Court name
Commercial Court of Uganda
Judgment date
24 November 2011

Soroti Joint Medical Services Ltd v Sino Africa Medicines & Services Ltd (Miscellaneous Application-2011/452) [2011] UGCommC 109 (24 November 2011);

Cite this case
[2011] UGCommC 109

 

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 452 OF 2011

(ARISING FROM CAD/ARB NO 4 OF 2011)

(COMMERCIAL DIVISION CIVIL SUIT NO 415 OF 2011)

SOROTI JOINT MEDICAL SERVICES LTD… APPLICANT/RESPONDENT

VERSUS

SINO AFRICA MEDICINES AND HEALTH LTD… RESPONDENT/CLAIMANT

BEFORE HONOURABLE MR JUSTICE CHRISTOPHER MADRAMA

RULING

The applicant's lodged an application in this court under section 34 (2) (b) (i) and (ii), 34 (2) (3) of the Arbitration Act and rule 13 of the Arbitration Rules for orders that a CT scan and fluoroscopy equipment worth US $ 594,983 was illegally imported, installed and commissioned and that the claim founded on the two equipments cannot be settled by arbitration under the laws of Uganda; that the sum of US $ 594,983 being the cost of illegally imported equipments be excluded from the contract sum and, therefore the legally enforceable contract consideration should be adjusted to US $ 424,711.8 from US $ 1,019,694.8; that 5% and 25% payment provided for under the contract should exclude the value of the illegally imported CT scan and fluoroscopy; an order that the respondent cannot claim for any profit and interest arising from the use of the CT scan and fluoroscopy illegally imported without authorisation permit; the arbitration court re-computes the arbitral award less costs of equipments illegally imported, installed and commissioned and that it is just, fair and equitable that the orders sought are granted with costs.

The grounds of the application are that:

a)      The applicant executed a contract with the respondent for the supply of assorted medical equipments including a fluoroscopy and the CT scan equipment.

b)      The Atomic Energy Act requires that before importing, installing and commissioning of the equipments, the supplier must obtain a clearance permit from Uganda Atomic Energy Commission.

c)      The arbitrator noted the illegality in the importation, installation and commissioning of the equipment but ignored the same and proceeded to make awards on equipments illegally imported, installed and commissioned.

The application is supported by the affidavit of Elijah Wakamuke a director in the applicant/respondent company. He avers that on 26 June 2009 Soroti Joint Medical Services Ltd, the applicant herein executed a contract with Sino Africa Medicines and Health Ltd. An addendum to the contract was executed o the 1 October 2009 for the supply of assorted medical equipments including a fluoroscopy and CT scan. The equipments was imported and sold to the applicants without notification provided for under the terms of the contract. When the team from Sino Africa Medicines and Health Ltd made installed the CT scan, Dr Elijah Wakamuke is averred to have advised them and made remarks in the installation report that the Atomic Energy Commission should be involved in verifying the equipment. But the respondent rejected this advice because the equipment had been cleared by the Uganda National Drug Authority. Thereafter the respondent made a claim against the applicant before an arbitrator and an award was made on the 15th day of July 2011. The award in paragraph 2 of page 28 shows that the arbitrator agreed with counsel for the applicant herein that under the Atomic Energy Act the fluoroscopy, and the CT scan equipment could only be, imported, sold installed and commissioned with authorisation duly issued under the Act. In the absence of such an authorisation permit, the importation and installation of any equipment which emits atomic energy is prohibited. Consequently the supply and installation of the CT scan and fluoroscopy machines is illegal. The arbitrator in computing 70% of the award subtracted only US $ 416,488.1 being the cost of the CT scan and fluoroscopy instead of deducting the full amount for the CT scan and fluoroscopy being US $ 594,983. According to item 28 on the quotation the two machines were illegally imported and court cannot enforce illegal contracts. The arbitrator proceeded to charge 30% on the CT scan and fluoroscopy and yet the two machines would not have attracted any charge because they were illegally imported into Uganda without authorisation permit from National Atomic Energy Commission. The Arbitrator found on page 29 of the award, that the applicant is liable for the payment of a balance of US $ 416,488.1 being 70% of the CT scan and fluoroscopy upon securing a permit. Because the CT scan and fluoroscopy were imported illegally, their full values should be excluded from the contract sum and on computing the 30% amount due on notification, the full amount due was paid. Because the CT scan fluoroscopy were imported, installed and commissioned illegally, all the interest and charges levied on them should be waived and the sum paid by the applicant prior to the importation be refunded and applied to settle the legally accepted outstanding amounts under the contract.

On the other hand Messrs Sino Africa Medicines and Health Ltd, the respondent herein cross objected to the award and in the same cross objection opposed the applicant’s application to vary the terms of the award in a reply. In the cross objection they aver that:

1.      The Centre for Arbitration and Dispute Resolution should render an opinion as friend of court over matters raised in miscellaneous application number 452 of 2011. In the alternative;

2.      Issues raised in MA No 452 of 2011 were not raised before the arbitrator for determination, and cannot be raised before this honourable court for determination.

3.      The order of the arbitrator in reducing the disbursement under item 83 all through to 91 of the claimant’s Bill of costs be set aside.

4.      Item 83 all through, 91 of the claimants Bill of costs be allowed as presented by the applicant/respondent. In the further alternative;

5.      Issues raised in MA No. 452 of 2011 be referred back to the arbitrator for determination.

The grounds upon which the cross objection and the reply to the application are both contained in the affidavit of Kong Dong Sheng and are that:

1)       The applicant is raising issues that were not in the agreement of the sale/purchase of an assortment of medical equipment dated 26 June 2008, signed between the parties and gives rise to arbitration CADE/ARB of 2011.

2)      The instant application raises issues that were never in trial before the arbitrator.

3)      The respondent having used the machines is estopped from setting up an illegality and or taking advantage of their own wrong as this will amount to unjust enrichment.

4)      No allusion has been made by the respondent to any specific legislation, rendering the impossibility and or the subject matter void, for having been determined by an arbitrator.

5)      In the alternative if the court finds the issues raised by the applicant of merit, the award be returned to an arbitrator to determine the same.

6)      The applicant did not seek correction and interpretation of the award.

7)      In the alternative this is a novel application raising new matters not pleaded, not covered by the issues for determination by the arbitrator at a settling said stage, requiring the Centre of Arbitration and Dispute resolution render an opinion as a friend of court.

8)      The arbitrator was functus officio in reducing the disbursement and items 83 all through to 91 of the claimants Bill of costs by half.

