.

HIGH COURT RE-AFFIRMS THE FACT THAT PARTIES WHO SIGN

BINDING ARBITRATION AGREEMENTS ARE IN PRINCIPLE HELD BY
ITS TERMS.
Security Group Uganda Limited v Finasi-Ishu Construction SPV-Limited (Civil Suit 829 of
2023) [2024] UGCommC 40 (22 March 2024)

BRIEF FACTS.
The defendant raised a preliminary objection under Sections 5, 9, and 71 of
the Arbitration and Conciliation Act, Cap.4 contending that the suit contract was subject
to an arbitration clause and thus prayed that the suit be referred for arbitration whereas
the plaintiff asserted that the High Court has unlimited jurisdiction to hear the matter
RESOLUTION.
Whilst acknowledging the fact that the High Court has unlimited Jurisdiction pursuant to
Article 139 of the 1995 Constitution and S.14 of the Judicature Act, the learned Justice
noted that this jurisdiction has to conform with other written laws and procedures. (Also
see the case of Uganda Revenue Authority Vs Rabbo Enterprises (U) Ltd & Anor S.C.C.A
No.12 of 2004 [2017] UGSC 20,). The learned Justice further contended that Section 9
of the Arbitration and Conciliation Act, limits the extent of the Court’s intervention in
matters of arbitration by stipulating that except as provided in the Act, no Court shall
intervene in matters governed by this Act and that the unlimited original jurisdiction of this
court cannot override this act. Also see the case of Babcon Uganda Ltd Vs Mbale
Resort Hotel Ltd, C. A. Civil Appeal No. 87 of 2011)
HOLDING.
Pursuant to Section 5 (1) of the Arbitration and Reconciliation Act, the learned Justice
referred the matter for arbitration and further dismissed the suit citing the fact that
Arbitration cannot proceed along with litigation, save within the necessary statutory
exceptions. In the same premise, it’s also vital to note that the learned Justice also
asserted that a stay of the suit serves no purpose since the parties can only come back
to Court in the manner provided for in the Arbitration and Conciliation Act.
RATIO DECIDENDI / REASONING OF COURT
The learned Justice contended that Parties who sign a binding arbitration agreement are
in principle held by its terms. The court also deduced the parties' intention via clause 16
of the contract where they referred to the applicability of the Arbitration and Conciliation
Act which gives reference to the appointment of the arbitrators and the related processes.
And further held that clause 16 of the Contract cannot be said to be hopeless so as not
to give it effect in the circumstances.
Mr. Gukiina Patrick M. is a multi-jurisdictional lawyer, author, and Researcher.
gukiimeni@gmall.com : +256-784-216-459