Wakilii

Shah Vershi Devshi and Co. Ltd v Hersfeld (Civil Suit No. 1178 of 1953)

East African Court of Appeal · [1955] EACA 85 · 1955 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for judgment following arbitration award and for order as to costs of the suit
Decision
Judgment entered in terms of the award; plaintiff's application for separate order as to costs of the suit dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where parties refer all matters in difference, including costs of the suit, to arbitration, the Court is functus officio and cannot make an order for costs of the suit if the arbitrator's award is silent on that matter. Order 45, rule 3(2) ousts the Court's jurisdiction once the matter is referred. The award of 'costs of the reference' means only costs of the application for reference, and 'costs of the arbitration' means only costs before the arbitrator, not court costs incurred before the reference. The Court's discretion under section 27 is excluded by rule 3(2). The proper remedy is to apply for remission of the award back to the arbitrator.

Outcome

Judgment entered in terms of the award; plaintiff's application for separate order as to costs of the suit dismissed

Facts

The plaintiff company sued the defendant for Sh. 22,622/81 for goods sold and delivered, work done, interest and costs. The parties agreed to refer all matters in difference to arbitration. The formal order of reference stated that 'the matters in difference between the parties arising in this suit and as set out in the pleadings' be referred to arbitration, and that costs of the application be costs in the cause. The arbitrator awarded the plaintiff Sh. 15,714/84 (about three-quarters of the claim), dismissed the balance, and awarded the plaintiff two-thirds of the 'taxed costs of the reference' and apportioned 'costs of the award' in the ratio one-third to two-thirds. The award was silent on costs of the suit incurred before the reference. The plaintiff applied for judgment in terms of the award and additionally sought an order for two-thirds of its costs 'in terms of the award'. The defendant opposed any order for costs of the suit as incompetent.

Issues

  1. Whether the costs of the suit were referred to arbitration by the order of reference.
  2. Whether the arbitrator's award of 'costs of the reference' and 'costs of the arbitration' encompassed the costs of the suit.
  3. Whether the Court retained jurisdiction to make an order for costs of the suit after the matter had been referred to arbitration but the arbitrator's award was silent on those costs.
  4. Whether the Court's discretion under section 27 of the Civil Procedure Ordinance was ousted by Order 45, rule 3(2) after reference of costs to arbitration.

Orders

  • Application for order as to costs of the suit dismissed.
  • Defendant awarded costs of the application.

Rules and key headnotes

Arbitration — Reference to Arbitration — Scope of Reference — Costs of the Suit
Where an order of reference provides that 'the matters in difference between the parties arising in this suit and as set out in the pleadings' be referred to arbitration, and costs of the suit are claimed in the plaint and denied in the defence, the costs of the suit are one of the matters in difference and are thereby referred to arbitration.
Civil Procedure — Arbitration — Jurisdiction of Court After Reference — Order 45 rule 3(2)
Where a matter has been referred to arbitration under Order 45, the Court shall not, save in the manner and to the extent provided in that Order, deal with such matter in the same suit. Once costs of the suit are referred to arbitration, the Court becomes functus officio as to those costs and cannot make an order for them.
Statutory Interpretation — Civil Procedure Rules — 'Costs of the Reference' and 'Costs of the Arbitration'
The phrase 'costs of the reference' in an arbitration award means only the costs of the application for an order of reference and its necessary sequel. The phrase 'costs of the arbitration' in Order 45, rule 13 means only the costs of proceedings before the arbitrator, and does not extend to court costs incurred before the reference.
Civil Procedure — Costs — Discretion of Court — Exclusion by Statute
The Court's discretion to award costs under section 27 of the Civil Procedure Ordinance is subject to such conditions and limitations as may be prescribed and to the provisions of any law for the time being in force. Where Order 45, rule 3(2) precludes the Court from dealing with a matter referred to arbitration, the Court's discretion as to costs is ousted.
Arbitration — Defective Award — Silence on Costs — Remedy
Where an arbitrator's award is silent on costs of the suit that were referred to arbitration, the award is defective. Mere silence does not amount to a negative or equalitarian award of costs. The proper remedy is to apply for remission of the award to the arbitrator for a decision on the point, not to seek an order from the Court.

Legislation cited (5)

  • Civil Procedure (Revised) Rules 1948 Order 45 rule 3(2)
  • Civil Procedure (Revised) Rules 1948 Order 45 rule 13
  • Civil Procedure (Revised) Rules 1948 Order 45 rule 1(1)
  • Civil Procedure Ordinance s.27
  • Indian Acts (Amendments) Ordinance Cap. 2 s.2

Cases cited (2)

  • Marwalia & Co. v Subhakhan (1931) 13 KLR (EACA) 29
  • Hira v Gaya (1932) ILR 54 All 122

Full judgment

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Shah Vershi Devshi and Co. Ltd v Hersfeld (Civil Suit No. 1178 of 1953) [1955] EACA 85 (1 January 1955)
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.