9)      This just, fair and equitable that and arbitrator be appointed in order that the dispute between the applicant and the respondent is expeditiously resolved.

The affidavit of Kong Dong Sheng the managing director of the Respondent/Claimant Company basically repeats and confirms the grounds in the cross objection and there is no need to repeat these grounds here. In rejoinder Dr Elijah Wakamuke, avers that the misinformation about the issue of installation and commissioning of the equipment was pleaded under paragraph 6 of the written statement of defence and counterclaim. He further repeats that the contents of the arbitral award at page 28 where the arbitrator noted that none of the parties obtained the required permit and that they did not get any clearance from the Atomic Energy Commission.

The respondents filed written submissions on 9 November 2011 while the applicant filed his submissions on 14 November 2011.

The Respondent/cross objector had filed written submissions with their cross examination and the parties at the hearing agreed to file written submissions. Ordinarily submissions are commenced by the plaintiff/applicant. In this case they were commenced by the objector. The Applicant did not object to this deference with the usual procedure. The rules for address of court at the end of the evidence in chief are governed by order 18 of the Civil Procedure Rules. As far as production of evidence is concerned the plaintiff has a right to begin under order 18 rules 1. However in this case evidenced is by affidavit and pleadings were closed. Order 18 rule 2 (1) envisages a trial by Viva Voce evidence and the plaintiff/applicant has a right to led that adduce that evidence. Thereafter the defendant/respondent adduces evidence and may then address the court general (Submit). In cases in which evidence is adduced by the party beginning only (the Plaintiff/applicant), the party beginning shall have no right of reply. (See order 18 rule 2 (3). The end result is that the procedure adopted complies with the rules as both parties object to the award for different reasons. In any case parties may adopt a procedure which is acceptable and not prejudicial to any of them. In Iron and Steelwares Ltd v. C.W. Matyr & Co. [1956} 23 EACA 175 AT 177, the East African Court of Appeal held that the High Court has discretion to waive the strict application of order 16 rules 2 (which is now order 17 rule 2 of the revised Civil Procedure Rules) on who has the right to address the court first and the right of rejoinder/reply. In waiving the strict application of the rules the court noted that procedural rules are handmaidens of justice. In accordance with the order of filing submissions and replies, I will consider the respondent’s submissions first and thereafter the reply thereto of the Applicant.

Submissions of Counsel for the Respondent/Cross - Objector

In his written submissions, the respondent counsel addressed court on the cross objection to the application and replied to the case of the applicant as disclosed in the applicants application and supporting affidavits.

Counsel for the respondent summarised the applicant’s case and the respondent’s objection and reply which I do not need to reproduce here. As far as the merits of the respondents case is concerned, counsel submitted as follows:

Firstly, the respondent contends that the applicant has raised issues which were not in the agreement of sale/purchase of an assortment of medical equipment dated 26th of June 2008 and signed by the parties which gave rise to arbitration CAD/ARB 4 of 2011. It is the contention of the respondent that the applicant seeks the court to find allegedly that the two equipments namely the CT scan and fluoroscopy were illegally imported, installed and commissioned and that the claim founded on the two equipments cannot be settled by arbitration under the laws of Uganda. The respondent contends that at pages 5.6 to 5.23 of the record of arbitration the agreement of sale/purchase of an assortment of medical equipment and an addendum thereto, the matters being raised were nowhere referred to in the agreement or issues raised by the applicant and agreed upon by the parties. Secondly at page 5.12 of the record of arbitration (paragraph 8.1) the parties agree to have any disputes arising out of the agreement and incapable of amicable resolution referred to arbitration. The applicant having submitted to arbitration, cannot now turn around, and seek that a portion of the agreement should not be settled by arbitration. He contended that the applicant’s application is merely a decoy to delay making payment under the purchase agreements referred, which it was in default of honouring and denying the respondent from enjoying the fruits of the award in arbitration. The applicant seeks that a sum of USD 594,000 and to be excluded from the agreement, whilst the applicant admitted under prayer/order number 3 placing an order for the two equipment to its use. The applicant seeks that no profit/interest should be claimed arising from the use of the equipment.

That this honourable court was referred selectively to section 28 (5) of the arbitration and conciliation act cap 4 which provides:

"(5) In all cases, the arbitral tribunal shall decide in accordance with the terms of the particular contract and shall take into account the usages of the trade applicable to the particular transaction".

Counsel referred to section 28 (4) of the same act and it provides:

"(4) The arbitral tribunal shall decide on the substance of the dispute according to considerations of justice and fairness without being bound by the rules of law, except if the parties have expressly authorised them to do so."

The parties are bound by the agreement of sale/purchase of medical equipment and the addendum entered into on 26 June 2009 and first October 2009 respectively. This constitutes what the parties expressly authorise the arbitral tribunal to adjudicate upon and nothing outside this (Found at pages 2.2 to 2.20 of the record of arbitration). The arbitral tribunal in its adjudication was bound by the issues/questions of law raised by the parties for determination. Counsel contended that the matters raised in the agreement of sale/purchase of medical equipment and the addendum entered into on 26 June 2009 and 1st of October 2009 respectively, were determinable by arbitration and therefore the arguments raised by the applicant under section 34 (2) (b) (1) cited below are not available to the applicant.

            "34. Application for setting aside arbitral award.

            (2) An arbitral award may be set aside by the court if –

            (b) the court finds that –

(i) the subject matter of the dispute is not capable of settlement by arbitration under the laws of Uganda; or…"

Counsel submitted that the respondent has shown through affidavit in reply of Mr Kong Dong Sheng dated 12th of September 2011 paragraphs 11 and 12, that the respondent had the required legal authorisation; a licence and National Drug Authority authorisation – annexure X1 and X2 to dealt in the CT scan and fluoroscopy. The entire sum founded upon the CT scan and fluoroscopy in possession and use by the applicant is therefore due and owing. Counsel contended that the possession of the necessary legal authorisation was to guarantee public safety and ensure that no harm was meted on society. That the respondent did not waive its right to seek rectification and or setting aside the award as they have an objection lodged before this honourable court for determination. The objection is governed by chapter 4 of the laws of Uganda.

