Wakilii

Uganda National Cultural Centre v Ambitious Construction Company Limited (Miscellaneous Cause 67 of 2023)

High Court · [2024] UGCOMMC 253 · 2024 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside arbitral award following adjudication and arbitration proceedings arising from a construction contract dispute
Decision
Application dismissed; arbitral award enforced; costs to the Respondent

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 dismissed the application to set aside an arbitral award arising from a construction contract dispute. The court held that the application was filed within time because the arbitrator delivered the award on 26th May 2023 (not 5th May 2023) upon payment of fees, having properly extended time under Section 31(1) of the Arbitration and Conciliation Act. The court further held that the arbitral award was not contrary to public policy: the contract was an admeasurement contract where variations in quantity of work done led to changes in the contract price as contemplated by the parties' agreement and Regulations 54 and 55 of the PPDA Regulations. The arbitrator properly considered applicable procurement law and contractual terms, and the award was sustained.

Outcome

Application dismissed; arbitral award enforced; costs to the Respondent

Facts

On 7th August 2017, the applicant (Uganda National Cultural Centre) and the respondent (Ambitious Construction Company Limited) executed a construction contract for renovation of the National Theatre premises for UGX 3,029,323,269 inclusive of VAT. A dispute arose over outstanding sums. The respondent obtained an adjudication award on 4th April 2022 for UGX 1,294,427,629 with 21% interest. The applicant referred the matter to arbitration. Mr. Nelson Nerima was appointed as sole arbitrator by consent on 16th May 2022. The arbitrator concluded the arbitration on 5th May 2023 but withheld delivery of the award pending payment of his fees by both parties. The applicant paid its share on 26th May 2023, upon which the arbitrator delivered the award. On 5th June 2023, the respondent filed HCMC No. 51 of 2023 for recognition and enforcement of the arbitral award. The applicant then filed this application on 21st June 2023 to set aside the award, alleging it contravened public policy by sanctioning a 20.25% increase in contract price (from UGX 3,029,323,269 to UGX 3,642,800,207.6) contrary to Regulations 54 and 55 of the PPDA Regulations.

Issues

  1. Whether the Arbitral Award in Ambitious Construction Company Limited vs. Uganda National Cultural Centre NN/N/254/22/11-2 should be set aside?
  2. What remedies are available to the parties?
  3. Whether the application to set aside was brought within the mandatory 30-day period under Section 34(3) of the Arbitration and Conciliation Act?

Orders

  • Application to set aside the arbitral award dismissed.
  • Final orders in the arbitral award sustained, subject to interest accrued to date.
  • Respondent to enforce the award in Ambitious Construction Co. Ltd vs. Uganda National Cultural Centre NN/N/254/22/11-2 pursuant to Section 36 of the Arbitration and Conciliation Act.
  • Costs awarded to the Respondent.
  • No need to hear High Court Miscellaneous Cause No. 51 of 2023 in light of the court's findings and orders.

Rules and key headnotes

Time for challenging arbitral awards — date of delivery — arbitrator's right to withhold award pending payment of fees
An arbitrator has the right to withhold delivery of an award until full payment of arbitration fees by all parties, and time for challenging the award under Section 34(3) of the Arbitration and Conciliation Act runs from the date the award is actually delivered, not from the date the award was signed or dated.
Extension of time to deliver award — arbitrator's power under Section 31(1) of the Arbitration and Conciliation Act
An arbitrator may enlarge the time within which to deliver an award under Section 31(1) of the Arbitration and Conciliation Act, and where the arbitrator communicates to parties that delivery is subject to payment of fees, the time for delivery is thereby extended until that condition is met.
Grounds for setting aside arbitral awards — conflict with public policy — test and scope
An arbitral award may be set aside as contrary to public policy only if it is inconsistent with the Constitution or other laws of Uganda, is inimical to national interest, or is contrary to justice and morality. Public policy covers fundamental principles widely recognized that should underlie any system of law according to prevailing conceptions in Uganda.
Scope of judicial review — High Court not an appellate court on arbitral awards
A court adjudicating upon the validity of an arbitral award does not function as an appellate court but merely decides upon the legality of the award. The Arbitration and Conciliation Act is very restrictive on how far the High Court can intervene on matters of arbitration.
Construction contracts — admeasurement contracts — variations in contract price arising from quantity of work done
In an admeasurement contract where the final contract price is determined by the quantity of work actually executed, variations in contract price arising from approved and certified quantities of work done do not require formal contract amendment under Regulation 55 of the PPDA Regulations, provided the variations mechanism is contemplated by the contract terms and applicable regulations.
Public procurement — variation and amendment of contracts — interplay of Regulations 54 and 55 of PPDA Regulations
Where parties to a public procurement contract agree that the contract price will vary according to quantities of work done and the variations are processed through interim payment certificates issued by the procuring entity's officials and approved by the project manager, such variations fall within the contractual variation mechanism and do not constitute breaches of Regulations 54 and 55 of the PPDA Regulations.
Interim payment certificates — effect of payment without objection
Where a party makes payments pursuant to interim payment certificates issued by its own officials without objection, that party cannot later challenge those payments as excessive or in breach of contract. Equity aids the vigilant, and objections to interim certificates must be raised before authorizing payment, not months after payment has been made.

Legislation cited (10)

  • Arbitration and Conciliation Act Cap.5 s.34(2)(a)(vii)
  • Arbitration and Conciliation Act Cap.5 s.34(2)(b)(ii)
  • Arbitration and Conciliation Act Cap.5 s.34(3)
  • Arbitration and Conciliation Act Cap.5 s.31(1)
  • Arbitration and Conciliation Act Cap.5 s.36
  • Arbitration and Conciliation Act Rule 13
  • Public Procurement and Disposal of Public Assets (Contracts) Regulations 2014 Reg.54
  • Public Procurement and Disposal of Public Assets (Contracts) Regulations 2014 Reg.55
  • Public Procurement and Disposal of Public Assets Act 2003 s.43
  • Civil Procedure Act Cap.282 s.27(1)

Cases cited (8)

  • Mohammed Mohammed Hamid v Roko Construction Limited (Supreme Court Civil Appeal No. 14 of 2015)
  • Babcon Uganda Limited v Mbale Resort Hotel Limited (Supreme Court Civil Appeal No. 6 of 2016)
  • Fountain Publishers Ltd v Harriet Nantamu and Another (High Court Miscellaneous Application No. 135 of 2011)
  • Pan Afric Impex (U) Limited v Roko Construction Limited (High Court Miscellaneous Application No. 487 of 2010)
  • Roko Construction Ltd v Kobusingye Janet (High Court Miscellaneous Cause No. 22 of 2021)
  • Uganda Development Bank v Rocktrust Construction Limited (High Court Miscellaneous Application No. 85 of 2019)
  • Egerton v Earl of Brownlow [1853] Eng R 885
  • Uganda Development Bank v Muganga Construction Co. Ltd [1981] HCB 35

Full judgment

↓ Download PDF

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

Uganda National Cultural Centre v Ambitious Construction Company Limited (Miscellaneous Cause 67 of 2023) [2024] UGCommC 253 (21 August 2024)
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.