Wakilii

Mujuni Lincoln v Transafrica Insurance Company Limited (Civil Suit 16 of 2013)

High Court · [2017] UGCOMMC 255 · 2017 Matter Remitted to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil suit at first instance with defendant raising preliminary objection on jurisdiction based on arbitration clause
Decision
Matter referred to arbitration in accordance with arbitration clause in insurance policy

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that where parties have freely agreed to an arbitration clause in an insurance policy, the court must refer the matter to arbitration under section 5 of the Arbitration and Conciliation Act. The plaintiff's argument that the arbitration clause related to a different policy number was rejected as the plaintiff relied on the same policy document to claim remedies. In the absence of exceptions under section 5(1)(a) or (b), the matter was referred back for arbitration proceedings.

Outcome

Matter referred to arbitration in accordance with arbitration clause in insurance policy

Facts

The plaintiff took out a private car insurance policy with the defendant insurance company under policy number TAC/CMP/P735/L409. A dispute arose between the parties regarding a claim under the policy. The plaintiff filed a civil suit in the High Court Commercial Division. Default judgment was initially entered against the defendant but was later set aside. The matter was sent for mediation which failed. The Insurance Regulatory Authority investigated and directed the defendant to pay the plaintiff's claim, but payment was not made. The defendant then raised a preliminary objection to the court's jurisdiction on the basis that the insurance policy contained an arbitration clause requiring disputes to be referred to arbitration. The plaintiff argued that the arbitration clause referenced a different policy number (TAC/CMP/P3M/07/2009) and was therefore null and void, inoperative, or incapable of being performed as against him.

Issues

  1. Whether the High Court has jurisdiction to entertain a civil suit where the insurance policy contains an arbitration clause requiring parties to submit disputes to arbitration.

Orders

  • Matter referred back for arbitration proceedings to commence under the Arbitration and Conciliation Act.
  • Costs to abide the cause.

Rules and key headnotes

Arbitration Clauses — Effect on Court Jurisdiction
Where parties have freely submitted to an arbitration agreement in an insurance contract, the court must refer the matter to arbitration under section 5 of the Arbitration and Conciliation Act unless the arbitration agreement is null and void, inoperative, or incapable of being performed, or there is no dispute between the parties.
Arbitration Clauses — Binding Effect
An arbitration clause in a contract is binding on the parties and has an enduring and special effect, continuing in force unless there is solid reason for repudiation.
Insurance Contracts — Arbitration Clauses — Construction
Where a party relies on a policy document to seek remedies from court and does not plead in its statement of case that the arbitration clause in that policy is defective or inapplicable, it cannot later argue that the clause relates to a different policy merely because of a discrepancy in policy numbers.
Stay of Legal Proceedings — Mandatory Language
Section 5 of the Arbitration and Conciliation Act employs mandatory language and requires a judge to refer a matter to arbitration where a party so applies after filing a written statement of defence, unless the arbitration agreement is null and void, inoperative, or incapable of being performed, or there is no dispute.

Legislation cited (10)

Cases cited (5)

  • Yan Jian (U) Company Limited v Siwa Builders and Engineers (Miscellaneous Application No. 1747 of 2014)
  • Power & City Contractors Ltd v LTL Project (Pvt) Ltd (HCMA No. 0062 of 2011)
  • David Kayondo v Cooperative Bank Limited (Supreme Court Civil Appeal No. 19 of 1997)
  • Commissioner General, Uganda Revenue Authority v Meera Investments Limited (Supreme Court Civil Appeal No. 22 of 2007)
  • National Social Security Fund & W.H. Ssentongo T/A Ssentongo & Partners v Alcon International Ltd (Court of Appeal No. 02 of 2008)

Full judgment

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

Mujuni Lincoln v Transafrica Insurance Company Limited (Civil Suit 16 of 2013) [2017] UGCommC 255 (23 January 2017)
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.