Secondly the issues raised by the applicant were not before the arbitrator for determination. Counsel referred to pages 9.2 and 9.32 of the record of arbitration for the conclusion that the applicant did not deem it necessary to raise the matters/issues in this application before the arbitrator for determination. Consequently he contended that it could not be raised at this stage as it would greatly prejudice the applicant. Counsel also referred to the party undertaking for the conduct of arbitration proceedings at page 4.1 to 4.3 of the record of arbitration that it cannot call evidence on the new matter now raised by the applicant. Pleadings having been closed, the evidence having been tendered and closed by witness statements of both parties. He referred to the case of Odd Jobs versus Mubia (1970) 1 EA 476 Court of Appeal at Nairobi, it was held that the court may base its decision on issues not pleaded if it appears from the course followed at the trial that the issue had been left to the court for decision; and further that on the facts the issue had been led for decision by the court as the advocate for the appellant led evidence and addressed the court on it. It was the duty of both the court and advocates to ensure that issues are framed. Secondly counsel referred to Lord Atkin in Bell versus Lever Brothers Ltd (1) [1932] AC 161. In that case the trial judge left to the jury the question as to whether there had been a mutual mistake on the part of both parties to an agreement to which the action related; the pleadings having, however, alleged merely a unilateral mistake. At page 216 Lord Atkin stated:

"In these circumstances the judge on a trial with a jury has without consent of the parties no jurisdiction to determine issues of fact not raised by the pleadings; nor in my opinion would a general consent to determine issues not decided by the jury include a power without express further consent, after the jury had been discharged to amend the pleadings so as to raise further issues of fact."

He contended that the case of Odd Jobs versus Mubia is distinguishable from the circumstances of the respondent in the instant matter. The applicant now pleads illegality, and this would need the respondent to make a formidable defence of fact and law too.

Thirdly the respondents counsel submitted that this court has not been shown any impediment, in the law preventing arbitration. No allusion has been made by the respondent to any specific legislation, rendering the impossibility and/or the subject matter void, for having been determined by an arbitrator.

The Public Service (Negotiating Machinery) Act cap 289 under section 23 thereof specifically provides that the Arbitration and Conciliation Act does not apply to any proceedings, agreement or award under cap 289.

Fourthly the respondent having used the machines is estopped from setting up illegality and or taking advantage of its own wrong as this will amount to unjust enrichment. The rule is that "he who seeks equity should do so with clean hands". In the KIG Bar Grocery and Restaurants Ltd versus Gatabaki and another [1972] 1 EA 503 the court of appeal at Nairobi held that equitable relief should not be granted to a party who does not come to the court with clean hands. As far as the contention of the applicant that "no profit or interest should be claimed by the respondent arising from the use of the two equipment" is concerned the applicant admits having placed the two equipment in use and is therefore drawing a profit from it. On the other hand it is asking the court to make an order that the profit and interest in consequence of the use of the equipment should not be recovered by the respondent. He contended that these amounts to "appropriation and reprobation" and or "blowing hot and cold" and or "having your cake and eating it". Counsel relied on the principle of appropriation and reprobation as set out in the dissenting judgement of Greer Lord Justice in the Bartram versus Evans (1936) 1 KB 202 at page 211:

"It was put by one of my brethren on the ground that a man is not entitled to reprobate that which he has already approbated. In my view, that principle has no application to this case, because it is based on this, that a man may not one moment take an advantage of some agreement on some fact and at a later moment when it suits him reprobate that which he has approved".

He further contended that the respondent/claimant has shown that it was in possession of a valid authorisation – a licence issued by the Atomic Energy Control Board under the Atomic Energy (Ionising Radiation Protection) (Standards) regulations statutory instrument 143 – 1 and the authorisation of the National Drug Authority. He submitted that the Atomic Energy (Ionising Radiation Protection) (Standards) of regulation SI 143 – 1 are still in force pursuant to section 75 (2) of the Atomic Energy Act No 24 of 2008.

            "75.Repeal.

            (1) The Atomic Energy Act (cap. 143) is repealed.

(2) any statutory instrument made and the Atomic Energy Act (cap 143) repealed under subsection (1) and which is in force immediately before the commencement of this Act, shall remain in force, so far as it is not inconsistent with this Act, until it is revoked by statutory instrument made under this Act."

Counsel submitted that regulation 31 (1) of the Atomic Energy (Ionising Radiation Protection) (Standards) regulations under section 2 which deals with interpretation of the term "board" to mean "the Atomic Energy Control Board". Further submitted that the applicants contention that annexure X1 is not valid for having been issued by the Atomic Energy Control Board and not the Atomic Energy Council has no merit, is embarrassing and a manifestation of the applicant not addressing its mind to law and the same should be dismissed with costs.

Fifthly counsel contended in the alternative that if the court finds the issues raised by the applicant to have merit, the court should refer the award to an arbitrator to determine the same. This is because the matters raised by the applicant were not in the agreement executed between the parties and were never raised at the trial before the arbitrator and the same could be submitted as specific issues for determination before the arbitrator at the cost and peril of the applicant.

Sixthly, the applicant did not seek correction and interpretation of the award. The applicant did not explore the first alternative provided under section 33 of the Arbitration and Conciliation Act which leads to the clogging of the honourable courts dairy. Counsel further made reference to the party undertaking in the record of arbitration at page 4.2, specifically day 64 – 70.

Seventhly and in the alternative counsel submitted that this is a novel application raising new matters not pleaded, not covered by the issues for determination by the arbitrator at a settling side stage, requiring the Centre for Arbitration and Dispute Resolution to render an opinion as a friend of court. He contended that it was a fit and proper matter for an order to refer the matter to the Centre for Arbitration and Dispute Resolution.

Eighthly the arbitrator was functus officio in reducing the disbursement under items 83 all through to 91 of the claimants bill of costs by half. Counsel further defined the term "functus officio".

He submitted that the arbitrator's order was to the effect that the claimant is also awarded costs of the arbitration. And having awarded all the costs of the arbitration, the arbitrator would not now reduce disbursement costs by half, as he did in the taxation ruling. Counsel referred at page 10.49 of the record of arbitration specifically at page 10.5 to paragraph 11 where the arbitrator ruled that:

"on the disbursements, the claimant having succeeded in part, the arbitral tribunal will reimburse the claimant in half on items 83 – 91…"

He therefore submitted that the arbitrator was functus officio and therefore his decision is erroneous and moved the court to reverse this decision and awards the full amount to the respondent on items 83 – 91. He prayed that I dismiss the applicants application with costs and that the court be pleased to grant the respondents orders/prayers on the cross objection.

Submissions of the Applicant’s Counsel:

The applicant counsel in reply to the respondent's written submissions and in support of the application filed his written submissions on the 14th of November 2011.

