Wakilii

Plinth Consultancy Services Limited v Inyatsi Construction Limited & 2 Others (Miscellaneous Cause 53 of 2024)

High Court · [2024] UGCOMMC 263 · 2024 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim protective measures pending arbitration before the International Chamber of Commerce
Decision
Application for interim protective measures granted with orders restraining discharge of bank guarantee, requiring security for costs, and directing withholding of payments to 1st respondent pending ICC arbitration

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the applicant established a prima facie case for interim protective measures pending ICC arbitration. The court found that an arbitration agreement existed between the parties through consent and agency relationships, that the applicant would suffer irreparable harm without interim relief, and that the balance of convenience favored the applicant. The court granted orders restraining discharge of the bank guarantee, requiring security for costs of UGX 5 billion, and directing the Ministry of Water and Environment to withhold payment of UGX 21,221,615,641 to the first respondent pending arbitration.

Outcome

Application for interim protective measures granted with orders restraining discharge of bank guarantee, requiring security for costs, and directing withholding of payments to 1st respondent pending ICC arbitration

Facts

The 1st respondent was contracted by the Government of Uganda through the Ministry of Water and Environment for construction works of Kabuyanda Earth Dam in Isingiro District. The applicant executed a subcontract agreement with Inyatsi Construction (U) Ltd, which the applicant asserted was an agent of the 1st respondent. Disagreements arose relating to the execution of the project and the 1st respondent terminated the subcontract agreement on the basis that it had failed to obtain approval from the Ministry. The parties agreed to refer the dispute to arbitration before the International Chamber of Commerce (ICC). The applicant sought interim protective measures from the High Court pending the arbitration, including orders to restrain discharge of a bank guarantee and to secure the arbitral award.

Issues

  1. Whether the Application satisfies the grounds for grant of interim protective measures.
  2. Whether the Applicant is entitled to the orders sought.

Orders

  • The 1st, 2nd and 3rd Respondents are restrained from discharging the Bank Guarantee in respect of the construction works of the Kyabuyanda Earth Dam in Isingiro District pending the hearing and final determination of the dispute before the International Chamber of Commerce.
  • The 1st Respondent is ordered to furnish security for costs in the form of a bank guarantee issued by any commercial bank in Uganda in the sum of UGX 5,000,000,000 within 30 days from the date of delivery of judgment.
  • The Government of Uganda represented by the Ministry of Water and Environment is ordered to withhold payment of UGX 21,221,615,641 to the 1st Respondent pending the hearing and final determination of the dispute before the International Chamber of Commerce.
  • The 3rd Respondent shall not be condemned to costs.
  • Costs in relation to the Applicant, 1st Respondent and 2nd Respondent shall abide the outcome of the arbitration.

Rules and key headnotes

Court Intervention — Interim Protective Measures — Limitation of Jurisdiction
Under Section 9 of the Arbitration and Conciliation Act, the court's intervention in matters governed by the Act is restricted to only what is provided for under the Act, and courts are barred from intervening beyond the limited or special jurisdiction permitted under the Act.
Interim Protective Measures — Concurrent Jurisdiction — Grounds for Grant
Section 6(1) of the Arbitration and Conciliation Act creates concurrent jurisdiction between the arbitral tribunal and the court to grant interim reliefs, and the traditional considerations for grant of interim measures apply: whether the applicant has established a prima facie case, whether the applicant would suffer irreparable harm not compensable by damages, and on which side the balance of convenience lies.
Arbitration Without Privity — Agency Relationships — Group of Companies Doctrine
Arbitration without privity is an exception to the general doctrine of privity of contract, applicable only to arbitration matters, and includes instances of consent or willingness of parties to arbitrate, agency relationships, assignment and novation, corporate veil doctrine, and the group of companies doctrine.
Arbitration Agreement — Post-Dispute Consent — Formation
Parties can create and enter into an arbitration agreement irrespective of the former or existing underlying performance agreement, and the mutual consent required for a valid arbitration agreement need only exist at the point when the parties entered into the dispute resolution agreement, which may be perfected by one party's offer to arbitrate and the other's acceptance by bringing a claim.
Kompetenz-Kompetenz Doctrine — Jurisdiction Over Privity Issues
Under the doctrine of kompetenz-kompetenz, the question of whether parties are parties to a subcontract and arbitration agreement is an issue to be resolved by the arbitral tribunal which has jurisdiction over such matters, and the court cannot pre-empt or pre-determine the decision of the arbitral tribunal.
Affidavit Evidence — Supplementary Affidavits — Closure of Pleadings
Where pleadings have closed in a matter that has proceeded by way of affidavit evidence, a party would not be at liberty to file a supplementary affidavit after the closure of pleadings without seeking the court's leave and giving the other party an opportunity to respond to the additional averments, and affidavits in rejoinder can only be sworn to clarify or rejoin specific issues raised by the respondent in affidavits in reply.
Bank Guarantees — Autonomy of Guarantee Contract — Third Party Interference
A bank guarantee is an autonomous contract separate from the underlying construction contract or guaranteed undertaking, creating a tripartite structure comprising the bank, the beneficiary and the principal, and is subject to independent operation that will not ordinarily be interfered with by courts on grounds irrelevant to the guarantee itself, but a court may intervene on application by a third party where issues of privity are to be determined by an arbitral tribunal.

