Wakilii

Roko Construction Limited v Kobusingye (Miscellaneous Cause 22 of 2021)

High Court · [2022] UGCOMMC 104 · 2022 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application under Arbitration and Conciliation Act s.34 to set aside an arbitral award arising from a construction contract dispute
Decision
Award of general damages set aside and remitted to arbitrator for reconsideration; remainder of award stands

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Application partly allowed. Court held that the arbitrator conducted proceedings fairly and impartially; site visit observations were properly used to contextualise evidence, not as independent evidence. Award of liquidated damages and rectification costs was within the arbitrator's jurisdiction and correctly decided according to contract terms. However, the arbitrator erred in law by awarding general damages of US$ 1,000,000 in addition to liquidated damages for delay, as a valid liquidated damages clause evidences the parties' intention to exclude general damages for the same breach. That component set aside and remitted for reconsideration.

Outcome

Award of general damages set aside and remitted to arbitrator for reconsideration; remainder of award stands

Facts

Roko Construction executed construction contracts with Kobusingye for the Barracks Lane Service Apartments project in Nsambya totalling approximately US$ 7 million between 2014 and 2016. Upon completion, a dispute arose regarding sums due. Roko claimed US$ 481,590.58 while Kobusingye counterclaimed US$ 2,185,318.15 for breach of contract. An arbitrator was appointed in January 2020. After hearing both parties and conducting a site visit, the arbitrator rendered an award on 5 April 2021 dismissing Roko's claim and awarding Kobusingye US$ 492,264.19 as liquidated damages, US$ 103,103.09 as rectification costs, and US$ 1,000,000 as general damages, plus arbitration costs. Roko applied to set aside the award under section 34 of the Arbitration and Conciliation Act.

Issues

  1. Whether there was evident partiality on the part of the arbitrator in conducting the arbitration proceedings.
  2. Whether the arbitral award is contrary to public policy of Uganda.
  3. Whether the arbitral award is inconsistent with the Arbitration and Conciliation Act.
  4. Whether the arbitrator exceeded her jurisdiction by re-opening and revising final certificates issued under the construction contract.
  5. Whether the arbitrator erred in law by awarding general damages in addition to liquidated damages for the same breach.

Orders

  • Application partly allowed.
  • Award of US$ 1,000,000 as general damages set aside.
  • Matter remitted to arbitrator for reconsideration of general damages component.
  • Applicant awarded half the costs of the application.

Rules and key headnotes

Arbitration and ADR — Judicial Review of Arbitral Awards — Scope of Court Intervention
Courts have limited jurisdiction to intervene in arbitration matters. Under the Arbitration and Conciliation Act section 9, court intervention is restricted to purely procedural steps the tribunal cannot order or enforce, interim measures to preserve the status quo, and measures to enforce or challenge awards. Courts do not function as appellate bodies reviewing the merits of arbitral awards but only decide upon the legality and validity of awards within the narrow statutory grounds.
Arbitration and ADR — Arbitrator Impartiality — Standard of Disqualification
Arbitrators are not held to the same standards of judicial decorum as judicial officers. Given that arbitrators are often selected for their expertise in the relevant field and have many potential conflicts, the standard for evident partiality requires persuasive evidence of actual bias or circumstances that would lead a fair-minded and informed observer to conclude there was a real possibility of bias. A business relationship or connection is not automatically disqualifying if disclosed or if too attenuated to reasonably suggest partiality.
Arbitration and ADR — Site Visits by Arbitrators — Use of Observations
A site inspection by an arbitrator is not for gathering independent evidence but is a means of considering, weighing and assessing the evidence already before the arbitrator. Observations made during a site visit may be used to augment and contextualise the formal evidence on record, but must not form the entire basis of the decision. Where both parties consent to a site visit for contextual understanding, reliance on such observations does not constitute evident partiality.
Arbitration and ADR — Setting Aside Awards — Errors of Law or Fact
An arbitral award is not open to challenge on grounds that the arbitrator reached a wrong conclusion or failed to appreciate facts or evidence. A mistake of fact or law is not a ground for setting aside an award. Courts cannot reassess evidence or substitute their own evaluation for the arbitrator's conclusions on law or fact. The decision of an arbitral tribunal on the substance of the dispute cannot be appealed absent a prior agreement by the parties to permit appeals on questions of law.
Contract Law — Damages for Breach — Liquidated Damages and General Damages
Where parties have agreed to a valid and mandatory liquidated damages clause stipulating a positive amount for a specified breach, this evidences an intention to exclude the right to recover general damages for the same breach. The award of general damages in addition to liquidated damages for the same delay or breach is an error of law. It is irrelevant that actual loss suffered may be greater or less than the stipulated liquidated damages amount.
Arbitration and ADR — Public Policy — Grounds for Setting Aside Awards
An arbitral award is in conflict with public policy only when it is inconsistent with the Constitution or laws of Uganda, inimical to national interest, or contrary to justice and morality. The public policy exception must be interpreted narrowly to prevent opportunistic use by award debtors as a gateway to review the merits. An award is set aside on public policy grounds only when it shocks the conscience of the court to an extent rendering it unenforceable.
Arbitration and ADR — Arbitrator Powers — Interpretation of Contract Terms
Arbitrators are contractually empowered to read and interpret the parties' contract and provide a definitive interpretation of the agreement. Where an arbitrator acts within jurisdiction, has not been corrupt, and has not denied parties a fair hearing, courts should accept the arbitrator's reading as the definitive interpretation even if the court might have read the contract differently. An arbitrator who acts in manifest disregard of the contract acts without jurisdiction, but interpretation of contract provisions by the arbitrator is acceptable provided it does not amount to rewriting the contract.