The gist of the written submissions relies on the affidavits of Dr Elijah Wakamuke a director in the applicant company in support of the applicant’s application. The applicant case is that it is dissatisfied with the portion of the award of the arbitrator at page 28 of the award where the arbitrator in his ruling after pronouncing himself that the CT scan and the fluoroscopy was installed and commissioned in breach of section 32 of the Atomic Energy Act and then proceeded to exclude part of the costs of the two equipments from the claim.

The cost of the CT scan is 482,660 USD and cost of the fluoroscopy is USD 112,323. Counsel contended that after having pronounced himself on the illegality of the equipment the Arbitral Tribunal should have deducted US $ 504,983 being the illegal part of the contract which could not be enforced. The arbitrator in computing the 30% and the 70% pay made his computation including the value of the CT scan and the fluoroscopy.

The applicant’s counsel first referred to the cross objection of the respondent filed on the 12 September 2011 and then dealt with the reply to the applicant’s application.

After summarising the Respondents cross objection and reply to the applicant’s application, the applicants counsel contended that in the agreement between the parties dated 26th June 2008 clause 2.1 .2 raises issues of payment prior to installation, and clause 2.1.3 raises issues of installation and commissioning of the equipments in order for payments to be remitted. From the above clauses counsel’s submission is that installation and commissioning was an issue in the contract and was conditional in the enforcement of the contract and in determining when payment is due. When the above activities are being executed, it was prudent that they were done legally under the laws of Uganda.

Under clause 9.1 of the contract dated 26th of June 2008 and marked as annexure "A" the contract is construed in accordance with the laws of Uganda. The purpose of regulating the import, installation and commissioning of equipment which radiate atomic energy is to protect the health of the unsuspecting citizens of Uganda. In line with the rationale of the law, counsel contended that it is a crime to import, install, and commission such equipment without doing environmental impact assessment, advertising in the Gazette and getting the opinion of the persons whose health are likely to be affected by the installation of the equipment. He contended that this was a matter of life and death and must be enforced without any reservation whatsoever.

On the second issue that the issues raised by the applicant were not before the arbitrator for determination, counsel for the applicant submitted that the issue was before the arbitrator under issue numbers 4 on whether or not annexure "A" in the arbitration court being the contract dated 26th of August 2008 was varied and also issue number 1 on whether or not the respondent was in breach of contract for non-payment. All the above issues visit installation and commissioning as the basis for payments. Consequently he contended that the issue of illegality was embedded in the two issues above and it was the key determinant of all the issues raised. This explains why the arbitrator at page 28 deliberated on them and proceeded to exclude part of the payment for the CT scan and the fluoroscopy.

In reply to the third issue that the applicant has not been shown any impediment in the law preventing the arbitration, counsel submitted that under section 28 (5) of the Arbitration and Conciliation Act and in all cases, the arbitral tribunal shall decide in accordance with the terms of the particular contract and shall take into account the usages of the trade applicable to the particular transaction. Under section 34 (1) of the Arbitration and Conciliation Act an application for setting aside an arbitral award can be made where the subject matter of the dispute is not capable of settlement by arbitration under the laws of Uganda. He contended that the Atomic Energy Act being the law of Uganda makes any award on the CT scan and fluoroscopy based on the findings of the arbitrator at page 28 of the arbitral award illegal under this section. The implementation of the contract was prejudicial to public safety and harmful to the society.

On the fourth issue counsel submitted that the contract may be lawful in its formation but performed by the parties in an illegal manner. Such a contract will become unlawful and this is illustrated in the case of Anderson versus Daniel (1954) 1 KB 138; Archibald (Freitage page) Ltd versus Spanglett Ltd (1961) 1 All ER page 417. Courts will never enforce an illegal contract in the sense of ordering a party to do something which is unlawful or contrary to public policy.

On the fifth issue raised if court finds that the issues raised by the applicant have merit and that the award be returned to the arbitrator to determine the same, the applicants Counsel submits that under the Arbitration and Conciliation Act section 34 (4) on the request of the party court can suspend proceedings and give the arbitral tribunal time to resume the arbitral proceedings or to take such other actions as in the opinion of the arbitral tribunal will eliminate the ground for setting aside the arbitral award. In light of the above he prayed that the matter can still be submitted to the arbitral tribunal for reconsideration. Counsel further referred to section 38 (2) of the Arbitration and Conciliation Act on how court resolves matters of law arising from arbitration or to confirm, vary or set aside the arbitral award or refer the matter back to the arbitral tribunal for reconsideration.

On the sixth issue the respondent/applicant submitted that the applicant did not seek correction and interpretation of the award. In reply the applicants counsel submitted that the applicant’s fifth prayer is that the arbitration tribunal re-computes the award less costs of equipments illegally imported, instalment and commissioned.

On the seventh point of law raised by the respondent counsel reiterated his earlier submissions on point 1.

On the eighth point of law raised he contended that the arbitrator while handling the Respondent/Applicant Bill of costs was doing the same as the taxing officer and therefore was expected to tax basing on the outcome of the arbitration in any case taxation proceedings are based on the outcome of the court decisions and there was no way the arbitrator can fail to mention the outcome of the arbitration proceedings. If dissatisfied the respondent/applicant should have appealed against the decision of the taxing officer separately and not to object by way of a cross objection as per the rules.

As far as Annexure X1 to the affidavit in reply by Mr Kong Dong Sheng is concerned, the respondent/applicant attached a purported annexure X1 calling it an authorisation permit whose existence was denied during the proceedings before the tribunal. The body which issued the purported annexure is not the Atomic Energy Control Board. He submitted that under section 9 (b) it is the sole duty of the Atomic Energy council to issue authorisation and grant exemption for the possession and use of the radiation sources. It is also not the duty of the National Drug Authority.

This document is brought into court arbitrarily and should be expunged from the court record. The court should look at page 28 paragraph 5 where the arbitrator observed that "since none of the parties has obtained the required permit, I would not venture to condemn anybody on this aspect" if the existence of the purported document was brought to the attention of the arbitrator he would not have made such a remark. We further invite court to observe paragraph 1 and 2 of page 20 of the award which clearly indicates there was no permit obtained from the Atomic Energy Council.

We also wish to further submit that Makerere University Department of physics have no hand in issuing of authorisation certificates as per the provisions of section 9 of the Atomic Energy Act.

For the permit to be issued there are conditions precedent to issuance which must be fulfilled by the applicant under section 34 of the Atomic Energy Act. The following must be complied with:

1.      Environmental impact assessment of such equipment, installation and commissioning must be conducted

2.      The Uganda Gazette and local newspapers should run the adverts on the intended installation and commissioning of such equipment.

