Wakilii

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

High Court · [1992] UGHC 28 · 1992 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitration award under Arbitration Rules (S.I. 55-1), Rules 7 and 16
Decision
Application to set aside arbitration award dismissed; arbitration award upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed the application to set aside the arbitration award. The court held that the arbitrator did not misconduct himself; he properly considered both Fee Note No. 1 (provisional) and its replacement, Fee Note No. 1A, which was submitted before his appointment. The applicant waived formalities by continuing to deal with the respondent on the project despite absence of strict written compliance. The arbitrator had jurisdiction to award costs under Rule 9 of the First Schedule to the Arbitration Act.

Outcome

Application to set aside arbitration award dismissed; arbitration award upheld

Facts

The applicant, National Insurance Corporation, engaged the respondent, Arconsults Architects, to design residential developments on two sites (Bukoto and Muyenga Projects). After preliminary verbal and written contacts in 1987-1988, the respondent was formally appointed on 10 May 1988. The respondent submitted provisional Fee Note No. 1 for Shs. 27,815,233 on 19 May 1989 for work on the Bukoto Project. The applicant did not pay and continued to engage the respondent on the project. On 1 August 1990, the respondent submitted Fee Note No. 1A for Shs. 55,641,867, superseding the provisional note. The parties submitted their fee dispute to arbitration in September 1990. The arbitrator, appointed on 24 April 1991, awarded the respondent Shs. 55,641,867 plus legal costs and ordered the applicant to pay arbitration fees. The applicant sought to set aside the award on five grounds, primarily arguing that the arbitrator exceeded his appointment by considering Fee Note No. 1A and misdirected himself on facts and law.

Issues

  1. Whether the arbitrator misdirected himself in awarding fees based on allegedly wrong facts.
  2. Whether the arbitrator wrongly directed the applicant to pay arbitration fees when the appointment letter provided for payment by both parties equally.
  3. Whether the arbitrator failed to address the requirement of written authority under the Conditions of Engagement and Scale of Professional Fees for Architects.
  4. Whether the arbitrator acted outside the scope of his appointment letter by considering Fee Note No. 1A in addition to Fee Note No. 1.
  5. Whether Fee Note No. 2 was justified under the applicable conditions.
  6. Whether the arbitration award should be set aside under Section 12 of the Arbitration Act.

Orders

  • Application dismissed.
  • Applicant to pay the costs of the application to the respondent.

Rules and key headnotes

Arbitration — Setting Aside Award — Grounds — Misconduct and Improper Procurement
Under Section 12 of the Arbitration Act, a court may set aside an arbitration award only where the arbitrator has misconducted himself or the award has been improperly procured. Parties who choose arbitration as their tribunal should not have the right to set aside the award save for very good reason, such as misconduct, improper procurement, or an error of law apparent on the face of the record.
Arbitration — Scope of Reference — Determination at Time of Appointment
Under a common law reference to arbitration, the scope of the dispute is ascertained up to the moment the arbitrator is actually nominated. Where a provisional fee note is substituted by a revised fee note before the arbitrator's appointment, the arbitrator acts within jurisdiction in considering the revised note as part of the dispute.
Contract — Formation — Waiver of Formalities
Where parties to a contract initially fail to comply with formal requirements, such as written acceptance of fee proposals, subsequent conduct by the parties in continuing to deal with each other on the subject matter of the contract amounts to a waiver of those formalities and estops a party from requiring strict compliance belatedly.
Arbitration — Costs — Arbitrator's Powers
Rule 9 of the First Schedule to the Arbitration Act empowers an arbitrator to award costs of the reference and the award, including costs as between advocate and client. An arbitrator's award of legal costs to the successful party is lawful and within the arbitrator's discretion.
Arbitration — Jurisdiction — Absence of Written Agreement or Submission
A parol (oral) submission to arbitration is sufficient to confer jurisdiction on an arbitrator. Where parties do not contest the arbitrator's jurisdiction and both participate in the arbitration, the dispute is properly before the arbitrator despite the absence of a written agreement or formal statutory submission.

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) Rule 7
  • Arbitration Rules (S.I. 55-1) Rule 16
  • Arbitration Act First Schedule Rule 8
  • Arbitration Act First Schedule Rule 9
  • Arbitration Act Second Schedule Forms I and II

Cases cited (5)

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

Full judgment

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

National Insurance Corporation v Arconsults Architects (Arbitration Cause 4 of 1991) [1992] UGHC 28 (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.