Wakilii

Great Lakes Energy Company NV v MSS XSABO Power Limited and Others (Arbitration Cause 2 of 2023; Arbitration Cause 5 of 2023)

High Court · [2020] UGCOMMC 165 · 2020 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated applications for recognition and enforcement of two LCIA partial arbitral awards and objection to enforcement on public policy grounds
Decision
Application for recognition and enforcement of international arbitral awards partly allowed; portions of the awards declared unenforceable on public policy grounds; remainder recognized and enforced

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Holding

The court held that the LCIA partial awards are enforceable as final partial awards under the New York Convention. Objections were timely filed. However, orders compelling continued commercial relationships through specific performance, orders regarding shareholding that conflict with a pending High Court determination, and orders requiring change of bank mandates in favor of a party found to have engaged in secret commission are contrary to Uganda's public policy and unenforceable. The remainder of the awards were recognized and enforced. Application allowed in part.

Outcome

Application for recognition and enforcement of international arbitral awards partly allowed; portions of the awards declared unenforceable on public policy grounds; remainder recognized and enforced

Facts

Great Lakes Energy Company NV (applicant), a Netherlands company, and the respondents entered into investment agreements to develop a 20MW solar power facility in Uganda. The applicant advanced USD 150,000, USD 5 million, and USD 9.42 million in loans to the first respondent, and was to acquire 49% and ultimately 60% shareholding. A dispute arose when the respondents discovered the applicant had secretly inflated the EPC contract cost by USD 6.45 million. The respondents rescinded the investment agreement and revoked share allotment. The applicant initiated LCIA arbitration in London, which resulted in two partial awards on 11 March 2022 and 10 January 2023. The first partial award found all agreements valid, ordered disgorgement of secret commission of USD 3,089,235 and USD 775,257, but also ordered delivery of change of bank mandates. The second partial award declared 96 shares validly allotted to the applicant and ordered specific performance of share transfers. The applicant sought recognition and enforcement in Uganda while the respondents objected on public policy grounds.

Issues

  1. Whether the two partial arbitral awards from the London Court of International Arbitration are entitled to recognition and enforcement in Uganda under the New York Convention and the Arbitration and Conciliation Act.
  2. Whether the respondents' objections to enforcement were filed within the time limits prescribed by law.
  3. Whether recognition and enforcement of the partial awards would be contrary to the public policy of Uganda.
  4. Whether orders for specific performance compelling a continued relationship between parties and change of bank mandates are enforceable.
  5. Whether orders related to share transfers and shareholding conflict with pending proceedings before Ugandan courts and are thus unenforceable.

Orders

  • The application in Arbitration Cause No. 0005 of 2023 seeking to set aside the partial awards is struck out for lack of jurisdiction.
  • Recognition and enforcement of the two partial arbitral awards handed down on 11 March 2022 and 10 January 2023 is granted in part.
  • The following orders in the first partial award are declared unenforceable for being contrary to public policy: paragraph 293.2 regarding the Call Option Agreement and paragraph 293.5 regarding change of bank mandates.
  • The following orders in the second partial award are declared unenforceable for being contrary to public policy: paragraphs 271.1.1 to 271.1.5 regarding shareholding and Call Option Agreement, and paragraphs 271.2.1 to 271.2.7 and 271.3 regarding specific performance of share transfers.
  • The remainder of the partial awards is recognized and enforced.
  • The applicant is awarded half the costs of the consolidated application.

