Wakilii

USAFI Market Vendors Association v Safinet Uganda Ltd and Anor (CAD ARB 68 of 2017)

Tribunal · [2018] UGCADER 8 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for compulsory appointment of an arbitrator arising from a sub-lease agreement dispute
Decision
Application granted; arbitrator to be appointed by tribunal

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The tribunal held that the collaborative nature of alternative dispute resolution clauses imposes mutual obligations on both parties. Where a respondent fails to evidence efforts to maintain mediation prerequisites and adopts a passive approach, this amounts to frustration or abandonment of the mediation step. The tribunal granted the application for compulsory appointment of an arbitrator. On joinder of KCCA, the tribunal found the parties had not incorporated the arbitration clause into subsequent takeover and sale documentation, and directed the applicant to either obtain consent for KCCA's joinder or apply to the High Court.

Outcome

Application granted; arbitrator to be appointed by tribunal

Facts

The applicant (USAFI Market Vendors Association) and first respondent (Safinet Uganda Limited) entered a sub-lease agreement on 18 December 2012 containing an arbitration clause. A dispute arose regarding commission arrears. On 8 November 2013, the second respondent (KCCA) took over interim administration of the market with both parties' consent. On 10 March 2015, KCCA purchased the first respondent's land holding interest. The applicant sought compulsory appointment of an arbitrator. The first respondent opposed on grounds that the applicant had not first attempted mediation as required by the dispute resolution clause. The second respondent opposed on grounds that the applicant was a stranger to the sub-lease agreement and that arbitration was premature.

Issues

  1. Whether the applicant was required to commence mediation proceedings before seeking compulsory appointment of an arbitrator.
  2. Whether the second respondent (KCCA) could be joined as a party to the arbitration proceedings.

Orders

  • Application for compulsory appointment of an arbitrator granted.
  • Arbitrator to be listed in consequential ruling.
  • Second respondent's costs to be borne by the applicant.
  • Applicant and first respondent to bear their own costs.

Rules and key headnotes

Arbitration & ADR — Mediation — Mutual Obligations — Collaborative Commitment
Alternative dispute resolution clauses impose mutual obligations on both parties and embody a collaborative commitment. A respondent cannot sit back and point to shortcomings by the applicant's counsel without evidencing efforts to maintain mediation prerequisites, as this is repugnant to the collaborative ideal entrenched in the Arbitration and Conciliation Act.
Arbitration & ADR — Mediation — Frustration or Abandonment
Inaction on the part of a respondent in maintaining mediation and referral prerequisites amounts to either frustration or abandonment of the mediation step, and it is inequitable for the respondent to subsequently demand compliance with mediation when adopting a passive approach.
Arbitration & ADR — Arbitration Clause — Separate Agreement
An arbitration clause constitutes a separate agreement under Section 16(1)(a) of the Arbitration and Conciliation Act 2004, which must be directly incorporated into subsequent agreements if parties intend the clause to bind successors or assignees.
Arbitration & ADR — Joinder of Parties — High Court Powers
Where joinder of a party to arbitration proceedings is necessary but not governed by the Arbitration and Conciliation Act, an application may be framed to the High Court under its inherent and unlimited powers for orders confirming that joinder is necessary.

Legislation cited (4)

Cases cited (2)

  • Heyman v Darwins [1942] All ER 337
  • B.M. Steels v Kilembe Mines (CAD ARB 10 of 2004)

Full judgment

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

USAFI Market Vendors Association v Safinet Uganda Ltd and Anor (CAD ARB 68 of 2017) [2018] UGCADER 8 (28 March 2018)
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.