Wakilii

Trust Builders & Civil Engineers Limited v Kayonza Growers Tea Factory (Civil Suit No. 1143 of 2023)

High Court · [2025] UGCOMMC 305 · 2025 Matter Referred to Arbitration AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection challenging court jurisdiction based on arbitration clause in contract
Decision
Suit dismissed and dispute referred to arbitration

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

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

The High Court held that where parties have freely negotiated and included an arbitration clause in their contract, the court lacks jurisdiction to entertain the dispute and must refer the matter to arbitration under the Arbitration and Conciliation Act. The court found no exceptional circumstances under section 5(1) of the Act to justify intervention. The suit was dismissed and the dispute referred to arbitration, with each party bearing own costs.

Outcome

Suit dismissed and dispute referred to arbitration

Facts

The plaintiff contractor sued the defendant tea factory for UGX 217,714,609 allegedly due under two payment certificates for civil works completed under a contract executed on 29 August 2018. The plaintiff claimed it had fully performed its obligations including submission of payment claims. The defendant denied liability, alleging the plaintiff failed to rectify defective works during the defects liability period as required under the contract. The defendant counterclaimed for UGX 26,961,537 for unpaid utilities and diesel. The defendant raised a preliminary objection challenging the court's jurisdiction based on an arbitration clause (Clause 19.2.2) in the contract requiring disputes to be referred to arbitration after unsuccessful mediation. The plaintiff argued the arbitration clause was inapplicable because the contract had been fully performed and practical completion certified.

Issues

  1. Whether the suit should be referred to arbitration pursuant to the arbitration clause in the contract?
  2. What remedies are available to the parties?

Orders

  • The dispute between the parties is referred to arbitration, which shall be governed by the Arbitration and Conciliation Act Cap 5.
  • Civil Suit No. 1143 of 2023 is hereby dismissed.
  • Each party shall bear own costs.

Rules and key headnotes

Arbitration & ADR — Court Jurisdiction — Effect of Arbitration Clause — Mandatory Referral to Arbitration
Under section 9 of the Arbitration and Conciliation Act Cap 5, a court shall not intervene in matters governed by an arbitration agreement except where the agreement is null and void, inoperative, or incapable of being performed, or where there is no dispute between the parties with regard to matters agreed to be referred to arbitration.
Contract Law — Freedom of Contract — Binding Effect of Arbitration Clauses
Where parties have freely negotiated and executed a contract containing an arbitration clause, courts will hold parties to their contractual bargain and refer disputes to arbitration unless sufficient reasons are shown to depart from the agreement.
Arbitration & ADR — Burden of Proof — Establishing Exceptions to Arbitration
The party seeking to avoid arbitration bears the burden of proving that exceptional circumstances exist under section 5(1) of the Arbitration and Conciliation Act, such as that the arbitration agreement is null and void, inoperative, incapable of being performed, or that there is no dispute between the parties.
Civil Procedure — Preliminary Objections — Jurisdiction — Arbitration Clauses
A preliminary objection to jurisdiction based on an arbitration clause will succeed where the contract contains a dispute resolution clause requiring arbitration and no exceptional circumstances under the Arbitration and Conciliation Act are established.

Legislation cited (6)

Cases cited (9)

Full judgment

↓ Download PDF

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

Trust Builders & Civil Engineers Limited v Kayonza Growers Tea Factory (Civil Suit No. 1143 of 2023) [2025] UGCommC 305 (31 July 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.