Legislation cited (10)

Cases cited (25)

  • Mutembuli Yusuf v Nagwomu Moses and Another (Election Appeal No. 43 of 2016)
  • Oyiki Sirino Kassiano and Others v Kampala University (HCMC No. 129 of 2022)
  • Surgipham (U) Ltd v Uganda Investment Authority and Another (HCMC No. 65 of 2011)
  • Babcon Uganda Ltd v Mbale Resort Hotel Ltd (CACA No. 87 of 2011)
  • MSS XSABO Power Ltd and Others v Great Lakes Energy Company NV (HCMA No. 1567 of 2022)
  • Captain Joseph Charles Roy v D and D International (U) Ltd (HCMA No. 283 of 2018)
  • Swabir Mukungu v Kobil Uganda Ltd (HCMC No. 41 of 2015)
  • Polat Yol Yapi Sanvetic SA v UNRA (HCMC No. 3 of 2022)
  • BABS Security Ltd Versus Geothermal Development Ltd HCCC N0. 543 of 2013
  • Afri-Power Engineering Co. Ltd v Roko Construction Ltd (HCCS No. 216 of 2022)
  • Mekwunye v. Lotus Capital Ltd & Ors (2018) LCN/11288 (CA)
  • TMA Consults and Another v Prome Consultants Ltd (HCMC No. 80 of 2021)
  • Wyndham Rather Ltd Versus Eagle Star & British Dominions Insurance Co. Ltd (1925) Lloyd's Law Reports at 214
  • Zura Mohammed Nasim v Latim Andrew (CA No. 27 of 2017)
  • ICC Tribunal case No. 4131 Dow Chemical Group Versus Isover Gobian
  • Cox and Kings Ltd versus SAP India Private Ltd Arbitration Petition No. 38 of 2020
  • Chloro Controls Pvt Ltd Versus Severn Trent Water Purification Inc. and another (2013) 1 SCC 641
  • Eastern Cargolines Consults Ltd and Another v RJF International (Pty) (M.A. No. 611 of 2021)
  • Great Lakes Petroleum (U) Ltd v Vivo Energy Uganda Ltd (HCMC No. 133 of 2023)
  • CFAO Motors Uganda Ltd and Others v Public Procurement Disposal of Public Assets Authority and Others (HCMA No. 205 of 2024)
  • Evelyn Bachwenkojo Karugaba v Shengli Engineering Construction Co. Ltd (HCMA No. 44 of 2022)
  • AC Yafeng Construction Co. Ltd v The Living World Assembly and Others (Civil Suit No. 739 of 2021)
  • Bank of Uganda v Bank Arabe Espanol (SCCA No. 20 of 1998)
  • ABSA Bank Uganda Ltd v Chukwu Ejiofor and Another (HCCA No. 231 of 2022)
  • M/s Everest Holding Ltd. Versus Shyam Kumar Shrivastava & Ors. Arbitration Petition No. 13 of 2017

Full judgment

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Plinth Consultancy Services Limited v Inyatsi Construction Limited & 2 Others (Miscellaneous Cause 53 of 2024) [2024] UGCommC 263 (30 August 2024)
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.