Wakilii

Mwesigye v ICEA General Insurance Company Limited (Civil Suit 115 of 2018)

High Court · [2024] UGCOMMC 140 · 2024 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection challenging court jurisdiction based on arbitration clause in insurance contract
Decision
Preliminary objection dismissed; matter to proceed to trial in High Court

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Court overruled preliminary objection seeking referral to arbitration. Held that although the insurance contract contained a valid arbitration clause, the defendant's six-year participation in court proceedings—including filing defences, responding to interlocutory applications, entering partial consent, and preparing for trial—constituted both waiver of arbitration rights and rendered the arbitration agreement inoperative under section 5(1)(a) of the Arbitration and Conciliation Act. Defendant estopped from raising arbitration objection at trial stage after electing to litigate.

Outcome

Preliminary objection dismissed; matter to proceed to trial in High Court

Facts

On 27 November 2017, plaintiff insured two Sino trucks with defendant under a comprehensive motor insurance policy for one year. Premium of UGX 40,701,235 was financed through Equity Bank and paid to defendant. On 14 December 2017, the trucks were involved in an accident at Kikongo Rugendabara along Kasese-Fort Portal road, reported to police and to defendant. Defendant assessed damage but did not compensate plaintiff. Plaintiff filed suit on 24 August 2021 claiming breach of contract, seeking specific performance or payment of special damages of UGX 197,157,435 plus general damages. Insurance policy contained arbitration clause requiring disputes to be resolved through arbitration. After filing in 2018, defendant filed defence and amended defence in 2024, participated in mediation resulting in partial consent order for repair of one vehicle, responded to multiple interlocutory applications, and prepared joint scheduling memorandum in March 2024. In March 2024, defendant raised preliminary objection that dispute should be referred to arbitration per Clause 10 of insurance policy.

Issues

  1. Whether the dispute in Civil Suit No. 115 of 2018 should be referred to arbitration.
  2. What remedies are available to the parties.

Orders

  • Preliminary objection overruled.
  • Parties directed to file and serve remaining pre-trial documents not later than 28th June 2024.
  • No order as to costs.

Rules and key headnotes

Arbitration & ADR — Referral to Arbitration — Waiver of Right to Arbitrate — Conduct Constituting Waiver
A party waives its right to invoke an arbitration agreement where it actively participates in court proceedings over an extended period, including filing and amending pleadings, responding to interlocutory applications, entering partial consent orders, and preparing pre-trial documents, demonstrating voluntary relinquishment of the right to arbitrate.
Arbitration & ADR — Arbitration Agreement — Inoperative Arbitration Agreement — Section 5(1)(a) Arbitration and Conciliation Act
An arbitration agreement becomes inoperative under section 5(1)(a) of the Arbitration and Conciliation Act where parties have implicitly or explicitly revoked the agreement to arbitrate through their conduct, such as prolonged participation in litigation including filing defences, consenting to orders, and preparing for trial over multiple years.
Civil Procedure — Estoppel — Conduct Estoppel — Inconsistent Positions in Litigation
A defendant who participates in an application to reinstate a dismissed suit and have it heard on merits, without raising objection to court jurisdiction based on arbitration, is estopped from subsequently raising such objection at trial stage, as it contradicts the position previously adopted.
Arbitration & ADR — Preliminary Objection — Timing of Objection — Delay in Raising Arbitration Clause
Raising an arbitration objection at trial stage, after six years of active participation in court proceedings, constitutes undue delay and demonstrates abandonment of the right to arbitrate, particularly where the defendant should have immediately applied for referral to arbitration once pleadings closed.
Contract Law — Insurance Contracts — Arbitration Clauses — Waiver Through Litigation Conduct
The presence of a valid and enforceable arbitration clause in an insurance contract does not automatically oust court jurisdiction where the insurer has conducted itself in a manner demonstrating election to litigate rather than arbitrate, including entering partial consent orders and actively participating in multiple applications over several years.

Legislation cited (4)

Cases cited (11)

  • ATC Uganda Ltd v Smile Communications Uganda Ltd (Miscellaneous Application No. 621 of 2023)
  • Delaware International Agricultural Enterprises Ltd v MUA Insurance (U) Ltd & AG-Ploutos Company Ltd (Civil Suit No. 524 of 2021)
  • Kasibante Moses v Katongole Singh Marwaha & Property Consultants (Civil Revision No. 4 of 2018)
  • Vantage Mezzanine Fund II Partnership v Simba Properties Investments Co. Ltd and Anor (Miscellaneous Application No. 201 of 2020)
  • Agri-Industrial Management Agency Ltd v Kayonza Growers Tea Factory Ltd & Anor (Civil Suit No. 819 of 2004)
  • National Social Security Fund v Alcon International Ltd (Civil Appeal No. 2 of 2008)
  • James Simon Mpanga & Anor v Marvin Paul Sebugwawo & 2 Ors (Civil Suit No. 436 of 2016)
  • AC Yafeng Construction Co. Ltd v Living World Assembly Ltd & 2 Ors (Civil Suit No. 739 of 2021)
  • Broken Hill City Council vs. Unique Urban Built Pty Ltd [2018] NSWSC 825
  • Leeds Insurance Ltd vs. Insurance Regulatory Authority of Uganda & Kissule Astacio & Sons Ltd
  • Select Garments Ltd v Old Stanley Hotel Ltd (Civil Suit No. 674 of 2014)

Full judgment

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

Mwesigye v ICEA General Insurance Company Limited (Civil Suit 115 of 2018) [2024] UGCommC 140 (2 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.