3.      There should always be meetings of the person who will be affected by such installations

He submitted that securing the permit is a process and finally the issuance of permits is the sole duty and responsibility of the Atomic Energy Council. Counsel prayed that court be pleased to grant the applicants prayers for the order sought and proceed to dismiss the prayers/orders sought on cross objection.

Ruling of Court

I have read the lengthy submissions of the parties and considered the authorities filed in support of the matter.  The orders sought by the applicant in this application succinctly state the applicant’s contention in that it seeks two remedies. The first remedy is to re-compute the amount awarded by the arbitrator in light of his finding that no permit, authorisation or exemption had been obtained under the Atomic Energy Act for the importation of the Fluoroscopy and CT scan machines. The second remedy sought is that the file be sent back to the arbitrator to re-compute the award. The applicant seeks orders in the chamber summons that the CT scan and fluoroscopy worth US $ 594,983 was illegally imported, installed and commissioned and that the claim founded on the two equipments cannot be settled by arbitration under the laws of Uganda; that the sum of US $ 594,983 being the cost of illegally imported equipments be excluded from the contract sum and, therefore the legally enforceable contract consideration is adjusted to US $ 424,711.8 from US $ 1,019,694.8; that 5% and 25% payment provided for under the contract should exclude the value of the illegally imported CT scan and fluoroscopy; an order that the respondent cannot claim for any profit and interest arising from the use of the CT scan and fluoroscopy illegally imported without authorisation permit; the arbitration court re-computes the arbitral award less costs of equipments illegally imported, installed and commissioned and that it is just, fair and equitable that the orders sought are granted with costs.

The Respondent on the other hand in its cross-objection to the award, seeks orders that the Centre for Arbitration and Dispute Resolution should render an opinion as friend of court over matters raised in MA application No. 452 of 2011 and in the alternative; Issues raised in MA No 452 of 2011 were not raised before the arbitrator for determination, and cannot be raised before this honourable court for determination; that the order of the arbitrator in reducing the disbursement under item 83 all through to 91 of the claimant’s Bill of costs be set aside; that item 83 all through, 91 of the claimants Bill of costs be allowed as presented by the applicant/respondent and ; in the further alternative; that issues raised in MA No. 452 of 2011 should be referred back to the arbitrator for determination.

Both parties share a common ground that the issues raised in MA 452 of 2011 are referred back to the arbitrator for determination with the difference that the cross objector raises this as an alternative prayer to other prayers

The crux of the respondent’s submission is that the matter of alleged illegality ought to have been raised before the arbitrator and in the very least referred back to the arbitrator for determination. The award of the arbitrator is annexure “C” to the affidavit of Dr. Elijah Wakamuke. The bone of contention in the applicant’s application arises from the last paragraph of page 27 of the award all through page 28 thereof to the first four paragraphs of page 29 of the award. For the record I will quote this part verbatim. The arbitrator states as follows between pages 27 – 29 of the award:

“However, Counsel for the Claimant did submit that as far as the Duodiagnoist Fluoroscopy and the CT Scan were concerned, the Claimant had not effectively installed and commissioned them because it did not comply with the Atomic Energy Act Chapter 24 Laws of Uganda 2008.

 I must say that I agree with counsel for the respondent on this point. The Atomic Energy Act, Act 24 of 2008 which commenced on the 18th day of February 2009, as per statutory instrument No. 5 of 2009, and which applies to both the claimant and the respondent forbids under section 32 thereof any person from owning, possessing, operating, importing, exporting, hiring, loaning, receiving, using, installing, commissioning, storing, selling…or to undertake any practice related to the application of atomic energy and regulated by the Act unless permitted by an authorisation issued under the Act or exempted under the Act according to section 33 thereof.

According to Makula International Ltd versus His Eminence Cardinal Nsubuga and Another (1982) HCB 11...

"… A court of law cannot sanction what is illegal and illegality once brought to the attention of the court, overrides all questions of pleading, including any admissions made thereon."

Therefore, though under annex "A" dated 26th of June 2009 and the addendum annex A2 dated 1 October 2009 as attached to the statement of claim the claimant appears to have completed the installation and commissioning of the equipment, under the Atomic Energy Act No. 24 of 2008, this process can only be taken as completed when the parties i.e. the claimant and the respondent have obtained the Permit.

Since none of the parties has obtained the required permit, I will not venture to condemn anybody in this aspect. The implication of this is that the 70% payment in respect of the Duodiagnoist fluoroscopy and the CT scan as per invoices number P108S010 – 1A P108S010 – 1B attached to schedule “A” of annex “A” as items B and C is USD 416,488.1.

Therefore subtracting the said US dollars 416,488.1 from the above said USD 713,786.36 leaves the balance of USD 297,298.26 as the amount the respondent is in breach as far as the 70% payment is concerned

All in all, I find that the respondent is in breach for non-payment to the tune of USD 417,231.76.

Since all the above said USD 417,231.76 became due for non-payment, as per close 2 .1 .3 (iii) of article 2 of annex "A", the above said due amount is subject to a 15% interest which amounts to United States dollars 62,584.764

Since I have already found that installation and commissioning was completed by the 9th day of February 2010, the above said outstanding balances is chargeable of an interest rate of 9.6% per annum in the second year which begins on the 9th day of February 2011 which interest has been running for the last (5) Months. I therefore find that interest amounting to USD 8,010.8496 has accrued on the above said outstanding amount for the last (5) months.

In conclusion therefore, on issue No. 1, I find that the Respondent is in breach of the total amount of USD 487,827.36 as per article 2 clauses 2.1.1, 2.1.2, and 2.1.3 (ii) (iii) of annex "A" dated 26th of June 2009 and the addendum annex A2 dated 1 October 2009 as attached to the Statement of claim.

This Arbitral Tribunal's finding does not mean that the Respondent is not liable to pay the balance of United States dollars 416,488.1 being the 70% in the respect of the Duodiagnoist fluoroscopy and the CT scan as per invoices No. P108S010 – 1A and P1085010 – 1B attached to schedule A of annex "A" as items B and C as the installation and commissioning.

The claimant is free to exercise its right under article 2 clause 2.1.3 (iii) and Article 4 clauses 4.2 and 4.4 in annex "A" attached to the statement of claim by taking possession and recovering the same subject to the claim to mesne profits and interest arising from use under the seller’s lien or jointly and severally with the Respondent to obtain permit and thereafter demand for the said balance of USD 416,488.1.”

