Wakilii

National Insurance Corporation v Arconsults Architects (Arbitration Cause 4 of 1991)

High Court · [1992] UGHC 96 · 1992 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application under Rules 7 and 16 of the Arbitration Rules to set aside arbitration award
Decision
Application to set aside arbitration award dismissed; arbitration award stands

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the arbitrator did not misconduct himself or improperly procure the award. The parties conducted their relationship informally and the applicant waived formal requirements by its subsequent conduct. The arbitrator's consideration of Fee Note 1A was proper as it substituted the provisional Fee Note 1 before his appointment. An arbitrator has discretion under the Arbitration Act to award costs. Application dismissed.

Outcome

Application to set aside arbitration award dismissed; arbitration award stands

Facts

National Insurance Corporation engaged Arconsults Architects verbally and by letter dated 10 May 1988 to carry out architectural work on two housing projects: Bukoto and Muyenga. The respondent submitted provisional Fee Note 1 for Shs 27,815,233 on 19 May 1989. Work continued and supporting consultants were appointed for the Bukoto project. On 1 August 1990, the respondent submitted revised Fee Note 1A for Shs 55,641,867 based on updated estimates. When the fees remained unpaid and disagreement arose, the parties submitted the dispute to arbitration. On 24 April 1991, the Uganda Society of Architects appointed an arbitrator. On 13 September 1991, the arbitrator awarded the respondent Shs 55,641,867 plus costs. The applicant then applied to set aside the award on five grounds, primarily alleging misdirection and that the arbitrator exceeded his mandate.

Issues

  1. Whether the arbitrator misdirected himself in awarding fees to the respondent based on allegedly wrong facts relating to a meeting of 15 August 1989.
  2. Whether the arbitrator wrongly directed the applicant to pay the arbitrator's fees when the appointing letter provided that both parties would share the cost equally.
  3. Whether the arbitrator misdirected himself by failing to require written authority for the respondent's engagement under the Conditions of Engagement and Scale of Professional Fees for Architects.
  4. Whether the arbitrator acted outside his letter of appointment by considering Fee Note 1A when the appointment referred only to Fee Note 1.
  5. Whether Fee Note 2 complied with the Conditions of Engagement for architects.

Orders

  • Application dismissed.
  • Costs of the application awarded to the respondent.

Rules and key headnotes

Setting aside arbitration awards — misconduct or improper procurement
Under Section 12 of the Arbitration Act, the court has discretionary power to set aside an arbitration award where the arbitrator has misconducted himself or where the award has been improperly procured. The grounds for interference are limited and parties who choose arbitration must accept the tribunal's decision save for very good reasons.
Scope of arbitrator's jurisdiction — definition of dispute at hearing
Where the appointing letter is not explicit about the nature of the dispute between the parties, the arbitrator may properly define the disputes when hearing evidence, and parties may raise relevant matters of contention at the hearing. Parol submission is sufficient for arbitration.
Waiver of contractual formalities — subsequent conduct
Where parties conduct their relationship informally and do not insist on contractual formalities at the time of performance, a party's subsequent dealings and acceptance of services amounts to waiver of the requirement for formal written acceptance. That party is estopped from requiring such formalities belatedly.
Scope of reference — substituted claims before appointment
Where a provisional fee note is submitted and later substituted by a revised fee note before the arbitrator is appointed, the substituted fee note forms part of the dispute properly before the arbitrator, notwithstanding that the appointing letter referred only to the original provisional note.
Award of costs — arbitrator's discretion
Under Rule 9 of the First Schedule to the Arbitration Act, the costs of the reference and award are in the discretion of the arbitrator, who may direct to and by whom and in what manner those costs shall be paid, and may award costs as between advocate and client.

Legislation cited (9)

  • Arbitration Act s.2
  • Arbitration Act s.5
  • Arbitration Act s.12
  • Arbitration Act s.16
  • Arbitration Rules (S.I.55-1) r.7
  • Arbitration Rules (S.I.55-1) r.16
  • Arbitration Act First Schedule r.8
  • Arbitration Act First Schedule r.9
  • Arbitration Act Second Schedule

Cases cited (5)

  • Rashid Moledina v Hoima Ginners [1967] EA 645
  • Virji and Others v Sood [1974] EA 399
  • Tame v Zagoritis [1960] EA 370
  • Sohan Lal v EA Builders Merchants [1951] 18 EACA 50
  • Champsey v Juvraj Ballo [1927] AC 480

Full judgment

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National Insurance Corporation v Arconsults Architects (Arbitration Cause 4 of 1991) [1992] UGHC 96 (27 April 1992)
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.