Rules and key headnotes

Recognition and Enforcement — Foreign Arbitral Awards — New York Convention — Partial Awards as Final Awards
A partial award that partially resolves the merits of the case by finally disposing of some but not all issues in dispute is enforceable in the same manner as a final award, provided it contains a final decision on the issues it addresses and meets formal requirements under the applicable arbitration rules.
Jurisdiction — Setting Aside Awards — Exclusive Jurisdiction of Courts at Seat of Arbitration
The courts at the seat of arbitration have exclusive supervisory jurisdiction over arbitral proceedings including hearing any challenges to the validity of arbitral awards. Where the seat of arbitration is London, Ugandan courts lack jurisdiction to set aside the award but retain jurisdiction to refuse recognition and enforcement on grounds specified in the New York Convention.
Recognition and Enforcement — Time Limits for Objections — Distinction Between Setting Aside and Opposing Enforcement
The one-month time limit under section 34(3) of the Arbitration and Conciliation Act applies only to applications for setting aside domestic awards, not to objections to recognition and enforcement of foreign awards. For foreign awards, objections may be filed within ninety days after notice of the application for recognition and enforcement has been served pursuant to rule 7(1) of the Arbitration Rules.
Public Policy Exception — Specific Performance Orders — Unwilling Commercial Parties
Recognition and enforcement of an arbitral award granting specific performance will be refused on public policy grounds where the order would compel a continued relationship between unwilling parties to a commercial transaction, especially where the applicant is guilty of inequitable conduct and damages would be an adequate remedy.
Public Policy Exception — Conflict with Pending Court Proceedings — Sub Judice Matters
An international arbitral award that conflicts with a local court judgment or addresses matters pending before domestic courts may be refused recognition and enforcement on public policy grounds where the conflict relates to an issue of public policy or would undermine the judicial process.
Public Policy Exception — Fettering Public Authority — Regulatory Consent
An arbitral award that purports to assume or direct the exercise of regulatory discretion by a statutory authority fetters future executive action and is contrary to public policy. Orders that require regulatory consent but purport to predetermine that outcome improperly fetter the authority's statutory duty to vet transfers in the public interest.
Public Policy Exception — Severability of Awards — Partial Recognition and Enforcement
Where different orders in an arbitral award are severable and the unenforceable portions do not overlap with other orders, the court may enforce only those portions that are not contrary to public policy, pursuant to Article V(1)(c) of the New York Convention.

Legislation cited (30)

Cases cited (30)

  • Coppee-Lavalin SA/NV v Ken-Ren Chemicals and Fertilizers Ltd [1994] 2 All ER 465
  • Dallah Real Estate and Tourism Holding Company v Ministry of Religious Affairs, Government of Pakistan [2011] 1 AC 763
  • Minister of Finance (Incorporated) v International Petroleum Investment Company [2019] EWCA Civ 2080
  • Indus Mobile Distribution Private Ltd v Datawind Innovations Private Ltd (2017) 7 SCC 678
  • Bharat Aluminium Co v Kaiser Aluminium Technical Services Inc (2012) 9 SCC 552
  • Enercon (India) Ltd v Enercon Gmbh (2014) 5 SCC 1
  • Reliance Industries Ltd v Union of India (2014) 7 SCC 603
  • C v D [2007] EWCA Civ 1282
  • Emirates Trading Agency LLC v Sociedade De Fomento Industrial Private Ltd [2015] EWHC 1452 (Comm)
  • ZCCM Investments Holdings Plc v Kansanshi Holdings Plc [2019] EWHC 1285 (Comm)
  • Republic of Uganda v Rift Valley Railways (Uganda) Ltd [2021] EWHC 970 (Comm)
  • Roko Construction Ltd v Mohammed Hamid (Civil Appeal No. 51 of 2011)
  • Uganda Lottery Ltd v Attorney General (Miscellaneous Cause No. 627 of 2008)
  • Katamba Phillip and Others v Magala Ronald (Arbitration Cause No. 3 of 2007)
  • Christ For All Nationals v Apollo Insurance Co Ltd [2002] 2 EA 366
  • Sinocore International Co Ltd v RBRG Trading (UK) Ltd [2018] 2 Lloyd's Rep 133
  • World Duty Free Co Ltd v Republic of Kenya (ICSID Case No. ARB/00/7)
  • Wena Hotels Ltd v Arab Republic of Egypt (ICSID Case No. ARB/98/4)
  • Zerbetz v Alaska Energy Center 708 P.2d 1270 (1985)
  • Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
  • Regazzoni v Sethia [1958] AC 301
  • Egerton v Earl of Brownlow (1853) 10 ER 359
  • Cooke v Turner (1845) 60 Eng Rep 449
  • Parsons and Whittemore Overseas Co v Société générale de l'industrie du papier 508 F.2d 969 (2d Cir. 1974)
  • Rederiaktiebolaget Amphitrite v The King [1921] 3 KB 500
  • William Cory & Son Ltd v London Corp [1951] 2 KB 476
  • York Corp v Henry Leetham & Sons Ltd [1924] 1 Ch 557
  • Searle v Commonwealth of Australia [2019] NSWCA 127
  • Attorney-General (NSW) v Quinn (1990) 170 CLR 1
  • Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 138 CLR 54

Full judgment

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Great Lakes Energy Company NV v MSS XSABO Power Limited and Others (Arbitration Cause 2 of 2023; Arbitration Cause 5 of 2023) [2020] UGCommC 165 (24 April 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.