Wakilii

Pearl Marina Estates Limited v Roko Construction Limited (Miscellaneous Cause 66 of 2023)

High Court · [2023] UGCOMMC 215 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside an arbitral award registered as a decree of court
Decision
Application to set aside arbitral award dismissed; the arbitral award stands and remains enforceable as a decree of the court

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Court held that the application to set aside the arbitral award was not time-barred, as the earliest proven notice of the award to the applicant was on 11 July 2023, and the setting-aside application was filed on 31 July 2023, within the one-month statutory deadline. The Court found no evident partiality on the part of the arbitrator, no conflict with public policy, and no fraud or undue means. The applicant was properly served with hearing notices and a copy of the respondent's claim but failed without explanation to participate. Proceeding ex parte in such circumstances fell within the range of what a reasonable arbitrator might do. Although the arbitrator extended the time for delivery of the award beyond the statutory period without the applicant's express consent, the Court held that the applicant's failure to raise any timely objection during the arbitration constituted a waiver of this ground under section 4 of the Arbitration and Conciliation Act. The application was dismissed.

Outcome

Application to set aside arbitral award dismissed; the arbitral award stands and remains enforceable as a decree of the court

Facts

The applicant and respondent entered into a contract on 1 April 2019 for construction of 240 apartments, later varied to 360 units for US$12,327,342.48 inclusive of VAT. The applicant made an advance payment of US$849,869.70. The applicant terminated the contract on 20 April 2021, alleging dissatisfaction with the respondent's performance, at which time works were at 23% completion. By date of termination, the applicant had paid US$1,824,533. The parties entered into a Mutual Release and Settlement Agreement on 5 May 2021 to conduct an audit. The audit showed the respondent owed the applicant US$929,084, which was to be paid in 12 monthly instalments from 30 June 2021. The parties had agreed disputes would be referred to arbitration and appointed an arbitrator through CADER on 16 May 2022. The applicant appeared for preliminary meetings on 31 May and 23 August 2022 but the arbitrator was absent or the meeting did not proceed as scheduled. Subsequently, the applicant did not file a statement of defence despite service and failed to attend subsequent hearings. On 5 April 2023, the respondent applied for extension of time. On 28 April 2023, the arbitrator granted leave to proceed ex parte. An award was handed down on 19 May 2023 in favour of the respondent, finding the applicant had breached the mutual release and settlement agreement, restraining the applicant from cashing performance and advance payment guarantees, and ordering the applicant to pay the respondent special damages of UGX 795,468,242.20 plus interest at 12% per annum. The award was registered on 11 July 2023. The applicant filed this application on 31 July 2023 to set aside the award.