The crux of the issue before me revolves on the Arbitrators treatment of the claim and expenses associated with the importation, installation and commissioning of the Fluoroscopy and CT scan equipment.

Applications to court after an award had been made are governed by section 34 of the Arbitration and Conciliation Act cap 4 Laws of Uganda. An objection to an arbitral award may only be made by an application to set aside the award under subsections 2 and 3 of section 34 of the Arbitration and Conciliation Act. The chamber summons of the applicant invokes sections 34 (2) (b) (i) and (ii) and section 34 (2) and (3) of the Act and rule 13 of the Arbitration Rules. Rule 13 is the general rule dealing with the mode of application to court for any other matter not otherwise provided for in the rules. On the other hand, the cross objection of respondent is made under rule 7 (2) of the Arbitration Rules which allows a respondent to an application objecting to the award to file a cross objection within 14 days. Section 34 of the Arbitration and Conciliation Act is reproduced herein below for ease of reference:

34. Application for setting aside arbitral award.

(1) Recourse to the court against an arbitral award may be made only by an application for setting aside the award under subsections (2) and (3).

(2) An arbitral award may be set aside by the court only if—

(a) the party making the application furnishes proof that—

(i) a party to the arbitration agreement was under some incapacity;

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, if there is no indication of that law, the law of Uganda;

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was unable to present his or her case;

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration; except that if the decisions on matters referred to arbitration can be separated from those not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside;

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate, or in the absence of an agreement, was not in accordance with this Act;

(vi) the arbitral award was procured by corruption, fraud or undue means or there was evident partiality or corruption in one or more of the arbitrators; or

(vii) the arbitral award is not in accordance with the Act;

(b) the court finds that—

(i) the subject matter of the dispute is not capable of settlement by arbitration under the law of Uganda; or

(ii) the award is in conflict with the public policy of Uganda.

(3) An application for setting aside the arbitral award may not be made after one month has elapsed from the date on which the party making that application had received the arbitral award, or if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral award.

(4) The court, when required to set aside an arbitral award, may, where appropriate and if requested by a party, suspend the proceedings to set aside the arbitral award for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

(5) If an application for the setting aside or suspension of an arbitral award has been made to a court, the court may, if it considers it proper, adjourn its decision and may also, on the application of the party claiming recognition or enforcement of the arbitral award, order the other party to provide appropriate security.

Section 34 (2) (b) (i) and (ii) and (3) deals with an application where the applicant contends under 34 (2) (b) (i) that the subject matter is not capable of settlement by arbitration under the laws of Uganda and (ii) the award is in conflict with the public policy of Uganda.

In the contention of the applicant, two matters should be determined. That is whether the award is not capable of settlement by arbitration under the laws of Uganda and whether it is in conflict with the public policy of Uganda. Secondly, as a question of fact, is to determine whether the Arbitral Tribunal after finding that the importation of the 2 relevant equipment was illegal went ahead to award sums of money related to the importation, installation and commissioning of the equipment. From the Arbitrators finding between pages 27 – 29 quoted above, both parties had not obtained a permit from the relevant authority under the Atomic Energy Act, Act 24 of 2008 before importation, installation and commissioning, of the Fluoroscopy and CT scan equipment. The crux of the applicant’s objection is founded on the doctrine on non enforceability of an illegal contract. However, I cannot determine this issue before I first determine the issue of the cross objection of the respondent and the reply therein on whether this issue can be raised at this stage of the proceeding.

Firstly the respondent seeks an order that issues raised in the application of the applicant including the issues I have outline immediately above are referred to the Centre for Alternative Dispute Resolution who should render an opinion to court as friend of court. To answer this first question a friend of court (Amicus Curie) is appointed by court to assist the court. An amicus curie gives an opinion to court on any matter which the court may take into account before it delivers judgment. I suppose there is no reason at this stage why the court should appoint an amicus curie and no reasons have been advanced by the Respondent as to why it deems that a friend of court is necessary in this matter. If the court needs assistance it is upon it to seek the opinion of an amicus curie on any matter. As the issue has not yet arisen, I will go to the next point.

On the second issue raised by the Respondent which is whether issues raised in Miscellaneous Application No. 452 of 2011 could be raised at this stage for determination when they were not the issues agreed or pleaded before the Arbitral Tribunal. The answer to the above issue of dealing with new matters not pleaded or agreed/framed is stated by the Arbitral Tribunal at page 28 of the award and I quote:

Makula International Ltd versus His Eminence Cardinal Nsubuga and Another (1982) HCB 11...

"… A court of law cannot sanction what is illegal and illegality once brought to the attention of the court, overrides all questions of pleading, including any admissions made thereon."

The question of illegality overrides questions of pleadings, and therefore because issues arise from pleadings under order 15 rules 1 of the Civil Procedure Rules and it does not matter that illegality was not agreed to as an issue for trial before the tribunal. The determination of a question of illegality brought to the attention of the court which had not been pleaded by any of the parties is an exception to the general rule that issues should arise from pleadings of the parties and that the parties are bound by their pleadings and cannot depart from them without leave of court by way of amendment. In support of the determination of illegality brought to the attention of court a few other authorities will be referred to. In the case of Mercantile Credit Co. Ltd v Hamblin [1964] 1 ALL ER 680, a defendant sought to rely on an illegality which was not pleaded. The plaintiff objected to reliance on the illegality on the ground that it had not been pleaded. The defendant then sought leave to amend the defence and the court held that counsel was not acting improperly to draw courts attention to an illegality of the transaction. On the contrary it was counsel’s duty, however embarrassing to prevent the court from enforcing an illegal contract.

The question of whether there was an illegal contract and therefore whether any portion of the award of the arbitral tribunal, whether of costs, interest or general or special damages is based on the allegedly illegally, imported, installed and commissioned equipment is at the heart of the controversy raised by the applicant in this matter.

The effect of illegality on a contract is discussed by Professor D.J Bakibinga in his book Law of Contract in Uganda, Fountain Publishers 2001.  At page 93 of his book the learned author notes that:

a contract which is illegal is void.  Illegality may manifest itself in four main ways.  First, in the formation of the contract e.g. where an unlicensed moneylender makes the loan.  Second, in the performance of the contract e.g. a contract to commit the crime.  Third, in the consideration for the contract.  Finally, illegality may be evident in the purpose for which the contract is made; for instance where a vehicle is hired for the purpose of smuggling items into the country.  The contract is illegal if it is (i) contrary to public policy and (ii) forbidden by statute.”

