Wakilii

Security Group Uganda Limited v Finasi-Ishu Construction SPV-Limited (Civil Suit 829 of 2023)

High Court · [2024] UGCOMMC 40 · 2024 Matter Referred to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection to a civil suit for recovery of debt arising from guarding services contract
Decision
Suit dismissed and matter referred to arbitration

Observed later treatment

Treatment recorded in citing cases followed in 1 Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Good law Followed in 1 case and applied in 0 cases, with no adverse treatment recorded. Citations fading — 3 citing cases on record, 3 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Held that where parties have executed a contract containing an arbitration clause, the Court is obliged under Section 5(1) of the Arbitration and Conciliation Act to refer the matter to arbitration unless the agreement is null and void, inoperative or incapable of being performed. A general jurisdiction clause providing for institution of proceedings in any court of competent jurisdiction does not render an arbitration clause inoperative where the arbitration clause specifically references the Arbitration and Conciliation Act and parties have not waived arbitration. The suit was dismissed to enable the parties to undertake arbitration in accordance with clause 16 of their contract.

Outcome

Suit dismissed and matter referred to arbitration

Facts

On 1 December 2021, the plaintiff and defendant executed a Guarding Services Contract for provision of guarding services at the construction site for the International Specialized Hospital of Uganda at Lubowa for two years at an agreed cost of UGX 74,582,400. The plaintiff claimed the defendant breached the contract by failing to remit payments despite numerous demands and instituted Civil Suit No. 829 of 2023 seeking recovery of the outstanding sum plus 10% per annum interest and costs. The defendant was granted leave to appear and defend and filed a written statement of defence and counterclaim contending the plaintiff breached the contract terms. On 22 February 2024, the defendant raised a preliminary objection under Sections 5, 9 and 71 of the Arbitration and Conciliation Act, opposing the suit on grounds that the dispute was subject to an arbitration agreement per clause 16 of the contract and should be referred to arbitration.

Issues

  1. Whether the suit should be dismissed for violation of the arbitration clause in the parties' Agreement?
  2. What remedies are available to the parties?

Orders

  • The dispute between the parties is referred to arbitration in accordance with the provisions of the Arbitration and Conciliation Act, Cap. 4.
  • High Court Civil Suit No. 829 of 2023 is dismissed.
  • Each party shall meet its costs.

Rules and key headnotes

Arbitration Agreement — Mandatory Referral — Grounds for Refusal
Under Section 5(1) of the Arbitration and Conciliation Act, a court before which proceedings are brought in a matter which is the subject of an arbitration agreement must refer the matter to arbitration unless the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed, or that there is no dispute between the parties with regard to the matters agreed to be referred to arbitration.
Arbitration Agreement — Pathological Clauses — Inconsistent Dispute Resolution Clauses
A contract clause providing for institution of proceedings in any court of competent jurisdiction does not render an arbitration clause null and void, inoperative or incapable of being performed where the arbitration clause specifically and mandatorily provides for arbitration under the Arbitration and Conciliation Act. The contract should be read and interpreted as a whole to determine the spirit and intention of the parties, with the specific arbitration clause taking precedence over a general jurisdiction clause.
Court Intervention — Limited Jurisdiction under Section 9
Section 9 of the Arbitration and Conciliation Act restricts the Court's jurisdiction in matters governed by the Act, providing in mandatory terms that except as provided in the Act, no Court shall intervene in matters governed by the Act. The unlimited original jurisdiction of the High Court cannot override this provision.
Party Autonomy — Enforceability of Arbitration Agreements
Arbitration agreements are matters of contract based on the principle of party autonomy which recognizes the rights of parties to design their arbitral dispute resolution process. The effect of Section 5(1) of the Arbitration and Conciliation Act is to make contracting parties live up to their agreement by disallowing any of them to refuse to perform their part of the contract when it becomes disadvantageous to them.
Interpretation of Contracts — Conflicting Clauses
Where a contract contains both a general jurisdiction clause and a specific arbitration clause referencing the Arbitration and Conciliation Act, the specific arbitration clause is to be given effect over the general clause in respect of dispute resolution, and the contract should be construed so as to give full meaning and effect to all of its provisions.

Legislation cited (13)

Cases cited (21)

  • Yan Jian Uganda Company Ltd v Siwa Builders and Engineers (Misc. Application No. 1147 of 2014)
  • Power and City Contractors v LTL Project (PVT) Ltd (Misc. Application No. 62 of 2011)
  • Ambitious Construction Company Limited v Uganda National Cultural Centre (Misc. Application No. 441 of 2020)
  • Lamac General Services (U) Limited t/a African Boma & Others v Pegasus Technologies Limited (Misc. Application No. 1285 of 2021)
  • Lakeside Dairy Limited v International Centre for Arbitration and Mediation Kampala and Anor (Misc. Cause No. 21 of 2021)
  • Heyam and Another v Darwins Ltd [1942] 1 All ER 337
  • Premium Nafta Products Ltd and Others v Fili Shipping Company Ltd and others [2007] UKHL 40
  • Fiona Trust and Holding Corporation v Privalov [2007] 4 All ER 951
  • Omugabe Mbabazi Sam v Tumwesigye Dan (High Court Civil Misc. Application No. 10 of 2023)
  • Baku Raphael Obudra & Anor v Attorney General (Supreme Court Civil Appeal No. 1 of 2005)
  • Uganda Revenue Authority v Rabbo Enterprises (U) Ltd & Anor (Supreme Court Civil Appeal No. 12 of 2004) [2017] UGSC 20
  • Babcon Uganda Ltd v Mbale Resort Hotel Ltd (Court of Appeal Civil Appeal No. 87 of 2011)
  • Coppee-Lavalin SA/NV v Ken-Ren Chemicals and Fertilizers Ltd [1994] 2 All ER 465
  • Broken Hill City Council v Unique Urban Built Pty Ltd [2018] NSWSC 825
  • Lucky-Goldstar International (HK) Ltd v NG Moo Kee Engineering Ltd [1993] HKCFI 14
  • Bulkbuild Pty Ltd v Fortuna Well Pty Ltd & Ors [2019] QSC 173
  • National Social Security Fund v Alcon International Ltd (Court of Appeal Civil Appeal No. 2 of 2008)
  • ATC Uganda Limited v Smile Communications Uganda Limited (Misc. Application No. 621 of 2023)
  • Department of Economics, Policy and Development of the City of Moscow v Bankers Trust Co [2004] EWCA Civ 314
  • North Shore Ventures Ltd v Anstead Holdings Inc (No.2) [2011] EWHC 910 (Ch)
  • CGU International Insurance Plc v Astra Zeneca Insurance Co. Ltd [2007] 1 All ER (Comm) 501

Cases citing this judgment (2)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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Security Group Uganda Limited v Finasi-Ishu Construction SPV-Limited (Civil Suit 829 of 2023) [2024] UGCommC 40 (22 March 2024)
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.