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Multiplex Limited v Ditaco Uluslararasi Ticaret ve Muteahhit Lik Limited Sirketi (Misc Cause 78 of 2022)

High Court · [2023] UGHCCD 155 · 2023 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim measure of protection under the Arbitration and Conciliation Act pending arbitration proceedings
Decision
Interim measure of protection granted restraining respondent from terminating joint venture agreements and communicating with third parties pending arbitration

Observed later treatment

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Holding

The High Court held that a party to an arbitration agreement has a right under section 6(1) of the Arbitration and Conciliation Act to seek interim measures of protection from the court before or during arbitral proceedings. The court granted the interim measure restraining the respondent from terminating the joint venture agreements and from communicating with third parties in a manner that would jeopardise the ongoing road construction projects, finding that the applicant demonstrated a prima facie case, would suffer irreparable injury including potential blacklisting by the World Bank and PPDA, and that the balance of convenience favoured the applicant who had solely financed the project implementation.

Outcome

Interim measure of protection granted restraining respondent from terminating joint venture agreements and communicating with third parties pending arbitration

Facts

The applicant and respondent executed joint venture agreements dated 30th October 2020 and 18th November 2020 for submission of bids and execution of road construction contracts in Mbarara City, Ntungamo Municipality and Kabale Municipality. The applicant solely financed bid security, performance guarantees, advance payment guarantees and equipment acquisition valued at UGX 31,698,228,880, incurred arrangement costs of UGX 261,148,394, and mobilised construction equipment valued at UGX 34,856,200,800. Differences arose between the parties regarding interpretation of the joint venture agreement. The applicant referred the dispute to the Centre for Arbitration and Dispute Resolution on 12th January 2022. Notwithstanding the pending arbitration, the respondent wrote communications to Mbarara City, Ntungamo Municipal Council and Kabale Municipal Council threatening termination of the contracts, and sent a termination letter dated 1st April 2022. The respondent also attempted to halt the applicant's operation of joint venture accounts at Guaranty Trust Bank and United Bank of Africa.

Issues

  1. Whether the applicant has a right to seek an interim measure of protection under section 6(1) of the Arbitration and Conciliation Act Cap. 4 from the High Court.
  2. What remedies are available to the parties.

Orders

  • Application granted.
  • The respondent, its servants, agents, authorised counsel and/or any third parties are restrained from terminating the existing and ongoing joint venture internal agreement dated 18th November 2020 and/or the joint venture agreement dated 30th October 2020 executed between the applicant and the respondent pertaining to the execution and/or performance of road construction until the hearing and determination of the arbitration between the parties.
  • The respondent is restrained from issuing termination notices and/or any other correspondences/communications that may jeopardise and/or lead to the termination of the project to Mbarara City, Ntungamo Municipality, Kabale Municipality, Ministry of Lands Housing and Urban Development, Guaranty Trust Bank (Uganda) Limited, United Bank of Africa, Uganda Support to Municipal Infrastructure Development Program (USMID), World Bank and/or any other body/authority/institution in Uganda until the hearing and determination of the arbitration between the applicant and the respondent.
  • Costs shall be in the cause.

Rules and key headnotes

Arbitration & ADR — Interim Measures — Right to Seek Court Protection Under Section 6(1) of Arbitration and Conciliation Act
A party to an arbitration agreement has a right under section 6(1) of the Arbitration and Conciliation Act Cap. 4 to apply to the court before or during arbitral proceedings for an interim measure of protection, and the court has discretionary power to grant that measure.
Arbitration & ADR — Interim Measures — Scope and Meaning of 'Interim Measure of Protection'
The phrase 'interim measure of protection' under section 6(1) of the Arbitration and Conciliation Act is wider than the word 'injunction' and should be taken to mean any lawful order that may be made in the interim to protect a party to an arbitration agreement pending arbitration proceedings, including interim temporary injunctions, attachment before arbitration, and deposit of security.
Arbitration & ADR — Court Interference — Limited Scope Under Section 9 of Arbitration and Conciliation Act
Section 9 of the Arbitration and Conciliation Act limits interference by the court in matters governed by the Act except as enabled by it. Principles applied by courts in the grant of temporary injunctions should be sparingly applied to enable the arbitral tribunal to exercise its jurisdiction without being restricted by a court order.
Civil Procedure — Interlocutory Injunctions — Test for Grant of Interim Measure of Protection
The principles governing the grant of interim measures of protection in arbitration matters are similar to those for temporary injunctions. The applicant must show a prima facie case with probability of success, that irreparable injury will be suffered which cannot adequately be compensated in damages, and if the court is in doubt, the balance of convenience must favour the applicant.
Civil Procedure — Interlocutory Injunctions — Irreparable Injury — Meaning and Application
Irreparable injury does not mean that there must be physical impossibility of repairing the injury, but that the injury or damage must be substantial or material, that is, one that cannot be adequately atoned for in damages. Injury to reputation, blacklisting by international bodies such as the World Bank and PPDA, and loss of public interest benefits constitute irreparable injury.
Contract Law — Joint Venture Agreements — Breach and Threatened Breach — Protection of Performing Party
Where one party to a joint venture agreement has solely financed and implemented the project while the other party threatens termination in breach of the agreement, the court will grant interim protection to preserve the status quo and prevent the arbitral proceedings from being rendered nugatory, particularly where the performing party faces exposure to substantial financial liabilities and reputational damage.

Legislation cited (4)

Cases cited (8)

  • Titus Tayebwa v Fred Bogere and Another (Civil Appeal No. 3 of 2009)
  • National Social Security Fund and Another v Alcon International Ltd (Civil Appeal No. 2 of 2008)
  • Victor Construction Works Ltd v UNRA (HMA No. 601 of 2010)
  • Giella v Cassman Brown & Co [1973] EA 358
  • Kiyimba Kaggwa v Hajji A.N. Katende [1985] HCB 43
  • John Sekaziga and Another v Church Commissioners Holding (Misc Cause No. 15 of 2013)
  • International Investment House Company LLC and Emirates Africa Link for Strategic Alliance (LLC) v Amos Nzeyi and Others (Misc Cause No. 11 of 2012)
  • Guangdong Hao He Engineering & Construction Company (U) Ltd v Britam Insurance Co (U) Ltd and Another (Misc Cause No. 37 of 2020)

Full judgment

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

Multiplex Limited v Ditaco Uluslararasi Ticaret ve Muteahhit Lik Limited Sirketi (Misc Cause 78 of 2022) [2023] UGHCCD 155 (31 May 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.