to furnish security for its performance, and therefore the court has jurisdiction to make consequential orders for non-compliance with such security orders.

Legislation cited (6)

Cases cited (5)

  • Amrit Goyal v Harichand Goyal & 3 Others (Civil Application No. 109 of 2004)
  • Jubilee Insurance Co. of Uganda & Another v Transami (Uganda) Ltd (HCMA No. 592 of 2006)
  • Wilson Kyambadde v Amdhan Khan (Miscellaneous Application No. 714 of 2015)
  • Tropical Commodities Supplies Ltd & 2 Others v International Credit Bank (Miscellaneous Application No. 379 of 2003)
  • Babcon Uganda Ltd v Mbale Resort Hotel Ltd (Civil Appeal No. 87 of 2011)

Full judgment

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

Excel Construction Ltd v GCC Service Ltd (Miscellaneous Application No. 1245 of 2017) [2018] UGCommC 47 (10 May 2018)
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.