Wakilii

Prism Construction Company Limited v Attorney General (Miscellaneous Cause 76 of 2021)

High Court · [2022] UGCOMMC 136 · 2022 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim injunctive relief as protective measure pending arbitration
Decision
Application for interim injunction dismissed; respondent (Ministry) permitted to proceed with completion of construction using alternative contractor

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed the application for a mandatory injunction to restore the contractor to the construction site pending arbitration. The court held that the applicant failed to demonstrate that restoring possession was necessary to prevent harm to the arbitral process or preserve assets for a subsequent award. Damages were found to be an adequate remedy for the contractor's quantified claim. The balance of convenience favoured refusal where the eviction had already occurred and the parties' relationship required a high degree of cooperation which had broken down, making continued coexistence on site impracticable.

Outcome

Application for interim injunction dismissed; respondent (Ministry) permitted to proceed with completion of construction using alternative contractor

Facts

The applicant contractor entered a construction contract with the Ministry of Education dated 27 January 2020 to construct facilities at Uganda Technical College, Bushenyi. Disputes arose regarding slow progress and quality of materials. The contract period, after three extensions totalling nine months, expired on 1 August 2021. On or about 25 October 2021, the Ministry decided the contract had expired and would not be renewed. The Ministry called on the advance guarantee (UGX 1,480,182,257) and performance guarantee (UGX 981,966,874). The applicant commenced adjudication proceedings. On 28 October 2021, the Ministry evicted the applicant from the site. The applicant filed this application on or about late December 2021 seeking a mandatory injunction to restore it to possession of the site pending arbitration.

Issues

  1. Whether the applicant demonstrated a serious question to be arbitrated with sufficient likelihood of success to warrant a mandatory injunction restoring possession of the construction site.
  2. Whether the applicant faced an imminent risk of irreparable loss if not restored to the site pending arbitration.
  3. Whether the balance of convenience favoured granting a mandatory injunction restoring the applicant to the construction site.

Orders

  • Application dismissed.
  • Costs of the application awarded to the respondent.

Rules and key headnotes

Interim Measures of Protection — Court's Discretion — Mandatory Injunctions
Under section 6(1) of the Arbitration and Conciliation Act, a court may grant interim measures of protection to preserve rights pending arbitration, but mandatory injunctions restoring an evicted party to possession require an unusually strong and clear case and a high degree of assurance that the injunction will be found rightly granted at trial—a higher standard than for prohibitory injunctions.
Interim Measures of Protection — Prima Facie Case — Necessity for Arbitral Process
To justify an injunction as an interim measure of protection pending arbitration, the applicant must demonstrate that the order sought is necessary to prevent current or imminent harm or prejudice to the arbitral process, or to preserve assets out of which a subsequent award may be satisfied; a mere quantified compensatory claim does not establish such necessity.
Injunctions — Irreparable Loss — Adequacy of Damages
An injunction will not be granted where the applicant has a remedy by way of damages; damages are an adequate remedy where the applicant's claim in prospective arbitration is for breach of contract and the applicant seeks what amounts to specific performance requiring a high degree of cooperation between parties whose relationship has broken down.
Injunctions — Balance of Convenience — Ongoing Contractual Relationships
Where relations between parties have become so fraught that the court cannot expect them to continue an ongoing contractual relationship requiring cooperation and supervision, the balance of convenience favours refusal of an injunction; the court should not compel parties to continue a relationship one party rationally does not want to maintain.
Construction Contracts — Termination — Performance Guarantees
Where a construction contract period expires and the employer calls on performance guarantees and evicts the contractor from the site, the contractor's claim for damages arising from the termination does not entitle it to a mandatory injunction restoring possession pending arbitration absent proof that restoration is necessary to prevent harm to the arbitral process or preserve assets for satisfaction of an award.

Legislation cited (3)

Cases cited (8)

  • Kiyimba Kaggwa v Katende Haji Abdu Nasser [1985] HCB 44
  • Leisure Data v Bell [1988] FSR 367
  • Shepherd Homes Ltd v Sandham [1971] Ch 340
  • Kiyimba Kagwa v Haji Abdu Nasser Katende [1985] HCB 43
  • Mugenyi Yesero v Wandera Philemon K [1987] HCB 78
  • Uganda Moslem Supreme Council v Kagimu Mulumba and Four Others [1980] HCB 110
  • Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670
  • NWL Ltd v Woods [1979] 3 All ER 614

Full judgment

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

Prism Construction Company Limited v Attorney General (Miscellaneous Cause 76 of 2021) [2022] UGCommC 136 (25 April 2022)
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.