Wakilii

Eyre Malik Agar v Gen. Moru Jijiyo and 3 Others (Miscellaneous Application No. 53 of 2023)

High Court · [2023] UGHCCD 118 · 2023 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitral award and garnishee order absolute arising from alleged fraudulent arbitration proceedings
Decision
Fraudulent arbitral award and garnishee proceedings set aside. Funds ordered returned to applicant's account with interest if not transferred within two days.

Observed later treatment

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Holding

The High Court set aside a fraudulent arbitral award and garnishee order absolute after finding that the purported arbitration proceedings never took place. The court found that the second respondent was not in Uganda during the alleged arbitration hearing, the arbitrator was not in Uganda on the date he claimed to have conducted proceedings, service of process was defective, and all documentation supporting the arbitration was fabricated to defraud the applicant of funds held in his bank account. The court ordered the return of USD 454,976 to the applicant's account within two days.

Outcome

Fraudulent arbitral award and garnishee proceedings set aside. Funds ordered returned to applicant's account with interest if not transferred within two days.

Facts

The 1st and 2nd respondents filed an arbitration cause seeking to enforce an arbitral award dated 11 July 2019 for USD 592,222.2 allegedly arising from non-payment for goods supplied under a contract dated 2 October 2008. A garnishee nisi was issued attaching the applicant's KCB bank account. After the applicant's initial lawyers withdrew their application to set aside the award, a garnishee absolute was granted on 20 March 2023 and USD 454,976 was transferred from the applicant's account to the 3rd respondent's account with Bank of Africa. The applicant then filed this application claiming he never knew the respondents, never entered into any contract with them, was not served with arbitration proceedings, and was in Khartoum Sudan during the alleged arbitration. Evidence revealed that the 2nd respondent first came to Uganda on 1 April 2022 but claimed to have testified at arbitration proceedings on 4 May 2019 at Colline Hotel Mukono. The arbitrator's passport showed no entry stamps for Uganda in May 2019. The process server who allegedly served the applicant was found to be a deceased student on clerkship, not a court process server.

Issues

  1. Whether the arbitral award dated 11 July 2019 was fraudulent and should be set aside.
  2. Whether the garnishee order absolute granted on 20 March 2023 should be set aside.
  3. Whether the applicant was properly served with arbitration proceedings.
  4. Whether the arbitrator was lawfully appointed under the Arbitration and Conciliation Act.
  5. Whether the arbitration proceedings of 4 May 2019 actually took place.

Orders

  • Miscellaneous Application No. 53 of 2023 allowed.
  • Arbitral award in Arbitration Cause No. 3 of 2023 set aside.
  • All garnishee proceedings arising from Miscellaneous Application No. 13 of 2023 and Arbitration Cause No. 3 of 2023 set aside.
  • 3rd Respondent ordered to transfer USD 454,976 from his account with Bank of Africa to the applicant's KCB account number 2201976066 within two days.
  • If transfer not made within two days, the money shall attract interest at commercial rate from date of ruling until full transfer.
  • 1st and 2nd Respondents ordered to pay costs of the application to the applicant.
  • No order as to costs against the 3rd Respondent.

Rules and key headnotes

Arbitration & ADR — Setting Aside Arbitral Awards — Fraud — Court's Power to Set Aside Fraudulent Awards
Courts have inherent power to set aside arbitral awards procured through fraud, and cannot condone fraud where a baseless arbitral award is used to steal money from an unsuspecting party's account, as this constitutes an illegality that courts must not allow to stand.
Civil Procedure — Service of Process — Requirements for Valid Service — Personal Service
For service to be deemed proper and effective, there must be proof of service by a serving officer or process server, and the affidavit of service must state the time and manner of service and the name and address of the person identifying the person served and witnessing delivery of the summons.
Civil Procedure — Service of Process — Defective Affidavit of Service — Effect
Failure to record the name and address of the person identifying the person to be served renders the affidavit of service incurably defective and does not amount to effective service of proceedings.
Evidence — Credibility of Witnesses — Contradictions in Testimony — Effect on Proceedings
Where a witness claims to have participated in proceedings on a specific date but evidence establishes that the witness was not in the country on that date, and where the alleged arbitrator's passport shows no entry stamps for the relevant period, such contradictions prove that the proceedings did not take place and any award arising therefrom is a nullity.
Arbitration & ADR — Garnishee Proceedings — Execution of Fraudulent Awards — Court's Power to Set Aside
Garnishee proceedings arising from a fraudulent arbitral award cannot stand and must be set aside, as courts of law cannot be used as places where fraudulent arbitral awards are sanitized in order to defraud innocent parties.
Contract Law — Proof of Contract — Mathematical Errors — Effect on Credibility
Where a contract and all subsequent documents consistently contain a fundamental mathematical error in calculating the total price of goods allegedly supplied, and the error results in a claim for one-tenth of the correct amount, this indicates that the documents were fabricated by the same person and casts serious doubt on the existence of any genuine transaction.

Legislation cited (8)

Cases cited (4)

  • Surgipharm (U) Limited v Uganda Investment Authority and Graphics System (U) Limited (Miscellaneous Cause No. 65 of 2021)
  • MB Automobiles vs. Kampala Bus Service [1966] EA 400
  • Owani vs. Bukenya Salongo [1976] HCB 62
  • Makula International Versus His Eminence Cardinal Nsubuga (1982) HCB 24

Full judgment

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

Eyre Malik Agar v Gen. Moru Jijiyo and 3 Others (Miscellaneous Application No. 53 of 2023) [2023] UGHCCD 118 (25 April 2023)
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.