Wakilii

NIC General Insurance Company Ltd v Roko Construction Limited (Civil Suit No. 921 of 2021)

High Court · [2025] UGCOMMC 213 · 2025 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Preliminary objection to jurisdiction based on arbitration clause in insurance contract
Decision
Preliminary objection dismissed; matter to proceed to substantive hearing

Observed later treatment

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Holding

The court held that where an insurance policy contains two complementary dispute resolution clauses — one general arbitration clause covering broad disputes and one priority clause directing specific disputes on liability and compensation to courts — the priority clause governs disputes on liability. The suit for unpaid insurance premiums, being a dispute on liability, was not barred by section 9 of the Arbitration and Conciliation Act. The preliminary objection was overruled.

Outcome

Preliminary objection dismissed; matter to proceed to substantive hearing

Facts

The plaintiff insurance company sued the defendant construction company for recovery of USD 19,499.18 being unpaid premium for credit insurance covers provided under an insurance contract. The defendant filed a written statement of defense raising a preliminary objection that the suit was barred by section 9 of the Arbitration and Conciliation Act because the insurance policy contained an arbitration clause. The defendant alleged that the plaintiff had altered the dispute resolution clause such that while captioned 'Arbitration', the operative text referred disputes to courts of law. The plaintiff denied any alteration and argued that the clause clearly expressed the parties' intention to refer disputes to courts. The insurance policy contained two dispute resolution provisions: a general arbitration clause covering disputes on existence, validity, termination and amounts payable; and a specific clause captioned 'Arbitration' directing disputes on liability and compensation to courts of law.

Issues

  1. Whether the suit is barred by section 9 of the Arbitration and Conciliation Act.

Orders

  • Preliminary objection overruled.
  • Court to proceed to handle the substantive issues in the case.
  • Parties to appear before the court on 1st July 2025 at 9am for mention.

Rules and key headnotes

Preliminary Objections — Nature and Scope — Points of Law Only
Preliminary objections are raised on purely points of law such as jurisdiction, limitation, or arbitration agreements, and if upheld, dispose of the matter at an early stage without delving into substantive merits. A preliminary objection cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.
Court Intervention — Section 9 Arbitration and Conciliation Act — Scope of Limitation
Section 9 of the Arbitration and Conciliation Act precludes court intervention in matters governed by the Act, and the unlimited jurisdiction of the High Court under Article 139(1) of the Constitution cannot override the Act where parties have agreed to arbitration.
Arbitration Agreements — Interpretation — Common Intent of Parties
The existence and validity of an arbitration agreement should be determined primarily in light of the common intent of the parties, and the language in the dispute settlement agreement should determine whether the dispute is to be referred to an arbitral body or to a court.
Pathological Arbitration Agreements — Interpretation Favouring Arbitration
Where parties have evinced a clear intention to settle disputes by arbitration, the court should give effect to such intention even if certain aspects of the agreement may be ambiguous, inconsistent, incomplete or lacking in certain particulars, so long as the arbitration can be carried out without prejudice to the rights of either party and does not result in an arbitration not within the contemplation of either party.
Insurance Contracts — Complementary Dispute Resolution Clauses — Priority Clauses
Where an insurance policy contains two complementary dispute resolution clauses — one general arbitration clause covering a broad range of disputes and one priority clause directing specific disputes on liability and compensation to courts — the priority clause takes precedence for disputes falling within its scope notwithstanding the general arbitration provision.

Legislation cited (4)

Cases cited (8)

  • Usafi Market Vendors Association v Kampala Capital City Authority (Miscellaneous Application No. 647 of 2018)
  • Pamela Akello Leers v Gladys Bwanika (HCCS No. 29 of 2017)
  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696
  • Koboko District Local Government v Okujjo Swali (Miscellaneous Application No. 1 of 2016)
  • Babcon (U) Ltd v Mbale Resort Hotel (Civil Appeal No. 87 of 2011)
  • Heyam and Another v Darwins Ltd [1942] 1 All ER 337
  • Premium Nafta Products Ltd and Others v Fili Shipping Company Ltd and 30 Others [2007] UKHL 40
  • Insigma Technology Co. Ltd v Alstorn Technology Ltd [2009] SGCA 24

Full judgment

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

NIC General Insurance Company Ltd v Roko Construction Limited (Civil Suit No. 921 of 2021) [2025] UGCommC 213 (10 June 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.