Wakilii

Oikocredit Ecumenical Development Co-operative Society, U.A. v Lugazi Sugar Co-operative and Credit Society Ltd and 3 Ors (CAD ARB 9 of 2013)

Tribunal · [2013] UGCADER 2 · 2013 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to CADER for appointment of arbitrators following breach of loan agreement
Decision
CADER appointed arbitrators to resolve the loan agreement dispute between the parties

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

CADER found that both parties failed to properly appoint arbitrators as required by the loan agreement arbitration clause. The applicant's notice to refer the dispute to arbitration was deficient for omitting appointment of their own arbitrator, and the respondents similarly failed to appoint. CADER exercised its power under s.11(4)(a) of the Arbitration and Conciliation Act to appoint two arbitrators to resolve the loan agreement dispute.

Outcome

CADER appointed arbitrators to resolve the loan agreement dispute between the parties

Facts

On 16 June 2009, Oikocredit and Lugazi Sugar Co-operative Savings & Credit Society Limited entered into a loan agreement. The agreement required the First Respondent's Chairperson, Vice Chairperson and Manager to execute personal guarantees. The loan agreement was breached. The agreement contained an arbitration clause (Clause 8.1) requiring each party to appoint one arbitrator, with the two arbitrators appointing a third. Clause 8.3 allowed parties to agree to alternative dispute resolution. The First Respondent wrote letters in May and July 2013 proposing meetings to settle the matter. On 20 June 2013, the Applicant issued a notice demanding the Respondent appoint an arbitrator within 30 days, but failed to name their own arbitrator. The Respondents also failed to appoint an arbitrator. The Applicant then applied to CADER for orders compelling appointment of arbitrators.

Issues

  1. Whether CADER should order the parties to appoint arbitrators pursuant to the loan agreement arbitration clause.
  2. Whether the applicant's notice to refer the dispute to arbitration was valid despite omitting to name their own arbitrator.
  3. Whether CADER should exercise its power under s.11(4)(a) of the Arbitration and Conciliation Act to appoint arbitrators.

Orders

  • Two arbitrators appointed: Jackie Ndegeya Nakalembe and Patricia Basaza Wasswa.
  • In the event these arbitrators cannot accept appointment, succeeding arbitrators appointed in sequential order: (2) Geoffrey Otim and Stephen Musisi; (3) Tusiime Evans Rushegera and Mohmed Mbabazi.
  • No order as to costs.

Rules and key headnotes

Arbitration — Appointment of Arbitrators — Failure by Parties to Appoint
Where parties to an arbitration agreement fail to appoint their respective arbitrators as required by the agreement, the tribunal may exercise its statutory power under s.11(4)(a) of the Arbitration and Conciliation Act to appoint arbitrators.
Arbitration — Notice to Refer Dispute to Arbitration — Defective Notice
A notice to refer a dispute to arbitration is deficient where the party issuing the notice fails to appoint their own arbitrator as required by the arbitration agreement, even where the notice demands the other party appoint an arbitrator.
Arbitration — Alternative Dispute Resolution — Consent Requirement
An arbitration clause permitting parties to agree to an alternative mode of dispute resolution can only be enforced when agreement has been sought from and secured by the other party regarding the specified alternative mode.

Legislation cited (2)

Full judgment

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

Oikocredit Ecumenical Development Co-operative Society, U.A. v Lugazi Sugar Co-operative and Credit Society Ltd and 3 Ors (CAD ARB 9 of 2013) [2013] UGCADER 2 (7 August 2013)
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.