Wakilii

R.R.P (U) Ltd v Assist (U) Ltd (Misc.Abitration Cause No. 4 of 2002)

High Court · [2002] UGCOMMC 18 · 2002 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to partially vary and/or set aside arbitral award under section 35 of the Arbitration and Conciliation Act
Decision
Portions of arbitral award set aside; enforcement of remaining awards stayed pending deposit of security or determination of damages claim

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court set aside portions of an arbitral award on grounds of evident partiality. The arbitrator erred by importing the concept of force majeure where the contract referred only to extraordinary circumstances, allowing a claim of UGX 40,851,720 despite evidence of murram shortages and equipment idleness. Having found breach of contract by the respondent through supply of defective equipment, the arbitrator improperly denied general damages by suggesting the applicant should have walked away from the contract. The court set aside the award of UGX 40,851,720 and the denial of general damages, ordering security pending determination of damages.

Outcome

Portions of arbitral award set aside; enforcement of remaining awards stayed pending deposit of security or determination of damages claim

Facts

RRP (U) Ltd leased equipment from Assist (U) Ltd to perform a contract with the Ministry of Works. The equipment supplied by Assist was defective, broke down frequently, and performed below capacity. RRP disputed claims for payment when equipment was idle due to lack of murram and mechanical failures. RRP notified Assist of murram problems. The contract provided for notification of extraordinary circumstances and recording of hours when machines were idle. An arbitrator (Eng. Hans Mwesigwa) awarded Assist UGX 40,851,720 for the disputed period, finding payment was due whether or not murram was available as lack of murram did not constitute force majeure. The arbitrator also found both parties breached the contract but awarded no damages, reasoning that RRP should have walked away when equipment proved inadequate. RRP applied to set aside portions of the award.

Issues

  1. Whether the arbitrator demonstrated evident partiality in making the award.
  2. Whether the arbitrator erred in finding that payment for leased equipment was due for the entire period regardless of whether equipment was idle.
  3. Whether the arbitrator erred in refusing to award general damages after finding breach of contract by the respondent.
  4. Whether the arbitrator properly evaluated evidence relating to equipment breakdown and non-tasking.

Orders

  • Award of UGX 40,851,720 set aside.
  • Arbitrator's award A4 denying general damages for breach of contract set aside.
  • Enforcement of awards of UGX 7,373,287 and UGX 121,543,610 and interest of 20% to abide determination of claim for general damages or deposit in court of UGX 128,916,897 as security.
  • Respondent to deposit security of UGX 128,916,897 within 45 days.
  • Costs of application awarded to applicant.

Rules and key headnotes

Setting Aside Awards — Evident Partiality — Standard
To set aside an arbitral award on grounds of evident partiality under section 35 of the Arbitration and Conciliation Act, the court must find that the arbitrator demonstrated bias that tainted the award.
Setting Aside Awards — Judicial Review of Awards — Scope
Courts must as a general rule uphold arbitral awards and only interfere with them in exceptional circumstances, but will set aside awards where evident partiality is shown.
Contractual Interpretation — Force Majeure vs Extraordinary Circumstances
Where a contract refers to 'extraordinary circumstances' and provides for notification and recording of idle time, an arbitrator demonstrates bias by importing the more extreme concept of force majeure to deny a defence based on notified circumstances such as lack of materials causing equipment idleness.
Breach of Contract — Damages — Duty to Award
Where an arbitrator finds breach of contract by one party through supply of defective equipment that was lacking in integrity and had negative impact on the other party's work, the arbitrator cannot properly deny an award of general damages on the basis that the injured party should have terminated the contract earlier. Failure to mitigate is relevant to quantum but does not constitute independent breach justifying denial of all damages.
Procedure — Application to Set Aside Award — Grounds
An application brought under section 35 of the Arbitration and Conciliation Act to set aside an award is distinct from objection to award proceedings under rules 7 and 8 of the Arbitration Rules and is properly brought under section 35(2)(a)(vi).

Legislation cited (8)

  • Arbitration and Conciliation Act 7 of 2000 s.35
  • Arbitration and Conciliation Act 7 of 2000 s.39
  • Arbitration and Conciliation Act 7 of 2000 s.10
  • Arbitration Rules r.13
  • Arbitration Rules r.7
  • Arbitration Rules r.8
  • Judicature Statute s.35
  • Constitution of Uganda 1995

Cases cited (2)

  • Re Arbitration of Mulfibhai Madhvani v Lakham & Co Ltd (Misc Cause No. 4 of 1956)
  • Total (U) Ltd v Burambe General Agencies (Arbitration Application No. 3 of 1998)

Full judgment

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

R.R.P (U) Ltd v Assist (U) Ltd (Misc.Abitration Cause No. 4 of 2002) [2002] UGCommC 18 (25 September 2002)
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.