Issues

  1. Whether the application to set aside the arbitral award was time-barred.
  2. Whether there was evident partiality on the part of the arbitrator.
  3. Whether the arbitral award is in conflict with the public policy of Uganda.
  4. Whether the arbitral award was procured by fraud or undue means.
  5. Whether the arbitral award is not in accordance with the Arbitration and Conciliation Act.
  6. Whether the applicant was not given proper notice of the arbitral proceedings and was thus unable to present its case.
  7. Whether the arbitrator exceeded his mandate and there are errors apparent on the record.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Arbitration — Setting Aside Awards — Time Limits
The remedies for setting aside an arbitral award must be availed within a rigid one-month time limit. The event that triggers the running of time is actual receipt of the award sought to be set aside. For delivery of the arbitral award to be effective, it has to be actually received by the party, and there should be such proof on the arbitrator's record. The period of limitation commences from the date on which the award is actually communicated, not from the date of decision of the tribunal.
Arbitration — Setting Aside Awards — Computation of Time — Calendar Month
When the period prescribed is a calendar month running from any arbitrary date, the period of one month expires upon the day in the succeeding month corresponding to the date upon which the period starts. Computation starts on the day following the day on which the relevant event occurred, and the period expires in the relevant subsequent month on the day which has the same number as the day on which the said event occurred, provided that if the relevant subsequent month has no day with the same number, the period expires on the last day of that month.
Arbitration — Setting Aside Awards — Effect of Registration
Registration of an arbitral award does not convert it into a decree of the Court so as to render the rules of civil procedure directly applicable to it, save for enforcement. Registration only has the effect of recognizing the arbitral award as binding and rendering it enforceable as a decree of the court.
Arbitration — Impartiality and Independence — Appearance of Partiality
Independence and impartiality constitute the core of arbitrator integrity. An appearance of partiality or a reasonable impression of partiality in arbitration occurs where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration. Impartiality requires that the arbitrator should not sit in a proceeding in which he or she is interested, or is perceived to be interested financially, personally or otherwise. Courts will be slow to conclude that an unfavourable procedural decision is indicative of bias against a party.
Arbitration — Public Policy — Grounds for Setting Aside
An award will be considered to be in conflict with public policy if, inter alia: (i) the making of the award was induced or affected by fraud or corruption; or (ii) it is in contravention of the fundamental policy of the Constitution or other laws of Uganda; or (iii) it is in conflict with the most basic notions of morality or justice. Public policy must be interpreted narrowly, or else it can be used opportunistically by award debtors as a gateway to review the merits of the award.
Arbitration — Ex Parte Proceedings — Entitlement and Fairness
When the other party refuses to participate, the tribunal may render an ex parte award once satisfied that the non-participating party has no acceptable excuse for its non-participation, and after recording in writing all procedural steps and efforts to include that party in the proceedings. A party who, though repeatedly written to, does not appear before the arbitrator and allows the proceedings to go ahead ex parte, cannot later claim not to have been given an opportunity of being heard. A party cannot wilfully absent itself from a hearing and then cry foul that the rules of natural justice were not followed.
Arbitration — Time Limits for Making Awards — Extension of Time
An arbitrator is bound to make and publish his or her award within the time mutually agreed to by the parties, unless the parties consent to further enlargement of time. Where a statute prescribes a time limit within which to perform an act, the rules made thereunder cannot extend that time limit. Where the parties prescribe their own time limits in an arbitration agreement, such time period can be extended only if the parties consent to the same. The arbitrator cannot exercise his or her power to extend such time, in the absence of consent of the parties. Failure to participate in arbitral proceedings or raise objections thereto will be deemed a waiver of the right to object to the noncompliance with derogable provisions of the Arbitration and Conciliation Act and will preclude the relevant party from raising such objections in subsequent proceedings.

Legislation cited (26)

Cases cited (52)