Furthermore at page 99 the learned author notes that “contracts which violate the provisions of a statute are regarded as void and not illegal. The distinction between void and illegal contracts is that a void contract is one where for instance a statute requires certain formalities to be carried out as a condition precedent for its validity, but without imposing penalty for non-performance.  Failure to comply with the formalities renders the contract void. On the other hand, an illegal contract is one where a penalty is imposed thereby rendering the contract both void and illegal.”   

In the case of Bostel Brothers Ltd v Hurlock [1948] 2 All ER 312 the Court of per Somervell LJ stated at 312 bottom:

“The principle of law relied on was stated concisely and in a form appropriate to the present issue by Ellenborough CJ in Langton v Hughes (1 M & S 593, 596): “What is done in contravention of the provisions of an Act or Parliament, cannot be made the subject-matter of an action.”

The law does not assist a guilty party in the case of an illegal contract. In the case of Phoenix General Insurance Co of Greece SA v Administratia Asigurarilor de Stat [1987] 2 All ER 152 The court of Appeal of the United Kingdom considered the question of the effect of illegality in great detail as contained in the lead judgment of  Kerr LJ.  He noted that it is settled law that any contract prohibited by statute, either expressly or by implication is illegal and void. He agrees with numerous authorities reviewed in his judgment and at page 171 bottom he quotes Parke B:

“Parke B said (2 M & W 149 at 157, 150 ER 707 at 710):

‘It is perfectly settled, that where the contract which the plaintiff seeks to enforce, be it express or implied, is expressly or by implication forbidden by the common or statute law, no court will lend its assistance to give it effect. It is equally clear that a contract is void if prohibited by a statute, though the statute inflicts a penalty only, because such a penalty implies a prohibition … And it may be safely laid down, notwithstanding some dicta apparently to the contrary, that if the contract be rendered illegal, it can make no difference, in point of law, whether the statute which makes it so has in view the protection of the revenue, or any other object. The sole question is, whether the statute means to prohibit the contract?’

His lordship after review extensively of numerous authorities on the subject of the effect of a prohibition by a statute on a contract noted that the crucial question in the courts view is whether the statute seeks to prohibit the contract.  At page 176 Kerr L.J. states:

The problem is therefore to determine whether or not the 1974 Act prohibits contracts of insurance by necessary implication, since it undoubtedly does not do so expressly. In that context it seems to me that the position can be summarised as follows.

(i) Where a statute prohibits both parties from concluding or performing a contract when both or either of them have no authority to do so, the contract is impliedly prohibited: see Mahmoud and Ispahani’s case [1921] 2 KB 716, [1921] All ER Rep 217 and its analysis by Pearce LJ in the Archbolds case [1961] 1 All ER 417, [1961] 1 QB 374 with which Devlin LJ agreed.

(ii) But where a statute merely prohibits one party from entering into a contract without authority and/or imposes a penalty on him if he does so (ie a unilateral prohibition) it does not follow that the contract itself is impliedly prohibited so as to render it illegal and void. Whether or not the statute has this effect depends on considerations of public policy in the light of the mischief which the statute is designed to prevent, its language, scope and purpose, the consequences for the innocent party, and any other relevant considerations. The statutes considered in Cope v Rowlands and Cornelius v Phillips fell on one side of the line; the Food Act 1984 would clearly fall on the other.

(iii) The Insurance Companies Act 1974 only imposes a unilateral prohibition on unauthorised insurers. If this were merely to prohibit them from carrying on ‘the business of effecting contracts of insurance’ of a class for which they have no authority, then it would clearly be open to the court to hold that considerations of public policy preclude the implication that such contracts are prohibited and void. But unfortunately the unilateral prohibition is not limited to the business of ‘effecting contracts of insurance’ but extends to the business of ‘carrying out contracts of insurance’. This is a form of statutory prohibition, albeit only unilateral, which is not covered by any authority. However, in the same way as Parker J in the Bedford case [1984] 3 All ER 766, [1985] QB 966, I can see no convincing escape from the conclusion that this extension of the prohibition has the unfortunate effect that contracts made without authorisation are prohibited by necessary implication and therefore void. Since the statute prohibits the insurer from carrying out the contract (of which the most obvious example is paying claims), how can the insured require the insurer to do an act which is expressly forbidden by statute? And how can a court enforce a contract against an unauthorised insurer when Parliament has expressly prohibited him from carrying it out? In that situation there is simply no room for the introduction of considerations of public policy. As Parker J said in the Bedford case [1984] 3 All ER 766 at 775, [1985] QB 966 at 986:

‘… once it is concluded that on its true construction the Act prohibited both contract and performance, that is the public policy’.

(iv) It follows that, however reluctantly, I feel bound to agree with the analysis of Parker J in the Bedford case and his conclusion that contracts of insurance made by unauthorised insurers are prohibited by the 1974 Act in the sense that they are illegal and void, and therefore unenforceable. ...”

It is clear and as concluded by Professor D.J Bakibinga (supra) that contracts forbidden by statutes are void. Where the contracts are forbidden and the statute also imposes a penal sanction for disobedience, the contract is both void and illegal.

In this case the basis of the finding of illegality by the Arbitral tribunal is section 32 of the Atomic Energy Act, Act 24 of 2008. The provision provides that no person shall sell or buy any product related to the application of atomic energy and regulated by the Act.  The provision prohibits both the buying and selling rendering any contract of purchase or sale without authorisation of the regulatory authoring illegal. Authorisation is a condition precedent to the sale, buying, importation, installation and commissioning of the equipment regulated by the Act. Section 32 of the regulatory statute provides:

“32. No practice without authorisation.

(1) Subject to section 33, no person shall acquire, own, possess, operate, import, export, hire, loan, receive, use, install, commission, decommission, transport, store, sell, distribute, dispose of, transfer, modify, upgrade, process, manufacture or undertake any practice related to the application of atomic energy and regulated by this Act unless permitted by an authorisation issued under this Act.

(2) A person who contravenes subsection (1) commits an offence and is liable, on conviction, to a fine not exceeding three hundred currency points or to imprisonment not exceeding six years, or both.”

