Wakilii

Power & City Conttractors Ltd v LTL Project (PVT) Ltd (HCT-09-CV-MA-0062-2011)

High Court · [2012] UGHC 110 · 2012 Application Dismissed — Matter Referred to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Preliminary objection in application for temporary injunction arising from civil suit for breach of contract
Decision
Proceedings stayed and matter referred to arbitration under the Arbitration Rules of the Singapore International Arbitration Centre

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where parties have included an arbitration clause in their contract, the court retains jurisdiction to receive the suit but is mandated by s.40 of the Arbitration and Conciliation Act 2000 to refer disputes to arbitration at the request of one party unless the arbitration agreement is null, void, inoperative or incapable of being performed. An arbitration clause is binding and not optional. A point of law may be raised at any time during civil proceedings.

Outcome

Proceedings stayed and matter referred to arbitration under the Arbitration Rules of the Singapore International Arbitration Centre

Facts

The applicant sued the respondent in High Court Civil Suit 29 of 2011 for breach of contract and filed Misc. Application 62 of 2011 seeking a temporary injunction. When the application came up for hearing on 15 February 2012, the applicant's counsel sought an adjournment having just received the brief. The respondent's counsel objected and raised a preliminary objection that the parties' consortium agreement contained an arbitration clause at clause 8.3.3 requiring disputes to be referred to arbitration under the Singapore International Arbitration Centre rules. The applicant argued that the arbitration clause was optional, that the respondent lacked locus to raise the objection, and that the objection was raised too late. The respondent contended that referral to arbitration was mandatory under the Arbitration and Conciliation Act 2000 and that the objection had been raised at the earliest opportunity in pleadings.

Issues

  1. Whether the court has jurisdiction to entertain the suit and application where the parties' contract contains an arbitration clause.
  2. Whether the respondent raised the objection to jurisdiction at the proper time and in the proper manner.
  3. Whether the arbitration clause in the consortium agreement is mandatory or optional.
  4. Whether the court should stay proceedings and refer the dispute to arbitration under the Arbitration and Conciliation Act.

Orders

  • Preliminary objection upheld.
  • Proceedings in Civil Suit No. 29 of 2011 stayed.
  • Proceedings in Misc. Application No. 62 of 2011 stayed.
  • Dispute between the parties referred to arbitration.
  • Costs in the cause.

Rules and key headnotes

Arbitration — Arbitration Clauses — Mandatory Referral to Arbitration
Where parties have included an arbitration clause in their contract, the court is mandated by s.40 of the Arbitration and Conciliation Act 2000 to refer disputes to arbitration at the request of one party, unless the arbitration agreement is null and void, inoperative or incapable of being performed.
Arbitration — Jurisdiction of Court — Court Retains Jurisdiction to Refer
The court retains jurisdiction to receive a suit even where the parties' agreement contains an arbitration clause, as this jurisdiction is necessary to enable the court to refer the matter to arbitration under the Arbitration and Conciliation Act.
Arbitration — Arbitration Clauses — Binding Nature
An arbitration clause in a contract has an enduring and special effect; it is binding on the parties and not optional, and courts will refer disputes to arbitration where there is an arbitration clause in the contract.
Civil Procedure — Points of Law — Raising at Any Time
A point of law may be raised at any time during civil proceedings and the court will decide upon it.

Legislation cited (5)

Cases cited (5)

  • Thompson v Charnock (1777) 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 (Civil Appeal No. 02 of 2008)
  • Fulgensius Mungereza v Price Waterhouse Coopers (Civil Appeal No. 18 of 2002)
  • Makula International Ltd v Cardinal Nsubuga (1982) HCB 11

Full judgment

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

Power & City Conttractors Ltd v LTL Project (PVT) Ltd (HCT-09-CV-MA-0062-2011) [2012] UGHC 110 (21 June 2012)
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.