Wakilii

UAP Old Mutaul Insurance Uganda Limited and 2 Others v The Insurance Regulatory Authority and Another (Miscellaneous Cause No. 70 of 2021)

High Court · [2021] UGHCCD 98 · 2021 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Judicial review application challenging the decision of the Insurance Regulatory Authority to adjudicate a performance bond dispute rather than referring it to arbitration
Decision
Judicial review application granted; Insurance Regulatory Authority's decision quashed; matter to be referred to arbitration; permanent injunction granted restraining enforcement of the Authority's ruling

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the Insurance Regulatory Authority exceeded its jurisdiction by adjudicating a performance bond dispute instead of referring it to arbitration as required by the arbitration clause in the bond. The court issued certiorari quashing the Authority's decision and a permanent injunction restraining enforcement. The court found that parties who incorporate an arbitration clause recognize arbitration as the effective dispute resolution mechanism and cannot bypass it without justification.

Outcome

Judicial review application granted; Insurance Regulatory Authority's decision quashed; matter to be referred to arbitration; permanent injunction granted restraining enforcement of the Authority's ruling

Facts

Uganda Railways Corporation entered into a 25-year concession agreement with Rift Valley Railways Uganda Ltd requiring a performance bond of USD 3,000,000. The three applicant insurance companies jointly issued a conditional performance bond guaranteeing RVRU's obligations. In October 2019, Uganda Railways filed a complaint with the Insurance Regulatory Authority demanding payment of USD 3,000,000, alleging RVRU had defaulted. The applicants objected, contending the Authority lacked jurisdiction because the performance bond contained an arbitration clause requiring disputes to be referred to arbitration. The applicants also disputed the authenticity of the bond document presented by Uganda Railways and claimed RVRU had confirmed no sums were owed. The Authority ruled it had jurisdiction and decided against the applicants. The applicants then sought judicial review.

Issues

  1. Whether the High Court could hear the judicial review application beyond the 90-day statutory time limit where interlocutory applications required prior determination.
  2. Whether the applicants' affidavits were argumentative and should be struck out.
  3. Whether the applicants had exhausted available remedies given the Insurance Appeals Tribunal was not yet operational.
  4. Whether annexures to affidavits that were not securely sealed offended the Commissioner for Oaths Rules.
  5. Whether the Insurance Regulatory Authority had jurisdiction to adjudicate the performance bond dispute where the bond contained an arbitration clause.
  6. Whether the matter should have been referred to arbitration in accordance with the performance bond terms.

Orders

  • An order for Certiorari issued quashing the decision of the Insurance Regulatory Authority in IRAB/COMP.121/10/19.
  • A declaration made that the Insurance Regulatory Authority exceeded its authority in issuing its decision as the matter should have been referred to arbitration in accordance with the performance bond terms.
  • A declaration made that the dispute between the applicants and Uganda Railways Corporation should have been referred to arbitration in accordance with the performance bond terms.
  • A permanent injunction issued restraining the respondents and/or their nominees, agents or servants from enforcing and executing the ruling passed by the Insurance Regulatory Authority.
  • A permanent injunction issued restraining the Insurance Regulatory Authority from further adjudicating the dispute between Uganda Railways Corporation and the applicants.
  • Costs of the application awarded to the applicants to be paid by the respondents.

