Guangdong Hao He Engineering & Construction Company (U) Ltd v Britam Insurance Co (U) Ltd & Anor (Miscellaneous Cause No. 37 of 2020)

Observed later treatment

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

The High Court dismissed the application for an interim measure of protection restraining payment under performance and advance payment bonds pending arbitration. The court held that interim measures under section 6 of the Arbitration and Conciliation Act require existing arbitration proceedings. Where arbitration proceedings had lapsed due to the applicant's failure to pay filing fees, the court could not grant interim relief based solely on the existence of an arbitration clause in the contract. The preliminary objection that the arbitration had abated succeeded.

Outcome

Application dismissed with costs to the respondents

Facts

The applicant, a construction company, entered into a contract with the 2nd respondent on 1 November 2018 to construct a hotel and apartments. The 1st respondent issued advance payment and performance bonds as security. On 4 June 2020, the 2nd respondent terminated the contract. The 2nd respondent subsequently demanded payment under the bonds totalling approximately USD 2.4 million. The applicant protested the termination as unlawful and initiated ICC arbitration proceedings. However, the applicant failed to pay the required ICC filing fees, causing the arbitration file to close. The applicant then sought an interim measure from the High Court restraining payment under the bonds pending arbitration. The 2nd respondent raised preliminary objections that the application was incompetent, that the applicant lacked privity to the bonds, and that the arbitration had abated.

Issues

1. Whether the advance payment and performance bond guarantees issued by the 1st Respondent to the 2nd Respondent were conditional or on-demand bonds.
2. Whether the application for mandatory temporary injunction is incompetent.
3. Whether the applicant has privity to the contracts of guarantee.
4. Whether the pending arbitration had abated, precluding the grant of interim measures.
5. Whether the applicant is entitled to the interim measure of protection sought.

Orders

• Application for mandatory interim measure of protection restraining the 1st Respondent from effecting payment on the Advance Payment Bond No. 900/120/1/000072/2018/11 and Performance Bond No. 900/120/1/000073/2018/11 denied.
• Costs of this application awarded to the respondents.

Rules and key headnotes

Legislation cited (9)

• Arbitration and Conciliation Act Cap 4 s.6
• Arbitration and Conciliation Act Cap 4 s.5
• Arbitration Rules, First Schedule to the Arbitration and Conciliation Act Cap 4 r.13
• Judicature Act Cap 12 s.33
• Civil Procedure Act Cap 71 s.98
• Contracts Act 2010 s.68
• Contracts Act 2010 s.65
• Civil Procedure Rules Order 41 r.1
• Civil Procedure Rules Order 41 r.2

Cases cited (10)

• John Sekaziga and Another v Church Commissioners Holding (Miscellaneous Cause No. 15 of 2013)
• International Investment House Company LLC and Emirates Africa Link for Strategic Alliance (LLC) v Amos Nzeyi and Others (Miscellaneous Cause No. 11 of 2012)
• Victor Construction Works Ltd v Uganda National Roads Authority (MA No. 601 of 2010)
• Robert Kavuma v Hotel International Ltd (Supreme Court Civil Appeal No. 8 of 1990)
• Interfreight Forwarders (U) Limited v East Africa Development Bank (SCCA No. 22 of 1992)
• Mitanda v URA (MA No. 1424 of 2017)
• Byaruhanga and 2 Others v Kabagahya (Miscellaneous Application No. 564 of 2016)
• Gapco Uganda Ltd v Kaweesa and Another (MA No. 259 of 2013)
• Nkabwe Christopher and Another v Shebba Steven and another (Miscellaneous Application No. 1784 of 2012)
• E.L.T Kiyimba Kaggwa v Haji Abdu Nasser Katende [1985] HCB 43

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

• Multiplex Limited v Ditaco Uluslararasi Ticaret ve Muteahhit Lik Limited Sirketi (Misc Cause 78 of 2022)

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