Wakilii

Stanlib Arena Holdco and Others v Charles Odere (High Court Civil Suit No. 963 of 2025; Miscellaneous Applications No. 1970, 1971, 2262, 2263, 2264 and 2265 of 2025)

High Court · [2025] UGCommC 1 Application Granted — Suit Dismissed and Referred to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated applications objecting to jurisdiction in a summary suit for debt recovery — applicants sought referral to arbitration, stay of proceedings, and striking out of amended plaint
Decision
Suit dismissed and parties referred to arbitration in accordance with contractual dispute resolution provisions

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division held it lacked jurisdiction over a summary suit for debt recovery where the parties had entered into a valid and binding arbitration agreement. The arbitration clause in the Share Purchase, Subscription and Shareholders Agreement clearly covered all disputes arising from that agreement, including the respondent's claim for repayment of a shareholder loan. Additionally, a separate facility agreement between the 6th applicant and respondent contained an exclusive jurisdiction clause conferring jurisdiction on courts of England. The court dismissed the suit and referred the parties to arbitration.

Outcome

Suit dismissed and parties referred to arbitration in accordance with contractual dispute resolution provisions

Facts

The parties entered into a Share Purchase, Subscription and Shareholders Agreement (SSA) in December 2016 to govern their relationship in a joint venture developing the Arena Mall Project. The 1st applicant and respondent were shareholders in the 2nd applicant company. The 3rd applicant provided credit facility to the 2nd applicant. The 4th and 5th applicants were project development managers. The 6th applicant provided credit facility under a separate Facility Agreement. The respondent initiated Civil Suit No. 963 of 2025 seeking recovery of a USD 400,000 shareholder loan plus interest. After summons were served on the 1st and 2nd applicants, they filed applications seeking referral to arbitration and objecting to jurisdiction. The respondent subsequently filed an amended plaint joining additional applicants without court leave. The SSA contained an arbitration clause providing for resolution of all disputes by arbitration under South African law. The Facility Agreement contained an exclusive jurisdiction clause conferring jurisdiction on courts of England.

Issues

  1. Whether the dispute as between the Applicants and the Respondent should be referred to arbitration.
  2. Whether the dispute as between the 6th Applicant and the Respondent is the subject of an enforceable exclusive jurisdiction and choice of law clause.
  3. Whether this Honourable Court can exercise territorial jurisdiction over the 3rd, 4th, 5th and 7th Applicants.
  4. Whether the amended plaint should be struck out and / or the suit dismissed.
  5. In the alternative, whether the Main Suit ought to be stayed until final determination of Companies Petition No. 26 of 2025.

Orders

  • A declaration that this Honourable Court has no jurisdiction to entertain the suit due to the fact that the disputes between the Applicants and the Respondent are the subject of valid and binding arbitration agreement and are referred for resolution through final and binding arbitration.
  • Civil Suit No. 963 of 2025 is hereby dismissed having been referred to arbitration in accordance with the dispute resolution provision under the agreement.
  • Costs of this application are awarded to the applicants.

Rules and key headnotes

Arbitration Agreements — Enforcement — Referral of Disputes to Arbitration under Section 5 of Arbitration and Conciliation Act
Where parties have entered into a valid arbitration agreement, the court must refer the matter to arbitration unless it finds the arbitration agreement is null and void, inoperative, or incapable of being performed. The High Court's unlimited original jurisdiction under Article 139(1) of the Constitution is not unfettered and may be circumscribed by statutory provisions recognizing arbitration agreements under the Arbitration and Conciliation Act.
Arbitration Agreements — Scope of Arbitration Clauses — Disputes Arising from Shareholder Agreements
An arbitration clause stating that any dispute, controversy, or claim arising from or connected with an agreement, including those regarding existence, validity, or termination of the agreement and any non-contractual disputes, shall be referred to arbitration is sufficiently broad to encompass claims for repayment of shareholder loans governed by the underlying agreement. Such claims constitute contractual rights arising from the shareholders' agreement and fall within the scope of the arbitration clause.
Arbitrable Disputes — Statutory Claims and Arbitration — Company Law Disputes
The fact that statutory power is given to the court to grant relief does not mean that an arbitrator to whom a dispute is properly agreed to be referred does not have similar power. Where parties have entered into a valid arbitration agreement, the arbitrability of disputes is not defeated by the fact that the dispute involves statutory rights or remedies under the Companies Act, provided the arbitration agreement does not violate public policy.
Pathological Arbitration Clauses — Interpretation — Favour Arbitration Principle
The modern trend in international arbitration law is to apply an interpretation that favours arbitration and gives meaning and effect to the arbitration clause even if the clause appears potentially pathological. Where the parties have evinced a clear intention to settle any dispute by arbitration, the court should give effect to such intention, even if certain aspects of the agreement may be ambiguous, inconsistent, incomplete, or lacking in certain particulars, so long as the arbitration can be carried out without prejudice to the rights of either party.
Exclusive Jurisdiction Clauses — Enforcement — Contractual Choice of Forum
Where parties have bound themselves by an exclusive jurisdiction clause in their contract, effect should ordinarily be given to that obligation unless the party suing in the non-contractual forum discharges the burden cast upon them by showing strong reasons for suing in that forum. The High Court may decline to exercise jurisdiction and hold the parties to their bargain of having disputes determined by the agreed foreign courts.
Jurisdiction — Jurisdiction as Threshold Issue — Contractual Limitations on Court Jurisdiction
Jurisdiction is the first test in the legal authority of a court and its absence disqualifies the court from exercising any of its powers. Where the language of an arbitration clause or exclusive jurisdiction clause places parties' disputes outside the ambit of the court, it can only be concluded that the parties elected to remove themselves from the jurisdiction of the court into that of an arbitral tribunal or foreign forum. Such contractual provisions are valid and binding.

Legislation cited (8)

Cases cited (12)

  • Koboko District Local Government v Okujjo Swali (Miscellaneous Application No. 0001 of 2016)
  • Babcon (U) Ltd v Mbale Resort Hotel (Civil Appeal No. 87 of 2011)
  • Heyam and Another Vs Darwins Ltd [1942] 1 All ER 337
  • Fulgensius Mungereza v Africa Central (Civil Appeal No. 34 of 2001)
  • Xsabo Power Limited and Others v Great Lakes Energy Company NV (High Court Miscellaneous Application No. 1567 of 2022)
  • Smile Communications Uganda Ltd v ATC Uganda Ltd and Another (High Court Application No. 0004 of 2022)
  • Premium Nafta Products Ltd and Others Vs Fili Shipping Company Ltd and 30 Others [2007] UKHL 40
  • Insigma Technology Co. Ltd V Alstorn Technology Ltd [2009] SGCA 24
  • Uganda Projects Implementation and Management Centre v Uganda Revenue Authority (Constitutional Appeal No. 2 of 2009)
  • Huadar Guangdong Chinese Co Ltd v Damco Logistics Uganda Limited (High Court Civil Suit No. 4 and 5 of 2012)
  • Uganda Telecom v Rodrigo Chacon t/a Andes Alps Trading (High Court Miscellaneous Application No. 337 of 2008)
  • Bank One Ltd v Simbamanyo Estate Ltd (High Court Miscellaneous Application No. 1302 of 2022)

Full judgment

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Stanlib Arena Holdco and Others v Charles Odere (High Court Civil Suit No. 963 of 2025; Miscellaneous Applications No. 1970, 1971, 2262, 2263, 2264 and 2265 of 2025) [2025] UGCommC
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.