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KPI Health Care Limited v Unipharma Limited & Another (Miscellaneous Application 1328 of 2022)

High Court · [2023] UGCOMMC 229 · 2023 Application Granted — Matter Referred to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to refer dispute to arbitration arising from civil suit for breach of contract
Decision
Matter referred to arbitration; underlying civil suit lapsed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where parties have freely agreed to an arbitration clause, the court has a duty to enforce it. A dispute existed regarding whether goods supplied met contractual quality requirements, as the respondents claimed payment while the applicant contested quality. The matter was referred to arbitration and the civil suit lapsed.

Outcome

Matter referred to arbitration; underlying civil suit lapsed

Facts

The respondents filed a civil suit claiming USD 43,555 as outstanding balance for the supply of SUPAVITAM under a Contract Manufacture Agreement dated 31 March 2018. The applicant defended on grounds that the SUPAVITAM supplied did not contain components as stated on its label and certificate of analysis, and therefore could not be sold. The applicant brought an application drawing the court's attention to clause 17 of the Contract Manufacture Agreement which contained an arbitration clause. The respondents argued there was no dispute to refer to arbitration, that the goods met regulatory requirements as evidenced by importation certificates, and that quality issues should have been raised within 21 days.

Issues

  1. Whether the dispute between the parties should be referred to arbitration in accordance with the arbitration clause in their contract.
  2. Whether a dispute existed between the parties for purposes of invoking the arbitration clause.

Orders

  • The matter is referred for arbitration proceedings.
  • Civil Suit 701 of 2022 lapses as the entire dispute is referred for resolution through arbitration.
  • Costs occasioned by commencing the suit in court shall be determined by the arbitral tribunal.
  • The file shall be closed.

Rules and key headnotes

Arbitration Clauses — Duty of Court to Enforce
Where parties have freely agreed to an arbitration clause in their contract, it is the duty of the court to enforce that clause and refer the dispute to arbitration.
Existence of Dispute — Reference to Arbitration
A dispute exists for purposes of invoking an arbitration clause where one party claims payment under a contract and the other party contests the quality of goods supplied and whether payment is due.
Effect of Referral to Arbitration on Pending Suit
Where a matter is referred to arbitration in accordance with an arbitration clause, the entire dispute is referred for resolution through arbitration and the civil suit lapses, returning to court only for appellate or supervisory interventions as provided under the Arbitration and Conciliation Act.
Costs — Determination by Arbitral Tribunal
Where a suit is commenced in court but the dispute is subsequently referred to arbitration, costs occasioned by commencing the suit in court may be referred to the arbitral tribunal for determination.

Legislation cited (2)

Cases cited (4)

  • Printing & Numerical Registering Company v Sampson (1875) 19 Eq 462
  • Stockloser v Johnson [1954] 1 All ER 640
  • British American Tobacco Uganda Ltd v Lira Tobacco Stores (Miscellaneous Application No. 310 of 2013)
  • Daniel Delestre and Others v Hits Telecom (Miscellaneous Application No. 310 of 2013)

Full judgment

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

KPI Health Care Limited v Unipharma Limited & Another (Miscellaneous Application 1328 of 2022) [2023] UGCommC 229 (21 February 2023)
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.