Wakilii

Kampire & Anor v Karangira (HCT-00-CC-MA 532 of 2012)

High Court · [2013] UGCOMMC 32 · 2013 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 Arbitration and Conciliation Act s.34
Decision
Arbitral award set aside; parties directed to appoint new arbitrator

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 multiple grounds. While service of notice on the applicants' counsel was proper, the mistake of counsel preventing participation in arbitration proceedings necessitated setting aside the award. The award was also contrary to law: the decretal sum was awarded twice (as both decretal sum and special damages), general damages of UGX 100,000,000 against a claim of UGX 9,125,900 were excessive and punitive, and interest on general damages at 25% was unjustified. The award failed to meet the Arbitration Act's requirements of justice and fairness.

Outcome

Arbitral award set aside; parties directed to appoint new arbitrator

Facts

On 15 January 2007, the parties entered an agreement for renovation and construction work on the applicants' house in Entebbe. The respondent completed the work, and parties agreed a balance of UGX 9,125,900 payable on 31 August 2007. This sum was never paid. The respondent filed a civil suit in the Chief Magistrate's Court, Entebbe. The parties consented to arbitration. The respondent proposed Ms. Gloria Basaza as arbitrator. Ms. Basaza wrote to both parties on 15 November 2011 giving seven days to object. The applicants' counsel received the letter but did not respond. Ms. Basaza set down the matter for hearing on 10 December 2011. The applicants' counsel received notice but did not attend or formally respond. Arbitration proceedings were held ex parte and an award of UGX 142,380,100 was made against the applicants. The applicants applied to set aside the award under section 34 of the Arbitration and Conciliation Act.

Issues

  1. Whether the appointment of the arbitrator was lawful.
  2. Whether the arbitration proceedings were proper.
  3. Whether the arbitral award should be set aside and an independent arbitrator appointed.
  4. Whether the applicant is entitled to costs of the application.

Orders

  • The arbitral award is set aside.
  • The parties are at liberty to appoint an arbitrator as per their agreement.
  • If the parties fail to agree on an arbitrator, they may apply to the appointing authority to appoint one in accordance with section 11 of the Arbitration and Conciliation Act.
  • Each party to bear its own costs.

Rules and key headnotes

Arbitration & ADR — Setting Aside Awards — Service of Notice — Service on Counsel
Service of notice of appointment of arbitrator and arbitration proceedings on a party's advocate is proper and effectual under Civil Procedure Rules Order 3 rule 4, which provides that process served on an advocate or left at the advocate's office is presumed to be duly communicated to the party represented and is as effectual as service on the party in person.
Civil Procedure — Mistake of Counsel — Effect on Litigant
The mistake of an advocate, however negligent, cannot be visited upon a litigant. Where counsel fails to respond to properly served notices or to attend proceedings, thereby depriving the client of participation in arbitration, the court may set aside the resulting award notwithstanding that service was technically proper.
Arbitration & ADR — Setting Aside Awards — Justice and Fairness — Section 28(4) of Arbitration and Conciliation Act
Under section 28(4) of the Arbitration and Conciliation Act, an arbitrator must decide the substance of the dispute according to considerations of justice and fairness. An award that fails to meet this standard is not in accordance with the Act and may be set aside under section 34(2)(a)(vii).
Arbitration & ADR — Arbitral Awards — Duplicate Awards — Justice and Fairness
An arbitral award that grants the same sum twice under different labels (decretal sum and special damages) without explanation or justification is contrary to justice and fairness and may be set aside as not being in accordance with the Arbitration and Conciliation Act.
Damages & Quantum — General Damages — Principles of Assessment — Excessive Awards
General damages are awarded to compensate the plaintiff, not to punish the defendant. An award of general damages must place the plaintiff in the same financial position as if the contract had been performed. General damages more than ten times the decretal amount are excessive, punitive, and contrary to established principles of law.
Damages & Quantum — Interest — Interest on General Damages
An award of interest on general damages at 25% per annum without justification or basis is excessive and oppressive, particularly where commercial rate interest has already been awarded on the decretal sum.
Arbitration & ADR — Arbitral Awards — Duty to Give Reasons — Section 31(6) of Arbitration and Conciliation Act
Section 31(6) of the Arbitration and Conciliation Act requires an arbitrator to give reasons for the award made. Failure to provide reasons, particularly where substantial damages are awarded, undermines the legitimacy of the award and constitutes a ground for setting it aside.

Legislation cited (10)

Cases cited (7)

  • Benjino and others v Kamanda [1977] HCB 331
  • Banco Arabe Espanol v Bank of Uganda (SCCA No. 8 of 1998)
  • Yowasi Kabiguruka v Samuel Byarufu C.C.A No. 18 of 200
  • Hajati Safina Nababi v Yafesi Lule (Civil Appeal No. 9 of 1998)
  • CFC Freight Services Ltd v Uganda Property Services Ltd (Miscellaneous Application No. 10 of 2012)
  • Stroms v Hutchinson [1905] AC 515
  • Kituni Construction Company Ltd v Julius Okeny (HCT-00-CC-CS-0250 of 2004)

Full judgment

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

Kampire & Anor v Karangira (HCT-00-CC-MA 532 of 2012) [2013] UGCommC 32 (22 February 2013)
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.