Wakilii

Sekitoleko v Gapco (U) Limited (Miscellaneous Application 202 of 2001)

High Court · [2002] UGCOMMC 32 · 2002 Application Partly Allowed — Award Remitted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to remit arbitration award for reconsideration arising from Arbitration Cause No. 02 of 2001
Decision
Award remitted to arbitrators for reconsideration on the specific quantum of refunds and set-off for occupation; otherwise confirmed.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that the Arbitration Act Cap. 55 applies to arbitration proceedings commenced before the Arbitration and Conciliation Act 2000 came into force. The court found no error of law in the arbitrators ordering refund of monies paid under an illegal sublease where parties were not in pari delicto and the plaintiff bore the larger burden of guilt. The arbitrators' order concerning movable property was certain, but the award was uncertain as to the specific amounts of rent and other monies to be refunded. The arbitrators did not exceed their authority in determining consequential matters integral to the validity of the sublease. The award was remitted for reconsideration only on the specific amounts of refunds and appropriate set-off for occupation.

Outcome

Award remitted to arbitrators for reconsideration on the specific quantum of refunds and set-off for occupation; otherwise confirmed.

Facts

The plaintiff registered proprietor entered into a sublease agreement with the defendant GAPCO (U) Limited, a non-African entity, on 30 January 1991 for 20 years. The plaintiff was required to complete statutory consent forms for transfer of land to a non-African but did not complete the process. The plaintiff had already encumbered the land with a prior 99-year lease. The defendant paid rent regularly from 1991 to August 1997 and paid shs.3,500,000 on 30 January 1999. A dispute arose over the validity of the sublease and rent deductions from the defendant's account. The matter was referred to arbitration under the Arbitration Act Cap. 55. The arbitrators held the sublease invalid ab initio and ordered refund of monies paid, including the shs.3,500,000 and rent. The arbitrators also determined ownership of fixtures and movable items on the land. The plaintiff applied to remit the award for reconsideration on grounds of error of law, uncertainty, and excess of authority.

Issues

  1. Whether the new Arbitration and Conciliation Act No. 7/2000 applies to arbitration proceedings commenced before its coming into force.
  2. Whether there is an error of law apparent on the face of the arbitration award in ordering refund of monies paid under an illegal sublease agreement.
  3. Whether the arbitration award is uncertain for failing to specify the exact amounts of rent and other monies to be refunded.
  4. Whether the arbitrators exceeded their authority by including in the award matters outside their terms of reference.

Orders

  • The arbitration award is remitted to the arbitrators for reconsideration to assess and particularise the specific amounts of rent and other moneys to be refunded.
  • The arbitrators are to reconcile the refund amount against amounts deducted by the defendant.
  • The arbitrators are to consider suitable set-off for the defendant's six-year occupation and use of the plaintiff's land.
  • Costs of the application are awarded to the applicant/plaintiff.

Rules and key headnotes

Transitional Provisions — Repeal — Effect on Pending Proceedings
The repeal of the Arbitration Act Cap. 55 by the Arbitration and Conciliation Act No. 7/2000 does not affect arbitral proceedings commenced before the coming into force of the new Act, and such proceedings remain governed by the repealed Act pursuant to the transitional provision in section 75(2) and the general principle in the Interpretation Decree section 13(2) that repeal does not affect rights or privileges acquired or accrued under the repealed Act.
Illegal Contracts — Recovery of Money Paid — Pari Delicto — Unjust Enrichment
Where a contract is illegal and void ab initio but the parties are not in pari delicto, the party bearing the lesser burden of guilt may recover money paid under the illegal contract on the principle of unjust enrichment, notwithstanding the general rule that money paid under an illegal agreement cannot be recovered.
Remission of Award — Uncertainty — Specification of Quantum
An arbitration award that orders refund of monies but fails to ascertain the exact amounts to be refunded, leaving the amounts as mere generalities or speculation, is uncertain and must be remitted to the arbitrators for reconsideration to particularise the specific amounts.
Scope of Authority — Consequential Matters — Finality of Award
An arbitrator does not exceed his authority by determining consequential matters that flow of necessity from the central issues referred to arbitration, where determination of such consequential matters is integral to the dispute and necessary to give the award finality and comprehensiveness, provided the arbitrator has clearly indicated his intention to determine such consequential matters.
Arbitrator's Duty — Finality and Comprehensiveness — Balance with Ultra Vires Doctrine
The cardinal doctrine requiring an arbitrator not to exceed his powers and to decide neither more nor less than the dispute submitted must be balanced delicately with the competing principle requiring the arbitrator to give a sufficiently comprehensive award that disposes of the dispute with finality and leaves no important matters of substance unresolved between the parties.

Legislation cited (6)

  • Arbitration Act Cap. 55 s.11
  • Arbitration Rules S.I 55-01 r.7
  • Arbitration Rules S.I 55-01 r.8
  • Arbitration Rules S.I 55-01 r.16
  • Arbitration and Conciliation Act No. 7/2000 s.75(2)
  • Interpretation Decree s.13(2)

Cases cited (6)

  • Mistri Singh v Kulubya [1963] EA 408
  • Moledina v Hoima Ginners [1967] EA 645
  • Kariri Cotton Co Ltd v Ranchoddas Dewani [1967] EA 188
  • Shelley v Paddock [1980] 1 QC 348
  • NUCCTF v Uganda Bookshop [1965] EA 533
  • Ross v Boards (1838) Ad & EL 290

Full judgment

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

Sekitoleko v Gapco (U) Limited (Miscellaneous Application 202 of 2001) [2002] UGCommC 32 (18 February 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.