Wakilii

The Microfinance Support Centre Ltd v Kurbstone Investment (U) Limited (Civil Suit No. 0388 of 2024)

High Court · [2025] UGCOMMC 122 · 2025 Preliminary Objection Upheld — Suit Stayed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil suit for breach of tenancy agreement; preliminary objection raised by defendant on grounds of arbitration clause
Decision
Suit stayed and parties referred to arbitration

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Held that where a tenancy agreement contains a dispute resolution clause requiring arbitration for disputes not resolved amicably, and the parties attempted amicable resolution without success, the court lacks jurisdiction and must stay proceedings and refer the matter to arbitration under the Arbitration and Conciliation Act. The court interpreted the dual dispute resolution clauses in the agreement, finding that the arbitration clause applied to the present dispute which had been subjected to unsuccessful amicable negotiations.

Outcome

Suit stayed and parties referred to arbitration

Facts

On 24 July 2023, the parties executed a five-year tenancy agreement for premises at Plot 1 Kanjokya Street, Kisementi, for operation of a café and restaurant, with monthly rent of USD 3,000 payable quarterly. The Plaintiff paid USD 24,240 on 7 August 2023 as combined rental installment and security deposit. Following several meetings and failure to agree on a revised payment plan, the Defendant terminated the agreement. The Plaintiff issued multiple demands for refund of the USD 24,240, which were unheeded. The Plaintiff then instituted this suit for breach of tenancy agreement seeking payment of USD 24,240 in lieu of six-month notice period, USD 24,240 as special damages, general damages, interest and costs. The Defendant raised a preliminary objection that the tenancy agreement contained a dispute resolution clause mandating arbitration.

Issues

  1. Whether this suit is barred by law for want of jurisdiction due to the existence of an arbitration clause in the tenancy agreement.

Orders

  • Suit stayed.
  • Parties directed to resolve the dispute by arbitration in accordance with the dispute settlement clause under the Agreement.

Rules and key headnotes

Preliminary Objections — Nature and Effect — Points of Law
Preliminary objections, if upheld, dispose of a matter at an early stage without delving into substantive merits. They are raised on purely points of law such as jurisdiction, limitation, arbitration clauses, or procedural irregularities. A preliminary objection cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.
Jurisdiction — Fundamental Nature — Absence Disqualifies Court
Jurisdiction is the first test in the legal authority of a court and its absence disqualifies the court from exercising any of its powers. A court cannot entertain a cause which it has no jurisdiction to adjudicate upon.
Jurisdiction — High Court Unlimited Jurisdiction Subject to Statutory Limitations — Arbitration Agreements
The unlimited jurisdiction of the High Court under Article 139(1) of the Constitution is not absolute but subject to statutory limitations, including those created by arbitration agreements. The unlimited jurisdiction of the High Court cannot override the Arbitration and Conciliation Act.
Arbitration Agreements — Interpretation — Dual Dispute Resolution Clauses
Where a contract contains two dispute resolution clauses providing for different mechanisms, the court must interpret the plain language of each clause to determine their applicability. Where one clause provides for arbitration of disputes not resolved amicably and another provides broadly for courts of law for all disputes including existence, validity and termination, the arbitration clause applies to disputes that have been subjected to unsuccessful amicable negotiations.
Stay of Proceedings — Section 5(1) Arbitration and Conciliation Act — Mandatory Referral
Where a matter before court is the subject of an arbitration agreement, the court is obligated under section 5(1) of the Arbitration and Conciliation Act to refer the matter to arbitration unless the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed, or that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.

Legislation cited (4)

Cases cited (7)

  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696
  • 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 v Darwins Ltd [1942] 1 All ER 337
  • Premium Nafta Products Ltd and Others v Fili Shipping Company Ltd and 30 Others [2007] UKHL 40
  • Attorney General v Networth Consults Ltd (Miscellaneous Application No. 1830 of 2022)
  • Elizabeth Nkumbuga v M/s J. General Enterprises Ltd (HCMA No. 78 of 2011)

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

The Microfinance Support Centre Ltd v Kurbstone Investment (U) Limited (Civil Suit No. 0388 of 2024) [2025] UGCommC 122 (5 June 2025)
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.