Wakilii

Newplan Limited v Mercantile Properties Limited (Consolidated Miscellaneous Cause No. 125 of 2024)

High Court · [2025] UGCOMMC 416 · 2025 Applications Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated applications arising from arbitration proceedings — one seeking to set aside an arbitral award, the other seeking to enforce it
Decision
Both applications dismissed; arbitral award recognized and leave granted for enforcement

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed both the application to set aside an arbitral award and the application to enforce it. The court held that the application to set aside was filed within the statutory one-month timeline. The court found no grounds to set aside the award: the arbitrator properly extended time for delivery through procedural orders to which the applicant consented without objection, and the award of 10% interest on rental arrears in USD was a proper exercise of discretion under Section 26(2) of the Civil Procedure Act and not contrary to public policy. The arbitral award was recognized and leave granted for enforcement.

Outcome

Both applications dismissed; arbitral award recognized and leave granted for enforcement

Facts

In 2020, Newplan Limited and Mercantile Properties Limited executed tenancy agreements containing arbitration clauses. A dispute arose and the parties jointly appointed Hon. Justice (RTD) Bart M. Katureebe as arbitrator on 28 March 2024. He received notice of appointment on 23 April 2024. The arbitrator conducted proceedings through a series of procedural orders, extending timelines with the parties' consent. An interim award was delivered on 25 July 2024 and the final award on 30 October 2024, awarding Mercantile Properties rental arrears with 10% interest per annum. Newplan filed Miscellaneous Cause No. 125 of 2024 on 29 November 2024 seeking to set aside the award on grounds that it was delivered beyond the statutory two-month period and that the interest rate was harsh and contrary to public policy. Mercantile Properties filed Arbitration Cause No. 44 of 2024 and Miscellaneous Application No. 2690 of 2024 on 18 December 2024 seeking to enforce the award on grounds that Newplan had not filed to set it aside within the statutory timeline.

Issues

  1. Whether Newplan Limited filed the application to set aside the arbitral award vide PCCL/ARB/01/2024 out of time?
  2. Whether Miscellaneous Cause No. 125 of 2024 is competently before this Court?
  3. Whether there are sufficient grounds that warrant the setting aside of the arbitral award in PCCL/ARB/01/2024?
  4. What remedies are available to the parties?

Orders

  • Miscellaneous Application No. 2690 of 2024 is hereby dismissed.
  • Miscellaneous Cause No. 125 of 2024 is hereby dismissed.
  • The arbitral award in PCCL/ARB/01/2024 dated 30th October, 2024, delivered by Hon. Justice (RTD) Bart M. Katureebe, CJ Emeritus, is hereby recognized.
  • Leave is hereby granted for the enforcement of the arbitral award in PCCL/ARB/01/2024.
  • Each party shall bear its costs of the applications.

Rules and key headnotes

Setting Aside Awards — Statutory Timeline — Section 34(3) Arbitration and Conciliation Act
An application to set aside an arbitral award must be made within one month from the date on which the party making the application received the award, as provided by Section 34(3) of the Arbitration and Conciliation Act.
Time for Making Award — Extension of Time — Section 31(1) Arbitration and Conciliation Act
The two-month period prescribed by Section 31(1) of the Arbitration and Conciliation Act for making an arbitral award is not an immutable rule and may be extended by the arbitrator by notice in writing to the parties. Delay in delivering an award does not per se constitute a ground for setting aside the award under Section 34(2) unless the party complaining shows that the delay caused substantial injustice or that the award suffered patent illegality on account of the delay.
Procedural Fairness — Waiver by Participation — Objections to Procedure
Where an arbitrator extends time for making an award through procedural orders and a party participates in the arbitration proceedings without objection, confirming availability for the delivery date, that party cannot subsequently seek to set aside the award on grounds of delay that it failed to raise during the proceedings.
Public Policy — Narrow Interpretation — Section 34(2)(b)(ii) Arbitration and Conciliation Act
An arbitral award may be set aside on grounds of inconsistency with public policy only if it is shown that the award is inconsistent with the Constitution or other laws of Uganda, is inimical to the national interest, or is contrary to justice and morality. The public policy exception must be interpreted narrowly and is limited to imperative or mandatory rules from which parties cannot derogate, lest it be used opportunistically by award debtors as a gateway to review the merits of the award.
Award of Interest — Arbitrator's Discretion — Section 26(2) Civil Procedure Act
The authority to award interest is an inherent element of a tribunal's adjudicatory authority and is implicitly contained within the terms of agreements to arbitrate absent contrary indication by the parties. The decision to award interest and the applicable rate are within the discretion of the arbitrator under Section 26(2) of the Civil Procedure Act, and the award of interest is an exercise of discretion rather than a predicate of mandatory provisions linked to public policy.
Interest Rates — USD Denominated Awards — Reasonableness
The ultimate focus of the court in determining whether an interest rate awarded on a USD-denominated sum is reasonable and enforceable is whether the resultant interest is harsh and unconscionable in the circumstances of the case, not whether the rate falls within single or double digits. A 10% per annum interest rate on rental arrears in USD is not per se harsh or unconscionable where the arbitrator properly exercised discretion applying relevant law and considering the nature of the rental business relationship.
Scope of Review — Court Not Appellate Body — Autonomy of Parties
In considering matters arising from arbitration, the court is cognizant of the autonomy of the parties. A court adjudicating upon the validity of an arbitral award is not to function as an appellate court but merely to decide upon the legality and validity of the award. The court cannot review the merits of the tribunal's decision and will not interfere unless the reasons given by the arbitrator are found to be perverse or based on wrong propositions of law.

Legislation cited (11)

Cases cited (12)

  • Oriental Insurance Brokers Limited v Transocean (U) Limited (Supreme Court Civil Appeal No. 55 of 1995)
  • Mandela Auto Spares Limited v Barker Barton Lawson (High Court Miscellaneous Cause No. 47 of 2021)
  • Attorney General v Dr. Maj. (Rtd) Anthony Jallon Okullo (Court of Appeal Civil Appeal No. 207 of 2016)
  • Uganda Development Corporation v Rocktrust Contractors Limited (High Court Miscellaneous Application No. 85 of 2019)
  • Capt. Joseph Charles Roy v D & D International (U) Limited (High Court Miscellaneous Application No. 283 of 2008)
  • Bemuga Forwarders Limited v Sany International Development Limited (Miscellaneous Application No. 99 of 2024)
  • Dr. Maj. (Rtd) Anthony Jallon Okullo v Attorney General (Supreme Court Civil Appeal No. 03 of 2020)
  • Kampala International University v Housing Finance Company Limited (Arbitration Causes No. 38 and 46 of 2024)
  • Smile Communications Uganda Limited v ATC Uganda Limited and Another (Arbitration Cause No. 04 of 2022)
  • Monica Kampire & Another v Justus Karangira (High Court Miscellaneous Application No. 532 of 2012)
  • Seyani Brothers & Co. Ltd v Cassia Ltd (High Court Civil Appeal No. 128 of 2011)
  • Democratic Governance Facility v Foundation for Human Rights Initiative (High Court Miscellaneous Application No. 07 of 2023)

Full judgment

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

Newplan Limited v Mercantile Properties Limited (Consolidated Miscellaneous Cause No. 125 of 2024) [2025] UGCommC 416 (13 November 2025)
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.