The provision imposes a ban not only on the buyer but also on the seller. As had been established by the Arbitral Tribunal the applicant and the respondent are both culpable under section 32 (1) of the Act. Moreover under section 32 (2) of the Act, contravention of section 32 (1) of the Atomic Energy Act is an offence punishable by a fine not exceeding 300 currency points or to imprisonment not exceeding six years. The Council has powers under section 33 of the Act by statutory instrument to exempt prohibited practices from the requirement of authorisation prescribed by section 32 of the Act. The Preamble to the Atomic Energy Act gives insight into the public interest objective for regulation of equipments that emit ionising radiation. It provides:

 

“An Act to regulate the peaceful applications of ionising radiation; to establish the Atomic Energy Council; to provide for the protection and safety of individuals, society and the environment from the dangers resulting from ionising radiation; to provide for the production and use of radiation sources and the management of radioactive waste; to provide for a framework for the promotion and development of nuclear energy for use in power generation and other peaceful purposes; to provide for compliance with international safety requirements for the use of ionising radiation, radiation protection and security of radioactive sources; to repeal the Atomic Energy Act, Cap. 143; and for other related matters.”

Section 2 (1) of the Act applies the Act to every person in Uganda whose practice involves dealing in the equipments and activities regulated by the Act namely:

(a) to every person whose practice involves or includes the production, processing, handling, use, holding, storage, transport or disposal of natural and artificial radioactive material and devices emitting ionising radiation;

(b) to any other practice which involves a risk of harm arising from ionising radiation or a radioactive source;

(c) to a facility which serves purposes of, or performs functions in the course of which ionising radiation is created or is capable of being created;

(d) to all situations involving exposure or the potential for exposure to ionising radiation, except those which are excluded from the Standards.

In deciding whether to grant authorisation or not the regulatory Council takes into account the factors enumerated by section 37 of the Atomic Energy Act which include inter alia the ability of the applicant to operate in a manner designed to protect the health and safety of users, workers, beneficiaries and other members of the public who would be affected by the practice; and ensure the security of radiation sources and installations; and the public and private interests affected by the practice. The prohibition under section 32 of the Atomic Energy Act is therefore meant to secure the public interest and safety and renders any activity such as a sale or purchase or a contract in contravention of section 32 of the Act void and illegal 

The pertinent issue is what the court can do about the fact that the applicant participated in the installation of the equipment and it is allegedly using it. Counsel for the respondent submitted that he who comes to equity must come with clean hands. In other words the applicant participated in the importation, installation and commissioning of the equipment but now that a claim for payment arose, they rely on illegality while retaining the benefit of the equipment.  Regard must also be had to the purpose of the Atomic Energy Act.

The respondent submitted that the applicant has not quoted any law that the question of the equipment in issue cannot be arbitrated. This is the ground of the application of the applicant under section 34 (2) (b) (i) of the Arbitration and Conciliation Act cap 4 Laws of Uganda. As I have noted above the ground for the assertion of the Applicant has support in the legal doctrine of the effect of illegality that I have set out above. This is the quotation in the Bostel Brothers Ltd case (Supra) that:

What is done in contravention of the provisions of an Act or Parliament cannot be made the subject-matter of an action” This principle also applies to arbitration.

In reviewing the problem posed by the double standards of the applicant I have examined article 126 of the Constitution of the Republic of Uganda which permits reconciliation between parties even in criminal offences and compensation to victims of wrongs. I have found that the Constitutional principle is inapplicable because there is no victim other than the public policy for the safety of citizens and the loss of equipment by the respondent. The only remedy in the circumstances is to refer the matter to the DPP for appropriate action under section 32 (2) of the Atomic Energy Act 2008. I accordingly refer the matter to the Director of Public Prosecutions for appropriate action.

As far as the remainder of the contract is concerned the arbitrators award remains and the matter is referred back to the arbitrator reconsideration and to adjust the award if necessary to the effect that any costs, expenditure, damages arising directly or indirectly from the importation, installation and commission of the Fluoroscopy and CT scan equipment are excluded. The court shall make no comment with regard to the action to be taken by the state as far as the illegal equipment is concerned. I just need to state that such equipment cannot be used without clearance by the Council under the Atomic Energy Act. Under the Act “Council” means the Atomic Energy Council established by section 4. The composition of the Counsel is established by section 5 of the said Act.

Counsel for the Respondent submitted that the relevant regulatory body is the Atomic Energy Control Board created under S.I. 143 – 1 being regulations under the repealed Atomic Energy Act cap 143. The regulations interpret the word “Board” to mean the Atomic Energy Control Board. Pursuant to this submission the respondent sought to rely on exhibit X1 attached to the affidavit of Kong Dong Sheng affirmed on the 12th of September 2011 in reply to the application and in support of the cross objection. Annexure X1 is a licence issued by National Radiation Protection Services, Department of Physics Makerere University P.O. Box 7062 Kampala. In the absence of an exemption under section 33 of the Atomic Energy Act on which I have not been advised, the regulatory authority is the one defined by section 32 of the Atomic Energy Act 2008 as the Council.

An examination of the repealed Act cap 143 defines the board which was the regulatory authority to mean the board established under section 2. Section 2 of the repealed Atomic Energy Act designates the persons composing the board and prescribes that it comprises of about 15 persons whose titles are stated under the repealed section. On the other hand section 5 (1) of the Atomic Energy Act 24 of 2008 provides that the Council shall consist of a Chairperson, and four other members appointed by the Minister with the approval of Cabinet. This is in different from what counsel for the respondent referred to in S.I. 143 – 1 and section 2 of the repealed Atomic Energy Act cap 143. Moreover it is a principle of statutory interpretation embodied in section 18 (4) of the Interpretation Act cap 3 that any provision of a statutory instrument which is inconsistent with any provision of the Act under which the instrument is made shall be void to the extent of the inconsistency. In this case the composition of the Board” defined by statutory Instrument No. 143 – 1 is inconsistent with section 5 (1) of the Atomic Energy Act, Act 24 of 2008 under which the S.I. 143 – 1 is deemed to have been issued unless new regulations are made. Consequently the board is only the Council appointed by the Minister under section 5 (1) of the Atomic Energy Act 2008.

In the premises the award is referred back to the Arbitral Tribunal as prayed for by the parties with the directions that I have given above. MA No. 534 of 2011 for cash security for the enforcement of the full decreed amount is stayed pending the decision of the arbitral tribunal without prejudice to enforcement of the uncontested portion of the award which may go ahead. Each party shall bear its own costs of the application.

Ruling delivered on open court this 25th day of November 2011

 

 

Hon. Mr. Justice Christopher Madrama

Judge

 

 

In the presence of

Vincent Opyene for the applicant

Enoth Mugabi for the Respondent

Mr. Qiu representative of Respondent in court

Ojambo Makoha Court Clerk

 

 

Hon. Mr. Justice Christopher Madrama

Judge