Wakilii

Hima Cement Limited v East Africa Plant Hire (U) Limited (Miscellaneous Application No. 1574 of 2024)

High Court · [2025] UGCOMMC 286 · 2025 Application Granted — Award Set Aside AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitral award under section 34 of the Arbitration and Conciliation Act
Decision
Arbitral award set aside; matter may be re-arbitrated or litigated on proper grounds

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court set aside an arbitral award on two grounds: first, the arbitrator exceeded the scope of reference by deciding the matter on quantum meruit when the dispute referred was for breach of contract; second, the arbitrator failed to disclose a prior professional relationship with the applicant's majority shareholder, rendering the proceedings partial. The court held that an arbitrator is bound to hear only matters submitted and must ensure natural justice by allowing parties to know the case they must answer.

Outcome

Arbitral award set aside; matter may be re-arbitrated or litigated on proper grounds

Facts

Hima Cement Limited and East Africa Plant Hire (U) Limited entered into a Quarry Services Outsourcing Agreement in 2018. A dispute arose regarding payment for extra dozer works allegedly executed by the respondent. The parties agreed to arbitration before Mr. Moses J. Adriko SC. The respondent claimed payment for dozer services at USD 120 per hour for 1,340 hours. The applicant denied liability, arguing the works fell outside the contract scope, and counterclaimed for a refund of USD 38,517.90. The arbitrator awarded the respondent USD 170,944.20 plus costs and fees. The applicant applied to set aside the award, alleging the arbitrator decided on quantum meruit (never pleaded by the respondent) and exhibited partiality due to an undisclosed prior professional relationship with the applicant's majority shareholder.

Issues

  1. Whether the application discloses sufficient grounds for setting aside the arbitral award?
  2. What remedies are available to the parties?

Orders

  • The arbitral award dated 8th July 2024 is set aside.
  • Costs of the application awarded to the applicant.

Rules and key headnotes

Setting Aside Arbitral Awards — Scope of Reference — Arbitrator Exceeding Jurisdiction
An arbitral award may be set aside where the arbitrator deals with a dispute not contemplated by or not falling within the terms of reference to arbitration. An arbitrator is bound to hear only the matters submitted and may not decide on claims not pleaded or submitted by the parties.
Pleadings in Arbitration — Departure from Pleadings — Quantum Meruit
Where a party claims breach of contract in arbitration but the arbitrator decides on quantum meruit (which presumes no valid contract), the arbitrator has exceeded the scope of reference. A party may not depart from its pleadings without leave to amend, and introducing a new cause of action at the submissions stage offends the cardinal rule that parties are bound by their pleadings.
Natural Justice — Right to Know the Case to Answer
The guiding principle in arbitration is that pleadings must allow the other party to know the case it has to answer at the hearing. It is the duty of the arbitrator to ensure that the rules of natural justice are adhered to in the proceedings. Introducing a new claim at the submissions stage denies the opposing party the opportunity to adduce appropriate evidence and constitutes a substantial miscarriage of justice.
Impartiality of Arbitrators — Duty of Disclosure
The principle of impartiality applies not only to the decision itself but also to the process by which the decision is made. An arbitrator must disclose to the parties any information that could be prejudicial to his or her impartiality. Failure to disclose a prior professional relationship with a party's shareholder renders the conduct of arbitral proceedings partial and biased.
Costs — Discretion of Court — Costs Follow the Event
Costs of and incidental to all suits are in the discretion of the court. Ordinarily, costs follow the event. Where a party succeeds in setting aside an arbitral award, the court will award costs to that party unless there are reasons to depart from the general rule.

Legislation cited (8)

Cases cited (12)

Full judgment

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

Hima Cement Limited v East Africa Plant Hire (U) Limited (Miscellaneous Application No. 1574 of 2024) [2025] UGCommC 286 (26 August 2025)
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.