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  • Christ For All Nationals v. Apollo Insurance Co. Ltd [2002] 2 EA 366
  • Fountain Publishers v Harriet Nantamu and another (Arbitration Cause No. 1 of 2011)
  • Kilembe Mines Ltd v B. M. Steel Ltd (High Court Miscellaneous Cause No. 002 of 2005)
  • Mohammed Mohammed Hamid v Roko Construction Ltd (Supreme Court Civil Appeal No. 014 of 2015)
  • Uganda Lottery Ltd v Attorney General (High Court Miscellaneous Cause No. 627 of 2008)
  • Katamba Phillip and three others v Magala Ronald (High Court Arbitration Cause No. 003 of 2007)
  • Union of India v. Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239
  • Benarsi Krishna Committee v. Karmyogi Shelters Pvt. Ltd., (2012) 9 SCC 496
  • Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/s Navigant Technologies Pvt. Ltd (2021) SCC OnLine SC 157
  • Fountain Publishers v Harriet Nantamu and another (High Court Miscellaneous Application No. 135 of 2011)
  • Roofclad Ltd v Salzgitter Mannesmann International (High Court Miscellaneous Cause No. 7 of 2015)
  • JSC Ispat Pvt Limited v. HDB Financial Services Ltd (2018) SCC Online Bom 538
  • Ganesh Benzoplast Limited v. Union of India and others, (2020) 09 BOM CK 0001
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  • Dodds v. Walker [1981] 1 WLR 1027, [1981] 2 All ER 609
  • Cheleta Coffee Plantations, Ltd v. Eric Mehlsen [1966] 1 EA 203
  • Re Medicaments and Related Classes of Goods (No 2); Director General of Fair-Trading v. Proprietary Association of Great Britain and Proprietary Articles Trade Association [2001] 1 WLR 700
  • Porter and Weeks v. Magill [2002] 2 WLR 37; [2002] 2 AC 357; [2002] 1 All ER 465
  • Taylor v. Lawrence [2002] 2 All ER 353
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  • Laker Airways Inc v. FLS Aerospace Limited [1999] 2 Lloyds Report 45
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  • Kampala Bottlers Limited v Damanico Limited (Supreme Court Civil Appeal No. 22 of 1992)
  • Sejjaaka Nalima v Rebecca Musoke (Supreme Court Civil Appeal No. 2 of 1985)
  • Uganda Posts and Telecommunications v A. K. P. M. Lutaaya (Supreme Court Civil Appeal No. 36 of 1995)
  • Ratilal Gordhandhai Patel v. Laljimakanji [1957] EA 314
  • Fam International Ltd and another v Mohamed Hamird El-Fatih (Supreme Court Civil Appeal No. 16 of 1993)
  • Egerton v. Earl of Brownlow [1853] Eng R 885, (1853) 10 ER 359
  • Cooke v. Turner (1845) 60 Eng. Rep. 449
  • Sinocore International Co Ltd v. RBRG Trading (UK) Ltd [2018] 2 Lloyd's Rep 133
  • London Export Corporation Ltd. v. Jubilee Coffee Roasting Co. Ltd. (1958) A.W.L.R. 661
  • London Export Corporation Ltd v. Jubilee Coffee Roasting Co. Ltd. [1958] I W.L.R. 271
  • The Pendrecht [1980] 2 Lloyd's Rep 56
  • Bernuth Lines Ltd v. High Seas Shipping Ltd [2005] EWHC 3020
  • M/s. Blue Horse Services and others v. M/s. Capfloat Financial Services Private Limited, 28 September, 2022
  • M/s Amardeep Prakashan v. M/s Siddharth Tradex (P) Ltd and another, 2016 Latest Caselaw 7055 Del
  • Merchant Cash & Capital, LLC v. Ko, Case No. 14 Civ. 659
  • Ting Kang Chung John v. Teo Hee Lai Building Constructions Pte Ltd and others [2010] SGHC 20; [2010] SLR 625
  • Suryadev Alloys and Power Pvt. Ltd. v. Shri Govindaraja Textiles Pvt. Ltd, AIR (2010) SC 640
  • Sunway Creative Stones Sdn Bhd v. Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd and another [2020] MLJU 658
  • Ken Grouting Sdn Bhd v. RKT Nusantara Sdn Bhd and another, [2020] MLJU 1901
  • NBCC Limited v. JG Engineering Pvt. Limited (2010) 2, SCC 385
  • Alphamix Ltd v. The District Council of Riviére Du Rampart (Mauritius), [2023] UKPC 20
  • Jayesh H. Pandya and another v. Subhtex India Ltd. and Others, (2020) 17 SCC 383
  • Quippo Construction Equipment Limited v. Janardan Nirman Pvt. Ltd. (2017) 7 SCC 678
  • Roko Construction Limited v Pearl Marina Estates Limited (High Court Miscellaneous Application No. 193 of 2023)
  • Roko Construction Company Limited v Pearl Marina Estates Limited and another (Miscellaneous Cause No. 0083 of 2021)
  • Gillies v. Secretary of State for Work Pensions [2006] 1 WLR 781

Full judgment

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Pearl Marina Estates Limited v Roko Construction Limited (Miscellaneous Cause 66 of 2023) [2023] UGCommC 215 (16 October 2023)
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.