Wakilii

Mss Xsabo Power Limited & 4 Others v Great Lakes Energy Company NV (Arbitration Cause 75 of 2023)

High Court · [2024] UGCOMMC 76 · 2024 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated applications arising from London Court of International Arbitration proceedings: respondent seeking recognition and enforcement of Final Arbitral Award; applicants seeking refusal of recognition and enforcement on public policy and jurisdictional grounds
Decision
Final Arbitral Award of the London Court of International Arbitration recognised and enforceable as a judgment of the High Court of Uganda; interim protective measures lapsed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court allowed recognition and enforcement of the Final Arbitral Award rendered by the London Court of International Arbitration. The Court held that the Tribunal properly exercised jurisdiction over non-arbitrable issues inextricably interwoven with arbitrable ones, that computational omissions did not constitute failures of due process or equal treatment, and that the award of interest pegged to USD 3-month LIBOR remained enforceable despite the transition to synthetic LIBOR. The objections to enforcement on public policy grounds were dismissed.

Outcome

Final Arbitral Award of the London Court of International Arbitration recognised and enforceable as a judgment of the High Court of Uganda; interim protective measures lapsed

Facts

The parties entered into investment and shareholders' agreements for a solar power project in Uganda. The respondent became a shareholder and lender in the project. A dispute arose when the applicants accused the respondent of inflating engineering and construction costs by approximately US$6 million. The applicants rescinded the investment agreement and revoked the respondent's share allotment. The respondent commenced arbitral proceedings at the London Court of International Arbitration. The LCIA Tribunal issued two partial awards and a final award. The first partial award found the respondent liable for secret commission. The final award, delivered on 11 September 2023, ordered the applicants to pay the respondent US$1,188,730 as damages plus interest at US$ 3-month LIBOR plus 8%, legal costs of GBP 1,194,599.83 and USD 165,860.98, and arbitration costs of GBP 208,930.36. The respondent sought recognition and enforcement of the final award in Uganda. The applicants objected on grounds that the award dealt with matters outside the arbitration agreement, violated public policy, and was unenforceable due to the obsolescence of LIBOR.

Issues

  1. Whether the Final Arbitral Award dealt with issues falling outside the scope of the submission to arbitration, specifically regarding availability of funds under Clause 6.3 of the Shareholders' Agreement.
  2. Whether the Final Arbitral Award is in conflict with the law and public policy of Uganda.
  3. Whether the Tribunal's failure to expressly determine the rate, period and quantification of interest on secret commission amounts to a failure to treat parties with equality and/or discrimination.
  4. Whether the Tribunal's failure to expressly quantify interest on secret commission amounts to a failure of due process.
  5. Whether enforcement of the award would result in expropriation of time value of money without compensation, unjust enrichment, or abuse of contractual and legal rights.
  6. Whether the award of interest at US$ 3-month LIBOR plus 8% renders the award uncertain, ambiguous and unenforceable, given the discontinuation of representative LIBOR rates on 30 June 2023.
  7. Whether recognition and enforcement of the Final Arbitral Award should be granted.
  8. Whether interim measures of protection previously granted should be extended.

Orders

  • Arbitration Cause No. 0014 of 2024 dismissed with costs to the respondent.
  • Arbitration Cause No. 0075 of 2023 allowed with costs to Great Lakes Energy Company NV.
  • Leave granted to Great Lakes Energy Company NV to enforce the Final Arbitral Award in the same manner as a judgment or order of the High Court.
  • Costs of the applications to be recovered as part of the costs of execution of the award.
  • Interim measures of protection previously granted lapsed upon delivery of the ruling.
  • Application for extension of interim protective measures dismissed as premature.

