Wakilii

Ghebremichal & Anor v Bibangamba (Civil Suit No. 628 of 2018)

High Court · [2020] UGCOMMC 42 · 2020 Preliminary Objection Allowed — Suit Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection in first instance civil suit
Decision
Suit dismissed and matter referred to arbitration

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed the suit as premature on three grounds: the parties' tenancy agreement contained a mandatory arbitration clause requiring disputes to be resolved by arbitration before litigation; the defendant was not properly served with the plaint as the affidavit of service failed to state that the person served was known to the process server or identify who witnessed service; and the tenancy agreement attached to the plaint did not bear evidence of stamp duty payment as required by section 42 of the Stamps Act, rendering it inadmissible. The court referred the parties to arbitration under clause 9(d) of their tenancy agreement.

Outcome

Suit dismissed and matter referred to arbitration

Facts

The plaintiffs sued the defendant based on a tenancy agreement. Before directions could be given, the defendant raised preliminary objections arguing that: (1) the tenancy agreement contained an arbitration clause requiring parties to first pursue arbitration; (2) the defendant had not been properly served with the plaint; (3) the tenancy agreement attached to the plaint did not bear evidence of stamp duty payment; and (4) the plaintiffs, being foreigners, should have deposited security for costs. The plaintiffs responded that the arbitration process had failed, that service had been effected, that the stamp duty objection was premature, and that requiring security for costs would be discriminatory. The affidavit of service showed that a process server served a person identified only as 'Daniel' at Holiday Express Hotel without stating prior knowledge of that person or providing the name and address of an identifying witness.

Issues

  1. Whether the suit should be dismissed for failure to first pursue arbitration as required by clause 9(d) of the tenancy agreement between the parties.
  2. Whether the defendant was properly served with the plaint in accordance with Order 5 rule 16 of the Civil Procedure Rules.
  3. Whether the tenancy agreement relied upon by the plaintiffs could be admitted in evidence without bearing stamp duty as required by section 42 of the Stamps Act.
  4. Whether the plaintiffs, being foreigners, were required to deposit security for costs before instituting the suit.

Orders

  • The preliminary objection raised by the defendant is allowed.
  • The suit is dismissed with costs to the defendant.
  • The dispute between the parties is referred for arbitration in accordance with clause 9(d) of the tenancy agreement between the two parties.

Rules and key headnotes

Arbitration Clause — Effect of Contractual Agreement to Arbitrate — Court's Jurisdiction
Where parties have incorporated an arbitration clause in a contract requiring disputes to be submitted to arbitration before court proceedings, that clause is binding on the parties as a first obligation and a court cannot interfere with the clause unless it is based on an illegality. A suit filed without first pursuing the agreed arbitration process is premature.
Service of Process — Requirements for Valid Affidavit of Service
Under Order 5 rule 16 of the Civil Procedure Rules, an affidavit of service must state that the person who accepted service was personally known to the person who served process, or must indicate the name and address of the person who identified the one on whom service was made. An affidavit that merely states service was effected but does not meet these requirements is insufficient to establish proper service.
Documentary Evidence — Stamp Duty Requirement — Documents Attached to Pleadings
A chargeable document which is intended to be relied upon as the basis of a cause of action and is attached to pleadings must comply with section 42 of the Stamps Act by indicating that stamp duty has been paid. The fact that trial has not yet commenced does not excuse non-compliance; a document attached to pleadings in support of the case must bear evidence of stamp duty payment, otherwise it is severable from the pleadings and leaves the case without a cause of action.
Abandonment of Arbitration — Agreement Required
Where there is no agreement to abandon arbitration, a court cannot bring an end to the arbitration process. Silence or inaction by one party in response to a proposal to appoint an arbitrator cannot be assumed to amount to an intention to abandon the arbitration requirement contained in the parties' agreement.

Legislation cited (4)

Cases cited (6)

  • Makula International Ltd v His Eminence Cardinal Nsubuga and Another (Civil Appeal No. 4 of 1981)
  • Proline Soccer Academy Ltd v Lawrence Mulindwa and Others (HCMA No. 459 of 2009)
  • Kensington Africa Limited v Pankajkumar Hemraj Shah and Another (HCMA No. 687 of 2012)
  • Power and City Contractors Ltd v LTL Project (Pvt) Ltd (MA No. 62 of 2011)
  • The Bremer Vulcan [1981] 1 Lloyd's Rep 253
  • The Hannah Blumenthal [1983] 1 Lloyd's Rep 103

Full judgment

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Ghebremichal & Anor v Bibangamba (Civil Suit No. 628 of 2018) [2020] UGCommC 42 (20 October 2020)
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.