Wakilii

Oil Seeds (U ) Ltd v Udanda Development Bank (Civil Appeal 23 of 1995)

Supreme Court · [1997] UGSC 10 · 1997 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court ruling dismissing an application by chamber summons to set aside or remit an arbitration award
Decision
Appeal allowed; High Court dismissal set aside; application to set aside or remit the arbitration award remitted to be heard de novo by another judge of the High Court

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The High Court dismissed the appellant's application to set aside or remit an arbitration award, holding that the award was final and conclusive and that it had no jurisdiction to interfere. The Supreme Court held this was an error of law: sections 11 and 12 of the Arbitration Act (Cap 55) confer on the court a discretionary jurisdiction to remit an award for reconsideration or to set it aside where the arbitrator has misconducted himself or made an error of law on the face of the award. The statutory finality provision in the First Schedule is merely an implied term that does not oust the court's statutory power to intervene in the interest of justice. The appeal was allowed and the application ordered to be heard de novo.

Outcome

Appeal allowed; High Court dismissal set aside; application to set aside or remit the arbitration award remitted to be heard de novo by another judge of the High Court

Facts

By a loan agreement dated 21 November 1988 the respondent bank agreed to lend the appellant US$978,250 to fund the establishment of a vegetable cooking-oil manufacturing mill. The agreement contained a clause referring any dispute to arbitration under the Uganda Arbitration Act. The respondent disbursed only the 30% down payment and later declined to authorise further payment to the supplier, Empire Enterprises Ltd, pending a certificate of findings; BADEA's letter of undertaking and line of credit then lapsed. The respondent ultimately recalled the loan. The dispute was referred by consent to a sole arbitrator, Mr J.W. Mulenga S.C., who on 17 August 1994 found both parties liable to each other and made a net award in the respondent's favour, while refusing the appellant's larger claims for cumulative loss and lost opportunity. Dissatisfied, the appellant applied to the High Court by chamber summons under sections 11 and 12 of the Arbitration Act to set aside in part and remit in part the award. Kityo J dismissed the application, holding the award final and that the court lacked jurisdiction to interfere. The appellant appealed.

Issues

  1. Whether the High Court erred in law in declining jurisdiction to consider the merits of an application to set aside or remit an arbitration award on the ground that the award was final and conclusive.
  2. Whether sections 11 and 12 of the Arbitration Act confer on the court a discretionary jurisdiction to remit or set aside an arbitral award.

Orders

  • Appeal allowed.
  • Order of the High Court dismissing the application by chamber summons set aside.
  • Application to set aside or remit the arbitration award to be heard de novo by another judge of the High Court.
  • Costs of the appeal and in the court below awarded to the appellant.

Rules and key headnotes

Arbitration — Court's jurisdiction to remit or set aside an award — Sections 11 and 12 Arbitration Act
Sections 11 and 12 of the Arbitration Act confer on the court a discretionary jurisdiction to remit an arbitral award to the arbitrator for reconsideration or to set it aside; an arbitrator's award is not of necessity final and conclusive and is subject to the court's intervention.
Arbitration — Finality of award — Implied term not ousting statutory jurisdiction
The provision in paragraph 8 of the First Schedule that an award shall be final and binding is merely an implied term of a submission to arbitration which may be expressly excluded and is subject to law; it does not render an award incapable of review or oust the court's statutory power to remit or set it aside.
Arbitration — Error of law on the face of the award — Meaning of misconduct
Where a question of law not specifically referred to the arbitrator is material to the matters referred and the arbitrator makes a mistake apparent on the face of the award, the award may be set aside; the word misconduct in the Act bears a liberal interpretation and includes cases where the arbitrator has made a mistake of law or of fact.
Arbitration — Interference in the interest of justice
The court will be slow to interfere with an arbitral award given that the parties chose arbitration as their method of settling the dispute, but it will do so whenever this becomes necessary in the interest of justice, and will act where the arbitrator arrived at the decision on a wrong understanding or interpretation of the law.

Legislation cited (6)

  • Arbitration Act (Cap 55) s.11
  • Arbitration Act (Cap 55) s.12
  • Arbitration Act (Cap 55) s.9(2)
  • Arbitration Rules r.7
  • Arbitration Rules r.8
  • Arbitration Act, First Schedule, para 8

Cases cited (9)

  • Rashid v. Hoima Ginneries Ltd
  • Rashio Holding, Co. Mombasa Ltd and others v. Hoima ... (Court of Appeal)
  • ... for Manitoba v. Kel... and others [1922] A.C. (Privy Council), per Lord Parmoor
  • Produce Brokers Co. Ltd v. Olympia Oil and Cake Co. Ltd [1916] ... pp 327-29
  • W...ame Ltd. v. ...oods Estates Ltd (1950) E.A. 370 (Court of Appeal for East Africa)
  • Absalom Ltd v. Great Western Garden Village Society Ltd (1933) A.C. 592
  • The King and Duveen (1913) 2 K.B. 32
  • Sohan Lal v. East African Builders Merchants (1953) 19 E.A.C.A. 50
  • Re ...axie & ...v Cat... (E.A.) at p.23

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

Oil Seeds (U ) Ltd v Udanda Development Bank (Civil Appeal 23 of 1995) [1997] UGSC 10 (14 April 1997)
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.