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Uganda Electricity Transmission Company Limited v Solcon E.A Limited (Arbitration Cause 41 of 2024)

High Court · [2025] UGCOMMC 103 · 2025 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitral award under Section 34(2)(b)(ii) of the Arbitration and Conciliation Act
Decision
Application to set aside arbitral award dismissed; parties granted leave to enforce the arbitral award as a decree of court

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed an application to set aside an arbitral award of UGX 403,256,000 in prolongation costs. The applicant argued the award was contrary to public policy because it was based on a non-existent admission. The court held that the arbitrator's finding that certain costs were not disputed did not constitute an admission, but was an interpretation of the contract and evidence. Reviewing this would place the court in an appellate position, which is impermissible under the Arbitration and Conciliation Act.

Outcome

Application to set aside arbitral award dismissed; parties granted leave to enforce the arbitral award as a decree of court

Facts

On 15 March 2019, Uganda Electricity Transmission Company Limited contracted Solcon E.A Limited to complete electro-mechanical works at three substations for UGX 3,881,286,238 inclusive of taxes, with an eight-month completion period. The contract was extended multiple times due to COVID-19 and other factors, with extensions granted on a no-extra-costs basis. By 8 June 2022, more than three years after contract execution, Solcon had not achieved substantial completion and had not extended its Performance Guarantee, which was expiring on 20 June 2022. UETCL called on the Performance Guarantee. Solcon commenced adjudication proceedings, which were later referred to arbitration. The arbitrator awarded Solcon UGX 403,256,000 in prolongation costs relating to salary overheads for personnel retained during project delays. UETCL applied to set aside this portion of the award, arguing it was based on a non-existent admission and was contrary to public policy.

Issues

  1. Whether the arbitral award dated 4th November, 2024, is perverse, premised on a manifest disregard of law, arbitrary, capricious, inconsistent, unsupported by evidence, supportive of unjust enrichment and thus contrary to public policy?
  2. What remedies are available to the parties?

Orders

  • Application dismissed.
  • Parties granted leave to enforce the arbitral award dated 4th November, 2024, delivered by Ms. Ann Namara Musinguzi.
  • Costs of the application awarded to the Respondent.

Rules and key headnotes

Setting Aside Arbitral Awards — Public Policy Ground — Narrow Interpretation Required
The public policy exception under Section 34(2)(b)(ii) of the Arbitration and Conciliation Act must be interpreted narrowly, limited to imperative or mandatory rules from which parties cannot derogate, or else it can be used opportunistically by award debtors as a gateway to review the merits of the award.
Setting Aside Arbitral Awards — Public Policy — Definition and Scope
An arbitral award will be set aside on grounds of inconsistency with public policy if it is shown that the award was inconsistent with the Constitution or other laws of Uganda, whether written or unwritten, or is inimical to the national interest of Uganda, or is contrary to justice and morality.
Judicial Review of Arbitral Awards — Limited Scope — Not Appellate Function
In arbitration, the autonomy of the parties is kept at the highest pedestal. A court adjudicating upon the validity of an arbitral award is not to function as an appellate court, but merely is to decide upon the legality or validity of the arbitral award.
Setting Aside Arbitral Awards — Evaluation of Evidence — Impermissible Ground
Where an application to set aside an arbitral award requires the court to evaluate whether evidence was correctly assessed by the arbitrator, the court would be sitting in an appellate position, which amounts to an illegality under the Arbitration and Conciliation Act.
Enforcement of Arbitral Awards — Time Limits and Procedure
Under Section 36 of the Arbitration and Conciliation Act, where the time for making an application to set aside an arbitral award has expired, or that application having been made has been refused, the award shall be enforced in the same manner as if it were a decree of the Court.

Legislation cited (7)

Cases cited (13)

  • Mbale Resort Hotel Ltd v Babcon Uganda Ltd (High Court Miscellaneous Application No. 265 of 2010)
  • Airtel Uganda Limited v Opportunity Bank Uganda Limited (Arbitration Cause No. 12 of 2023)
  • Kilembe Mines Limited v B.M Steel Limited (High Court Miscellaneous Cause No. 2 of 2005)
  • Bemuga Forwarders Limited v Sany International Development Limited (High Court Miscellaneous Application No. 99 of 2024)
  • Kampala International University v Housing Finance Company Limited (Arbitration Causes No. 38 and 46 of 2024)
  • Lake Oil Uganda Ltd v Don (U) Ltd (High Court Miscellaneous Application No. 685 of 2024)
  • John Okalany v Civil Aviation Authority and Another (High Court Miscellaneous Cause No. 111 of 2015)
  • Cairo Bank Uganda Limited v CADS Ventures Limited (Miscellaneous Cause No. 48 of 2023)
  • Uganda Development Corporation v Rocktrust Contractors Limited (Miscellaneous Application No. 85 of 2019)
  • Parsha International Ltd T/a Champion Bet/Slots v Homebet Limited (Miscellaneous Application No. 598 of 2021)
  • Egerton v Earl of Brownlow [1853] 10 ER 359
  • Cooke v Turner [1845] 60 Eng. Rep. 449
  • Bigala Frediman v Lornah Namuwenge (High Court Civil Suit No. 98 of 2020)

Full judgment

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

Uganda Electricity Transmission Company Limited v Solcon E.A Limited (Arbitration Cause 41 of 2024) [2025] UGCommC 103 (22 May 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.