Wakilii

Sugar Corporation Of Uganda Limited v Kanoblic Group Of Companies Limited (Miscellaneous Application 653 of 1996)

High Court · [1997] UGHC 15 · 1997 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal under Order 46 Rules 1, 7, and 8 of the Civil Procedure Rules seeking to set aside Deputy Registrar's certificate of interest
Decision
Appeal allowed; certificate of interest set aside; garnishee proceedings dismissed; excess payment ordered refunded to Appellant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held: The arbitrator's award awarding interest at 30% per annum from 1 October 1992 until payment in full did not expressly or impliedly authorise compound interest. Interest awarded in arbitration is simple interest unless compound interest is expressly awarded. The Deputy Registrar's certificate of interest dated 1 November 1996 certifying compound interest was set aside. The decretal amount and awarded simple interest had already been paid in full from the security deposited. The Respondent was ordered to refund the excess payment of UGX 8,403,193.

Outcome

Appeal allowed; certificate of interest set aside; garnishee proceedings dismissed; excess payment ordered refunded to Appellant

Facts

Kanoblic Group obtained an arbitration award against Sugar Corporation of Uganda Ltd for UGX 45,475,341 special damages, UGX 10,000,000 general damages, and interest at 30% per annum from 1 October 1992 until payment in full. Sugar Corporation's applications to set aside the award and subsequent appeals were dismissed. Sugar Corporation deposited UGX 130,443,601 as security pending appeal. After the Supreme Court dismissed the appeal, the Deputy Registrar paid this security to Kanoblic in settlement of the decretal amount and interest. Subsequently, on 3 October 1996, counsel for Kanoblic wrote to the Deputy Registrar claiming an additional UGX 62,233,667 based on calculations of compound interest. The Deputy Registrar issued a certificate of interest on 1 November 1996 certifying this amount as due. Kanoblic then commenced garnishee proceedings. Sugar Corporation appealed, arguing the award specified simple interest only.

Issues

  1. Whether the Deputy Registrar's certificate of interest certifying compound interest payable to the Respondent in the sum of UGX 62,233,667 was erroneously issued.
  2. Whether the arbitrator's award awarding interest at 30% per annum implied compound interest or simple interest.
  3. Whether the Appellant had acquiesced to the application of compound interest by failing to raise objection at earlier stages.

Orders

  • Appeal allowed.
  • Deputy Registrar's certificate of interest dated 1st November 1996 set aside.
  • Respondent ordered to refund UGX 8,403,193 to the Appellant.
  • Order of attachment of Appellant's account No. 0150107032 with Bank of Baroda (U) Ltd set aside.
  • Each party to bear its own costs of the Garnishee proceedings and the appeal.

Rules and key headnotes

Arbitration Awards — Interest — Distinction Between Simple and Compound Interest
Where an arbitrator awards interest at a specified rate per annum without expressly stating that the interest is to be compounded, the interest awarded is simple interest and not compound interest.
Arbitration Awards — Interpretation — Implication of Compound Interest
Compound interest cannot be implied in an arbitration award merely because the transaction was commercial in nature and involved bank borrowing that attracted interest. Compound interest must be expressly awarded.
Interest — Certificate of Interest — Powers of Deputy Registrar
A Deputy Registrar's certificate of interest issued on the basis of compound interest calculations where the underlying award specified only simple interest is erroneous and must be set aside.
Acquiescence and Res Judicata — Interest Calculation
Failure to object to the application of compound interest at earlier procedural stages does not constitute acquiescence where compound interest was not explicitly raised as an issue before the court and counsel only discovered the error upon careful review of the award.
Consent — Effect on Interest Calculation
Consent by a party's former counsel to an interpretation implying compound interest subsequent to the making of an arbitration award cannot entitle the judgment creditor to compound interest which was not awarded at the time the award was made.

Legislation cited (7)

Cases cited (2)

  • Patel v Spear Motors Ltd (Civil Appeal No. 4 of 1991)
  • Re Maira (1989) 1 Abb E.R. 229

Full judgment

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Sugar Corporation Of Uganda Limited v Kanoblic Group Of Companies Limited (Miscellaneous Application 653 of 1996) [1997] UGHC 15 (26 February 1997)
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.