Rules and key headnotes

Arbitration Clauses — Binding Effect — Mandatory Referral to Arbitration
Where parties to a contract incorporate an arbitration clause, they thereby recognize arbitration as the effective means of resolving disputes arising under the contract. Courts will always refer a dispute to arbitration where there is an arbitration clause in the contract, and an arbitration clause continues in force unless there is solid reason for displacing it.
Jurisdiction of Administrative Bodies — Ultra Vires Acts — Duty to Refer to Arbitration
Where a statutory body adjudicates a dispute governed by a contract containing an arbitration clause, the body acts outside its jurisdiction and ultra vires. The body should refer the matter to arbitration as provided in the contract rather than adjudicating the dispute itself.
Exhaustion of Remedies — Non-Operational Appeal Tribunal
Where an applicant for judicial review can demonstrate by evidence that the statutory appeal tribunal is not yet constituted and not in operation, the requirement to exhaust existing remedies is satisfied. An applicant cannot be expected to pursue an illusory remedy through a non-existent forum.
Time Limits — 90-Day Rule — Discretion to Hear Beyond Statutory Period
The 90-day time limit for disposal of judicial review applications under Rule 7B of the Judicature (Judicial Review) (Amendment) Rules 2019 is not absolute. Where delay is occasioned by the court's need to address urgent interlocutory applications first, including preliminary objections, the court retains discretion to proceed with the substantive application beyond the 90 days in the interests of justice.
Affidavits — Argumentative Content — Approach to Defects
Courts take a liberal approach to defective affidavits in line with the constitutional directive that rules of procedure should be handmaidens of justice. Where only some paragraphs of an affidavit are argumentative, the court will not strike out the entire affidavit but will disregard the offensive parts and consider the properly drafted portions.
Exhibits and Annexures — Sealing Requirements — Distinction
The word 'exhibit' cannot be used interchangeably with 'annexure'. An exhibit is a document tendered in court during trial to prove a fact; an annexure is a smaller or subordinate thing attached to a principal document. The requirement in Rule 8 of the Commissioner for Oaths Rules that exhibits be securely sealed does not apply to annexures. Failure to seal annexures does not render affidavits incompetent.

Legislation cited (19)

Cases cited (23)

  • Regina v Horseferry Road Magistrates' Court, ex parte Bennet (No.1) [1993] 3 WLR 90
  • Isadru v Aroma & Ors [2018] UGHCLD 3
  • Grace Jones Namulondo and Others v Jone Jones Serwanga Salongo and Others (Miscellaneous Application No. 1 of 2019)
  • MTN V UCC, May 2021
  • Guild Uganda Limited and Anor v Attorney General [2021] UGHCCD 2
  • Nakiridde v Hotel International [1987] HCB 85
  • Re: Bukeni Gyabi Fred (High Court Miscellaneous Application No. 63 of 1999)
  • Hon. Theodore Ssekikubo & 3 Others v The Attorney General & 4 Others (Constitutional Application No. 6 of 2013)
  • Banco Arabe Espanol v Bank of Uganda (Civil Application No. 08 of 1998)
  • Rtd. Col. Dr. Kizza Besigye v Yoweri Kaguta Museveni & the Electoral Commission (Supreme Court Presidential Election Petition No. 1 of 2006)
  • Kasaala Growers Co-operative Society v Kakooza Jonathan & Anor (Supreme Court Civil Appeal No. 19 of 2010)
  • Former Employees of G4S Security Services Uganda Ltd v G4S Security Services Uganda Ltd (Supreme Court Civil Appeal No. 18 of 2010)
  • Leads Insurance Ltd v Insurance Regulatory Authority of Uganda & Anor (Civil Appeal No. 237 of 2015)
  • Amongin Jane Frances Okili v Lucy Akello [2015] UGHC 1
  • Nambowa Rashida v Bavekuno Mafumu, Godfrey Kyeswa & Anor (Election Petition Appeal No. 69 of 2016)
  • Uganda Corporation Creameries Ltd and Anor v Reamaton Ltd (Court of Appeal Civil Appeal No. 44 of 1998)
  • Massa -Vs- Achen [supra] HCB 297
  • Power and City Contractors Ltd v LTL Project (PVT) Ltd (Miscellaneous Application No. 62 of 2011)
  • National Social Security Fund and WH. Ssentongo T/A Ssentongo & Partners v Alcon International Ltd (Civil Appeal No. 02 of 2008)
  • Chartis Uganda Insurance Company Limited v Insurance Regulatory Authority of Uganda & Anor [2013] UGCommC 84
  • Miller v Minister of Pensions [1947] All ER 372
  • Attorney General v Niko Insurance Uganda Ltd (High Court Civil Suit No. 240 of 2012)
  • Wuhan Guoyu Logistics Group Co Ltd & anor -v- Emporiki Bank of Greece SA(2013)

Full judgment

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UAP Old Mutaul Insurance Uganda Limited and 2 Others v The Insurance Regulatory Authority and Another (Miscellaneous Cause No. 70 of 2021) [2021] UGHCCD 98 (13 August 2021)
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.