Wakilii

Seyani Brothers & Co Ltd Cassia Ltd (HCT-00-CC-CA 128 of 2011)

High Court · [2013] UGCOMMC 29 · 2013 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitral award under Sections 34(1) and 34(2)(a)(iv), (vi), (vii) of the Arbitration and Conciliation Act
Decision
Arbitral award upheld. Application dismissed with costs to the respondent.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the application to set aside the arbitral award failed on all grounds. The court found no evidence of bias or partiality — the arbitrator gave reasons for findings and both parties had a fair hearing. The issue of client-supplied materials arose from the dispute over delay and breach of contract, falling within the arbitrator's mandate under the arbitration clause. The arbitrator did not exceed his scope in awarding special and general damages, as these remedies were prayed for in the pleadings. The applicant failed to prove any trade usage requiring specific treatment of architects versus quantity surveyors. The court upheld the principle that applications to set aside arbitral awards are not appeals and courts will not re-evaluate evidence or substitute their judgment for the arbitrator's.

Outcome

Arbitral award upheld. Application dismissed with costs to the respondent.

Facts

Seyani Brothers and Cassia Ltd entered into a construction agreement on 18 August 2007 for Seyani Brothers to construct a resort facility at Buziga Hill in Kampala. The contract ended in dispute and Cassia Ltd filed HCCS No. 60 of 2008. By consent order dated 30 April 2010, the suit was referred to arbitration with Hon. Justice Mulenga appointed as arbitrator. On 11 February 2011, the arbitrator issued an award. The arbitrator awarded Seyani Brothers USD 109,080 for unpaid balance with interest. Cassia Ltd was awarded on its counterclaim USD 100,000 in unliquidated damages for lost income, USD 193,758 in special damages, and UGX 10,000,000 in general damages, all with interest. Costs were awarded to Cassia Ltd at two-thirds. Seyani Brothers sought to set aside the award on grounds of alleged bias, excess of mandate, and failure to apply the Act properly.

Issues

  1. Whether the arbitrator exhibited evident partiality and unfairness in making the arbitral award.
  2. Whether the arbitral award dealt with a dispute not falling within the terms of reference to arbitration.
  3. Whether the arbitrator exceeded the scope of his mandate.
  4. Whether the arbitral award was made in accordance with the terms of the contract and trade usages as required by the Arbitration and Conciliation Act.

Orders

  • Application to set aside the arbitral award dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Setting Aside Arbitral Awards — Standard of Proof for Allegations of Bias
Allegations of bias or partiality against an arbitrator are serious and must be proved by the party making them. The test is whether a reasonable person in possession of the relevant information would have thought bias was likely and whether the arbitrator was likely to be disposed to decide the matter only in a particular way. Mere dissatisfaction with the award or the fact that the arbitrator ruled against a party does not establish bias.
Finality of Arbitral Awards — Limited Grounds for Judicial Interference
An application to set aside an arbitral award is not an appeal. Courts will not re-evaluate evidence or substitute their judgment for that of the arbitrator. Arbitration awards are final unless the award was procured contrary to law as provided under Section 34 of the Arbitration and Conciliation Act. Courts approach arbitration awards with a view to upholding them and do not scrutinize them with a meticulous eye seeking to find faults.
Scope of Reference to Arbitration — Disputes Arising from the Contract
Under Section 34(2)(a)(iv) of the Arbitration and Conciliation Act, an award may be set aside if it deals with matters beyond the scope of reference. However, where an issue arises from the dispute submitted to arbitration and is connected to the contract, the arbitrator acts within mandate in addressing it. An arbitration clause covering disputes arising from or in connection with the contract gives the arbitrator jurisdiction to determine all matters relevant to resolving the contractual dispute.
Remedies — Arbitrator's Power to Grant Remedies Prayed For
An arbitrator does not exceed the scope of reference by granting remedies that were expressly prayed for in the pleadings before the arbitrator. Where parties have pleaded for special damages, general damages, interest, and costs, the arbitrator acts within mandate in awarding such relief.
Trade Usage — Burden of Proof
Under Section 28(5) of the Arbitration and Conciliation Act, an arbitral tribunal must decide in accordance with the terms of the contract and take into account usages of the trade applicable to the transaction. A trade usage is a practice having such regularity of observance in a trade that parties should reasonably rely upon it. To establish a trade usage, clear, convincing, and consistent evidence must be adduced showing the usage exists as a fact, is well known, has been generally acted upon, is certain and reasonable, and is not contrary to law. A party cannot succeed in setting aside an award on grounds of failure to apply trade usage where no evidence of such usage was adduced before the arbitrator.

Legislation cited (7)

Cases cited (7)

  • Simbamanyo Estates v Seyani Brothers & Co (HCMA No. 555 of 2002)
  • NIC v ARCONSULTS ARCHITECTS (1984) 1 KALR at 112
  • NUCC & TE V. UGANDA BOOKSHOP [1965] EA 539
  • STATE OF UP V. RAM NATH INTERNATIONAL CONST PCT LTD AIR 1996
  • Nathan Karema v Attorney General (HCCS No. 1019 of 2004)
  • Chevron Kenya Ltd & Another v Dagare Transporters Ltd (HCMA No. 490 of 2008)
  • HARILAL V. STANDARD BANK [1967] EA 512 at 516

Full judgment

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

Seyani Brothers & Co Ltd Cassia Ltd (HCT-00-CC-CA 128 of 2011) [2013] UGCommC 29 (20 February 2013)
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.