Legislation cited (14)

Cases cited (30)

  • Coppee-Lavalin SA/NV v Ken-Ren Chemicals and Fertilizers Ltd [1994] 2 All ER 465
  • Kanda v Government of the Federation of Malaya [1962] AC 322
  • R v Deputy Industrial Injuries Commissioner, Ex parte Jones [1962] 2 QB 677
  • R v Schiff, Ex parte Trustees of Ottawa Civic Hospital [1970] 1 OR 752
  • Porter v Magill [2002] 2 AC 357
  • Taylor v Lawrence [2002] 2 All ER 353
  • Christ For All Nationals v Apollo Insurance Co Ltd [2002] 2 EA 366
  • Sinocore International Co Ltd v RBRG Trading (UK) Ltd [2018] 2 Lloyd's Rep 133
  • Moran v Lloyd's [1983] 2 All ER 200
  • Tersons Ltd v Stevenage Development Corporation [1963] 3 All ER 863
  • Gillespie Brothers and Co v Thompsons Brothers and Co [1928] 13 Lloyd LR 519
  • Chevron Kenya Ltd v Daqare Transporters Ltd (Miscellaneous Application No. 490 of 2008)
  • Associated Engineering Co. v. Government of Andra Pradesh (1991) 4 SCC 93 (AIR 1992 Sc 232)
  • Cunliffe-Owen v Teather & Greenwood [1967] 1 WLR 1421
  • McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125
  • Hutton v Warren (1836) 1 M&W 466
  • The Moorcock (1889) 14 PD 64
  • Shirlaw v Southern Foundries [1939] 2 KB 206
  • Kampala Capital City Authority v Nalongo Estates Ltd (Miscellaneous Cause No. 31 of 2013)
  • DB Shapriya and Co Ltd v Bish International BV [2003] 2 EA 404
  • The Rio Claro [1987] 2 Lloyd's Rep 173
  • Robinson v Harman (1848) 1 Exch 850
  • Kibimba Rice Ltd v Umar Salim (Civil Appeal No. 17 of 1992)
  • East Ham BC v Bernard Sunley & Sons Ltd [1966] AC 406
  • Hadley v Baxendale (1854) 9 Ex 341
  • J-Corp Pty Ltd v. Mladenis [2009] WASCA 157
  • Re Medicaments and Related Classes of Goods (No 2) [2001] 1 WLR 700
  • Newcastle United Football Company Ltd v Football Association Premier League Ltd [2021] EWHC 349 (Comm)
  • Egerton v Earl of Brownlow (1853) 10 ER 359
  • Cooke v Turner (1845) 60 ER 449

Full judgment

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Roko Construction Limited v Kobusingye (Miscellaneous Cause 22 of 2021) [2022] UGCommC 104 (17 January 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.