Wakilii

Excel Construction Ltd v GCC Services (U) Ltd (Miscellaneous Cause No. 156 of 2017)

High Court · [2017] UGCOMMC 250 · 2017 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for security for performance of arbitral award pending determination of application to set aside the award
Decision
Application granted; respondent ordered to provide security within 30 days

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted the application, ordering the respondent to provide security for performance of an arbitral award under Section 34(5) of the Arbitration and Conciliation Act. The court held that the absence of known assets in Uganda by a party seeking to set aside an award is sufficient ground to order security for due performance of the award.

Outcome

Application granted; respondent ordered to provide security within 30 days

Facts

The respondent subcontracted the applicant to undertake construction works on two workers' base camps for Tullow Oil Uganda Operations. A contractual dispute arose between the parties and was referred to arbitration. On 8 April 2017, the arbitrator made an award in favour of the applicant totalling USD 506,225 excluding costs and interest. The respondent then applied to the High Court to set aside the award under Section 34 of the Arbitration and Conciliation Act. The applicant sought an order requiring the respondent to furnish security for performance of the award pending determination of the setting-aside application. The applicant contended that the respondent, while registered in Uganda, was a subsidiary of a foreign company with no known assets or property in Uganda that could be attached to satisfy the award if the application to set aside failed.

Issues

  1. Whether the respondent should be ordered to furnish security for performance of the arbitral award pending the determination of its application to set aside the award.

Orders

  • The respondent is ordered not later than 30 days from 6 September 2017 to deposit in court security such as an irrevocable bank guarantee or other security acceptable to the applicant for the due performance of the entire arbitral award in CAD/ARB Claim No. 34 of 2015.
  • Costs of this application shall be in the cause.

Rules and key headnotes

Arbitration & ADR — Security for Performance of Arbitral Award — Discretion of Court
Under Section 34(5) of the Arbitration and Conciliation Act and Rule 12 of the Arbitration Rules, the court has substantive discretionary power to order a party applying to set aside an arbitral award to provide appropriate security for the performance of the award pending disposal of the arbitral proceedings. The law does not specify the nature and extent of the security nor does it set out specific conditions for making the order.
Arbitration & ADR — Security for Performance of Award — Principles Applicable
The court's discretion in ordering security for performance of an arbitral award shall be exercised upon the same principles as the court applies in cases where security for performance of decrees from which appeals have been made is ordered, namely: that substantial loss may result to the applicant unless the order is made; that the application has been made without unreasonable delay; and that security for due performance of the decree is necessary.
Arbitration & ADR — Security for Performance — Absence of Assets in Jurisdiction
The fact that a party applying to set aside an arbitral award has no known assets in Uganda, especially where it is a Uganda registered company, is sufficient ground for the court to order it to provide appropriate security for the performance of the arbitral award, analogous to applications for security for costs where absence of assets within the jurisdiction alone justifies making the order.

Legislation cited (4)

  • Arbitration and Conciliation Act Cap.4 s.34(5)
  • Arbitration Rules r.7(1)
  • Arbitration Rules r.12
  • Arbitration Rules r.13

Cases cited (7)

  • Jubilee Insurance Co. of Uganda v SDV Transami (Uganda) Ltd (HCMA No. 592 of 2006)
  • Dr. Ahmed Muhammed Kisule v Greenland Bank (in liquidation) (Civil Application No. 10 of 2010)
  • Lawrence Masitwa Kyazze v Eunice Busingye (Civil Application No. 18 of 1990)
  • Bank of Uganda v Bank Arabie Espanol (Civil Application No. 20 of 1998)
  • John Murray (Publishers) Ltd & 10 Others v G. W. Senkindu & Another (HCCS No. 1018 of 1997)
  • Apollinaris Company's Trade Marks [1091] 1 ch.1
  • Margaret Kato v Joel Kato and Nulu Nalwoga (Civil Miscellaneous Application No. 11 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 Services (U) Ltd (Miscellaneous Cause No. 156 of 2017) [2017] UGCommC 250 (6 September 2017)
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.