Wakilii

Pile Corporation Ltd v Twed Property Development Ltd (CAD ARB 4 of 2018)

Tribunal · [2018] UGCADER 2 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to appoint arbitrator under arbitration agreement
Decision
Arbitrator appointed to resolve the dispute between the parties

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The tribunal held that Clause 10 of the Service Agreement constitutes a valid arbitration agreement. An advocate's error in correspondence referring to 'mediators' instead of 'arbitrators' cannot infect or invalidate the contractual arbitration clause. The respondent's failure to cooperate in the mutual obligation to appoint an arbitrator does not render the clause inoperative. The tribunal appointed an arbitrator and awarded costs to the applicant.

Outcome

Arbitrator appointed to resolve the dispute between the parties

Facts

The parties entered into a Service Agreement on 7 July 2017 containing an arbitration clause (Clause 10) stating that disputes should be settled by arbitration and, in case of failure of arbitration, referred to courts. A dispute arose and the applicant sent a notice of breach followed by a notice nominating arbitrators. The respondent did not respond to the nomination. The applicant then applied to CADER for appointment of an arbitrator. The respondent opposed the application on grounds that the arbitration clause was invalid, inoperative, and inconsistent with the Arbitration and Conciliation Act, and that the applicant's counsel had referred to 'mediators' rather than 'arbitrators' in correspondence, demonstrating confusion about the dispute resolution mechanism intended.

Issues

  1. Whether Clause 10 of the Service Agreement constitutes a valid arbitration agreement under the Arbitration and Conciliation Act.
  2. Whether the arbitration clause refers to mediation or arbitration.
  3. Whether the applicant's counsel's reference to 'mediators' in correspondence invalidates the arbitration clause.
  4. Whether the respondent's failure to cooperate in appointing an arbitrator entitles the applicant to have an arbitrator appointed by the tribunal.

Orders

  • Application granted.
  • Arbitrator appointed.
  • Costs of the application awarded to the applicant.

Rules and key headnotes

Arbitration Agreement — Validity — Interpretation of Arbitration Clause
An arbitration clause in a contract that provides for settlement of disputes by arbitration and reference to courts 'in case of failure of the arbitration' constitutes a valid arbitration agreement under section 2(1)(c) of the Arbitration and Conciliation Act, which defines arbitration as an agreement to submit disputes to arbitration.
Arbitration Agreement — Effect of Advocate's Error in Correspondence
An advocate's error in correspondence, such as referring to 'mediators' when the contract provides for 'arbitration', cannot infect or invalidate the contractual arbitration clause, because the clause speaks for itself and neither party has sought to amend or rectify it.
Appointment of Arbitrator — Mutual Obligation of Parties
The creation of an arbitral tribunal requires mutual effort by both parties. A party cannot take advantage of the other party's counsel's error to shirk the mutual obligation to cooperate in setting up the tribunal. Where one party nominates an arbitrator and the other fails to respond, the tribunal may appoint an arbitrator.
Party Autonomy — Two-Tier Arbitration — Appellate Arbitration
Party autonomy is the backbone of arbitration. Parties are free to agree on a two-tier arbitration system providing for an appeal from one arbitral tribunal to another. Such an agreement does not violate the Arbitration and Conciliation Act or public policy, and the Act contains no explicit or implicit prohibition against appellate arbitration.
Arbitration and Conciliation Act — Section 2(1)(c) — Curing Defects in Arbitration Clauses
The effect of section 2(1)(c) of the Arbitration and Conciliation Act is to cure any defect created by a terse or rambling dispute resolution clause, provided the clause evidences an agreement to submit disputes to arbitration.

Legislation cited (8)

Cases cited (10)

  • Centrotrade Minerals & Metal Inc v Hindustan Copper Limited
  • Delta Industrial Equipment Ltd v Uchumi Supermarkets Ltd (CAD ARB 12 of 2014)
  • Roko Construction Ltd v Aya Bakery (U) Ltd (CAD ARB 10 of 2007)
  • Heyman v Darwins [1942] All ER 337
  • BM Steels v Kilembe Mines (CAD ARB 10 of 2004)
  • Bharat Aluminium Company v Kaiser Aluminium Technical Services Inc (2016) 4 SCC 126
  • Sumitomo Heavy Industries Ltd v ONGC Ltd (1998) 1 SCC 305
  • Reliance Industries Ltd v Union of India (2014) 7 SCC 603
  • Shri Lal Mahal Ltd v Progetto Grano Spa (2014) 2 SCC 433
  • Subhash Aggarwal Agencies v Bhilwara Synthetics Ltd (1995) 1 SCC 371

Full judgment

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

Pile Corporation Ltd v Twed Property Development Ltd (CAD ARB 4 of 2018) [2018] UGCADER 2 (9 February 2018)
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.