Rules and key headnotes

Arbitration — Scope of Submission — Incorporation of Arbitration Clauses — Inextricably Interwoven Issues
A dispute outside the scope of an arbitration agreement will nevertheless be arbitrable if it is inextricably interwoven with arbitrable issues. Where determination of the arbitrable claim may dispose of the non-arbitrable claim, arbitrating both serves the interests of judicial economy and avoids the risk of inconsistent results.
Arbitration — Incorporation of Arbitration Clauses — Express Reference Required
To incorporate an arbitration clause from one contract into another, express reference is required. The reference must be such as to make the arbitration clause part of the agreement. A mere reference to another contract containing an arbitration clause does not automatically incorporate the arbitration clause unless the parties expressly or consciously agreed to do so.
Arbitration — Recognition and Enforcement — New York Convention — Grounds for Refusal — Public Policy Exception
The public policy exception under Article V(2)(b) of the New York Convention must be interpreted narrowly. Public policy relates to the most basic notions of morality and justice, and covers only fundamental principles that are widely recognised and should underlie any system of law. An award warrants refusal of recognition and enforcement only when it contravenes a substantive provision of law or is patently illegal or shocks the conscience of the Court.
Arbitration — Recognition and Enforcement — Equal Treatment — Procedural Fairness — Standard of Review
The guarantee of treating parties with equality extends to the appraisal of evidence and assessment of awards. However, the standard of review is whether a party has been denied fundamentally a fair hearing, not whether the tribunal reached the correct answer. Accounting or arithmetical mistakes do not in themselves render an arbitral award open to challenge unless they show manifestly that the Tribunal failed to conduct proceedings fairly. Mathematical computations and propriety of awards are factual questions on which courts cannot substitute their opinion for that of the Tribunal.
Arbitration — Set-Off — Requirement of Ascertainment
A set-off can be performed only when the other party's obligation is ascertained both as to its existence and as to its amount. The amount to be set-off ordinarily must be quantified first, then by mutual deduction both obligations are discharged up to the amount of the lesser obligation. Where a Tribunal states that an amount has been fully satisfied in its calculation without demonstrating the detailed computation on record, this does not by itself establish a breach of the duty to treat parties with equality, absent proof of a gross and obvious computational error.
Arbitration — Recognition and Enforcement — Uncertainty or Ambiguity — LIBOR Transition
An award is uncertain or ambiguous as to its effect where it is open to multiple interpretations likely to cause substantial injustice in enforcement. However, the Court should construe the award so far as possible to make it valid rather than invalid. An award of interest pegged to US$ 3-month LIBOR is not rendered uncertain or unenforceable by the transition from representative LIBOR to synthetic LIBOR after 30 June 2023, as synthetic LIBOR continues to be published and is deemed to apply to legacy contracts with no ability to be renegotiated.
Civil Procedure — Interim Measures — Post-Award Measures — Scope of Court Jurisdiction
Under section 6 of the Arbitration and Conciliation Act, the Court's jurisdiction to grant interim measures of protection is limited to situations before or during arbitral proceedings. There is no provision permitting the Court to grant post-arbitration interim measures of protection. Following an order granting leave to enforce an arbitral award, reliefs to prevent dissipation of assets can only be obtained in accordance with post-judgment procedures under the Civil Procedure Act and Rules.

Legislation cited (24)

Cases cited (30)

  • Premium Nafta Products Ltd v Fili Shipping Co Ltd [2008] 1 Lloyd's Rep 619
  • Fiona Trust & Holding Corp v Privalov [2007] UKHL 40
  • Walter Llewellyn & Sons Ltd v Excel Brickwork Ltd [2010] EWHC 3415 (TCC)
  • Barrier Ltd v Redhall Marine Ltd [2016] EWHC 381 (QB)
  • Sea Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd [2006] EWHC 2530 (Comm)
  • Sea Trade Maritime Corp v Hellenic Mutual War Risk Association (Bermuda) Ltd (The Athena) (No 2) [2007] 1 Lloyd's Rep 280
  • Cohen v. Ark Asset Holdings, 268 A.D.2d 285, 286 (1st Dept. 2000)
  • Lake Harbor Advisors, LLC v. Settlement Servs. Arbitration and Mediation, Inc., 175 A.D.3d 479 (2d Dept. 2019)
  • Monotube Pile Corp. v. Pile Foundation Constr. Corp., 269 A.D.2d 531 (2d Dept. 2000)
  • Protostorm, Inc. v. Foley & Lardner LLP, 193 AD3d 486 (1st Dept 2021)
  • CIZ v CJA [2021] SGHC 178
  • TMM Division Maritama SA de CV v Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972
  • Regazzoni v Sethia [1958] AC 301
  • Christ for All Nationals v Apollo Insurance Co Ltd [2002] 2 EA 366
  • Sinocore International Co Ltd v RBRG Trading (UK) Ltd [2018] 2 Lloyd's Rep 133
  • Parsons and Whittemore Overseas Co., Inc. v. Société générale de l'industrie du papier (RAKTA). 508 F. 2d 969 (2d Cir. 1974)
  • Gol Linhas Aereas SA v Matlin Patterson Global Opportunities Partners (Cayman) [2022] UKPC 21
  • Saahib Enterprises Ltd v Olam Uganda Ltd (High Court Civil Suit No. 180 of 2009)
  • Ducat Maritime Ltd v Lavender Shipmanagement Inc [2022] EWHC 766 (Comm)
  • Franek Jan Sodzawiczny v Simon John Mcnally [2021] EWHC 3384 (Comm)
  • Moran v Lloyd's [1983] QB 542
  • Xstrata Coal Queensland P Ltd v Benxi Iron & Steel (Group) International Economic & Trading Co Ltd [2020] EWHC 324 (Comm)
  • Alegrow SA v Yayla Argo Gida San ve Nak AS [2020] EWHC 1845 (Comm)
  • MRI Trading AG v Erdenet Mining Corporation LLC [2013] 1 Lloyd's Rep 638
  • Richardson v. Mellish, 130 Eng. Rep. 294, 303 (Ex. 1824)
  • Janson v Driefontein Consolidated Mines [1902] AC 484
  • Fender v St John-Mildmay [1938] AC 1
  • Libyan American Oil Company (LIAMCO) v. Socialist People's Libyan Arab Republic Jamahirya, (formerly Libyan Arab Republic), (1981) 20 ILM 1
  • Egerton v Earl of Brownlow (1853) 10 ER 359
  • Cooke v Turner (1845) 60 Eng Rep 449

Full judgment

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Mss Xsabo Power Limited & 4 Others v Great Lakes Energy Company NV (Arbitration Cause 75 of 2023) [2024] UGCommC 76 (18 April 2024)
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.