Wakilii

Kirunda Brothers Ltd and Others v Jessica Kirunda Ngobi [2026] UGHCCD 237

High Court · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application in a pending High Court civil suit for a stay of proceedings and reference of the dispute to arbitration under section 5 of the Arbitration and Conciliation Act
Decision
Civil Suit No. HCT-00-CV-CS-0421-2025 struck out and the dispute referred to arbitration

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Holding

The court held that where proceedings concern a matter subject to a valid arbitration agreement and a party invokes section 5 of the Arbitration and Conciliation Act, reference to arbitration is mandatory unless the party resisting proves the agreement is null, void, inoperative or incapable of performance, or that no dispute exists. Clause 5 of the 30 May 2025 agreement, covering "any disputes or questions arising from or in connection with this agreement", was broad enough to embrace the pleaded challenges to a company resolution, distribution of compensation funds, succession entitlement, fraud and management allegations, being connected with the compensation funds and settlement arrangement. A stay serving no practical purpose, the suit was struck out and the dispute referred to arbitration.

Outcome

Civil Suit No. HCT-00-CV-CS-0421-2025 struck out and the dispute referred to arbitration

Facts

Compensation funds were disbursed by the Ministry of Defence and Veteran Affairs to Kirunda & Brothers Ltd, and disputes arose over the entitlement of the estates and beneficiaries of the deceased founder members. By an agreement dated 30 May 2025, executed between Herman Gasuza Bukenya (as donee of a power of attorney from Jessica Kirunda Ngobi) and Kirunda & Brothers Ltd, the parties addressed UGX 8,833,333,333 said to be due to the estate of the late Erukana Kirunda from Government, providing for payment of UGX 1,000,000,000 to Jessica Kirunda Ngobi and the balance of UGX 7,833,333,333 to the administrator pro rata. Clause 5 provided that any disputes or questions arising from or in connection with the agreement be resolved by arbitration under Ugandan law. Article 59 of the company's articles of association also contained an arbitration clause. The respondent nevertheless filed Civil Suit No. HCT-00-CV-CS-0421-2025 challenging a company resolution of 20 June 2023 distributing the compensation proceeds, alleging concealment, fraud, oppression and disputes over shareholding, directorship, management and succession entitlement. She contended that the 4th to 8th applicants and the Attorney General were not parties to any arbitration agreement. The applicants sought a stay and reference to arbitration.

Issues

  1. Whether High Court Civil Suit No. HCT-00-CV-CS-0421-2025 concerns a dispute falling within the parties' arbitration agreement and should be referred to arbitration under section 5 of the Arbitration and Conciliation Act.
  2. Whether the appropriate order, once a dispute is found to fall within an arbitration clause, is a stay of the suit or striking out of the suit.

Orders

  • Pursuant to section 5 of the Arbitration and Conciliation Act (Cap. 5), the dispute between the parties arising out of or in connection with the agreement dated 30 May 2025 concerning Kirunda & Brothers Ltd and the estate of the late Erukana Kirunda is referred to arbitration.
  • High Court Civil Suit No. HCT-00-CV-CS-0421-2025 is struck out.
  • High Court Miscellaneous Appeal No. HCT-00-CV-ML-0003-2026 challenging the Registrar's dismissal of the temporary injunction application is overtaken by events.
  • The costs of this application shall abide the outcome of the arbitration proceedings.

Rules and key headnotes

Arbitration & ADR — Stay of Legal Proceedings — Mandatory Nature of Reference under Section 5 of the Arbitration and Conciliation Act
Where proceedings before the court concern a matter which is the subject of a valid arbitration agreement and a party properly invokes section 5 of the Arbitration and Conciliation Act, the court is bound to give effect to the parties' bargain by referring the dispute to arbitration; the obligation is mandatory though not absolute, and may be displaced only where a statutory exception is established.
Arbitration & ADR — Statutory Exceptions to Reference — Burden of Proof on Party Resisting Arbitration
The burden lies on the party resisting reference to arbitration to demonstrate that the arbitration agreement is null and void, inoperative or incapable of being performed, or that there is in fact no dispute between the parties concerning matters agreed to be referred; absent such proof the court must refer the dispute to arbitration.
Contract Law — Construction of Arbitration Clauses — Scope of the Words "Arising From or In Connection With"
An arbitration clause covering "any disputes or questions arising from or in connection with this agreement" is broad enough to encompass claims pleaded as challenges to a company resolution, distribution of funds, succession entitlement, fraud, oppression, shareholding, directorship and management, in so far as those claims are connected with the subject matter and settlement arrangement embodied in the agreement.
Civil Procedure — Effect of Reference to Arbitration — Striking Out the Suit Rather Than Ordering a Stay
Although section 5 of the Arbitration and Conciliation Act is headed as a provision on stay of legal proceedings, its operative text requires reference of the matter to arbitration; where the statutory conditions are met a mere stay serves no practical purpose and the appropriate course is to strike out the suit so that the merits may be determined by the arbitral tribunal.
Arbitration & ADR — Separability of the Arbitration Clause — Limited Scope of the Court's Inquiry under Section 5
By virtue of section 16 of the Arbitration and Conciliation Act an arbitration clause is separable from the main contract, and challenges to the validity of the main contract do not without more invalidate the arbitration agreement; the court's inquiry under section 5 is confined to whether the arbitration agreement exists and is valid, operative and capable of performance, other disputes touching the contract falling to the arbitral tribunal.
Arbitration & ADR — Limited Court Intervention — Restrictive Character of the Arbitration and Conciliation Act
The Arbitration and Conciliation Act is a restrictive statute intended to limit court intervention in matters governed by arbitration; the court's jurisdiction in arbitration matters is special and limited, and the Act's provisions take precedence over general civil procedure provisions.

Legislation cited (4)

Cases cited (6)

Full judgment

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Kirunda Brothers Ltd and Others v Jessica Kirunda Ngobi [2026] UGHCCD 237 (21 July 2026)
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.