Wakilii

Power and City Contractors Ltd v LTL Project (PVT) Ltd (Hct-09-cv-ma-0062 of 2011)

High Court · [2011] UGHC 78 · 2011 Application Dismissed — Matter Referred to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection to jurisdiction in an application for temporary injunction arising from civil suit for breach of contract
Decision
Matter referred to arbitration in Singapore under the Singapore International Arbitration Centre rules

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where parties have agreed to an arbitration clause in their contract, the court must refer disputes to arbitration unless the agreement is null and void, inoperative, or incapable of being performed. The arbitration clause in the consortium agreement was clear and binding. A point of law may be raised at any time during proceedings. Proceedings stayed and matter referred to arbitration under Singapore International Arbitration Centre rules.

Outcome

Matter referred to arbitration in Singapore under the Singapore International Arbitration Centre rules

Facts

The applicant sued the respondent in Civil Suit No. 29 of 2011 for breach of contract and sought to recover sums due. The applicant then filed Misc. Application No. 62 of 2011 seeking a temporary injunction. When the injunction application came up for hearing, the respondent raised a preliminary objection that the parties had agreed by contract to refer disputes to arbitration under the Singapore International Arbitration Centre rules. The applicant argued that the court had jurisdiction because the contract was made and performed in Uganda, that parties cannot oust the jurisdiction of courts, that the arbitration clause was optional not mandatory, and that the respondent had lost the right to object by filing a defence without first seeking a stay. The respondent argued that referral to arbitration is mandatory under the Arbitration and Conciliation Act unless statutory exceptions apply, and that the objection was raised at the earliest opportunity.

Issues

  1. Whether the court has jurisdiction to entertain the suit given the existence of an arbitration clause in the parties' contract.
  2. Whether the respondent raised the objection to jurisdiction at the appropriate time and in the proper manner.
  3. Whether the arbitration clause is mandatory or optional.
  4. Whether proceedings should be stayed and the matter referred to arbitration.

Orders

  • Preliminary objection upheld.
  • Stay of proceedings in Civil Suit No. 29 of 2011 granted.
  • Stay of proceedings in Misc. Application No. 62 of 2011 granted.
  • Dispute referred to arbitration under the Arbitration Rules of the Singapore International Arbitration Centre.
  • Costs in the cause.

Rules and key headnotes

Arbitration & ADR — Mandatory Referral to Arbitration — Effect of Arbitration Clause in Contract
Where parties have incorporated an arbitration clause in their contract, they have recognised arbitration as an effective means of resolving disputes arising from that contract, and the clause is binding on the parties.
Arbitration & ADR — Jurisdiction of Court — Court's Duty to Refer Disputes to Arbitration
Under the Arbitration and Conciliation Act s.40, when a court is seized of an action in a matter in respect of which the parties made an arbitration agreement, the court shall at the request of one of the parties refer the parties to arbitration, unless it finds that the agreement is null and void, inoperative, or incapable of being performed.
Arbitration & ADR — Arbitration Clause — Binding vs Optional Nature
An arbitration clause in a contract that is clear and unambiguous is not optional but is binding on the parties, and the court will refer disputes to arbitration where such a clause exists.
Civil Procedure — Preliminary Objections — Time for Raising Point of Law
A point of law may be raised at any time during proceedings and decided upon, and is not subject to the time limitations that apply to objections to jurisdiction under the Civil Procedure Rules.
Arbitration & ADR — Court's Jurisdiction — Effect of Arbitration Agreement on Jurisdiction
The existence of an arbitration clause does not oust the jurisdiction of the court; rather, the court retains jurisdiction to receive the suit so that it may consider whether to refer the matter to arbitration in accordance with the Arbitration and Conciliation Act.

Legislation cited (5)

Cases cited (6)

  • Thompson v Charnock (1799) 8 Term Rep 139
  • Tononoka Steels Ltd v Eastern and Southern Africa Trade and Development Bank (2000) 2 EA 532
  • National Social Security Fund v Alcon International Ltd (Supreme Court Civil Appeal No. 02 of 2008)
  • Fulgensius Mungerera v Price Waterhouse Coopers (Supreme Court Civil Appeal No. 18 of 2002)
  • Makula International Ltd v Cardinal Nsubuga (1982) HCB 11
  • National Social Security Fund v Alcon International Ltd (Civil Appeal No. 02 of 2008)

Full judgment

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

Power and City Contractors Ltd v LTL Project (PVT) Ltd (Hct-09-cv-ma-0062 of 2011) [2011] UGHC 78 (21 June 2011)
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.