Court name
Commercial Court of Uganda
Judgment date
8 June 2012

Soroti Joint Medical Services v Sino Africa Medicines & Health Ltd (Miscellaneous Application-2012/104) [2012] UGCommC 60 (08 June 2012);

Cite this case
[2012] UGCommC 60

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 98 OF 2012

AND

MISCELLANEOUS APPLICATION NO 104 OF 2012

(ARISING FROM CIVIL SUIT NO 452 OF 2011 AND CAD/ARB NO 4 OF 2011 AND COMMERCIAL DIVISION CIVIL SUIT NO 415 OF 2011)

SOROTI JOINT MEDICAL SERVICES}….........................                                                                                          APPLICANT/RESPONDENT

VS.

SINO AFRICA MEDICINES AND HEALTH LTD}…............                                                                                           RESPONDENT/CLAIMANT

 

BEFORE HON. JUSTICE CHRISTOPHER MADRAMA

 

RULING

The Applicant’s application first application MA 98 of 2012 was lodged under section 33 of the Judicature Act cap 13, order 46 rules 1 and 2 and 8 of the Civil Procedure Rules and section 98 of the Civil Procedure Act. It is for review of a decree in MA No. 452 of 2012 arising from CAD/ARB No. 4 of 2011, arising from commercial division suit number 415 of 2010 to provide for payment in instalments and for costs of the application to be provided for.

The grounds of the application in the notice of motion are that the Applicant has so far remitted to the Respondents a sum of Uganda shillings 125,000,000/= which sum when applying for execution was not deducted from the decretal sum nor was it rejected or returned to the Applicants.  By receiving and accepting the funds the Respondent waived and intimated to the Applicant that satisfaction of the Decree shall be by payment in instalments.  That the Applicant wrote to the Respondents a request to pay a sum of Uganda shillings 32,000,000 per month until payment in full but never received any reply.  That the equipment’s listed for attachment are medical equipments in use by patients on life support and the attachments will cause of death of unsuspecting and innocent patients who are not parties to the proceedings in Court.  Further grounds are in the affidavit of Dr. Elijah Wakamuke a director of the Applicant Company in support of the application.  He avers that the Decree in civil suit number 452 of 2011 was issued against the Applicant on the 23rd of February, 2012.  Since that time the Applicant had so far remitted to the Respondent in total Uganda shillings 125,000,000/=. The Applicant is committed to satisfying its obligations and is ready to deposit another instalment of Uganda shillings 50,000,000/= on the 14th of March, 2012 and thereafter a monthly instalment of 50,000,000/= effective from the 30th day of April 2012 till payment in full.  On the 7th of February 2012 the Respondent applied for execution of the decree without making adjustments to take into account the already paid sum.  The Respondents intended and indeed misled Court by applying for execution of the full decreed amount and such conduct is an abuse of Court process.  He avers that the equipment listed for judgment include life support equipment and its attachment would cause the death of patients who are not parties to the proceedings and is oppressive to the Applicants.  The Applicant communicated to the Respondent, the Court and Court bailiffs an offer to pay a sum of Uganda shillings 32,000,000/= per month until payment in full but never received any reply from the defendant.  So it is in the interest of justice that the Court reviews the order in the ruling it made.  Consequently the Applicant’s application is for review of the order for payment in full and for adjustment of the already fulfilled part of the order for payment.

The affidavit in reply is sworn by Qui Xue Yong the deputy general manager of the Respondent well versed with the matters.  He avers from information provided by his lawyers that the application is barred in law and his advocates will raise a preliminary point of law at the commencement of the hearing seeking dismissal of the application with costs.  On the 25th of November, 2011 this Court’s ruling sanctioned the enforcement of the uncontested portion of the award.  On the 21st of December, 2011 the Respondent’s advocates demanded for payment of the uncontested portion of a sum of United States dollars 284,096.74 which was ignored by the Applicant. The Respondent extracted an order on the 1st of February, 2012 and on the 10th of February, 2012 following no response to the demand for payment the Respondent applied for execution to recover the uncontested award claim.  The deponent admits that unknown to the Respondent the Applicant had paid certain monies amounting to United States dollars 90,000.  The unpaid balance that the Applicant owes the Respondent is a sum of 194,096.74 U.S. dollars and taxed costs of Uganda shillings 12,411,666/= and the Respondent has never accepted payments by instalments.  The Applicant is a dealer and sells Medical Services for personal gain and enrichment and without payment continues to enjoy equipment supplied by the Respondent.

In rejoinder Dr. Elijah Wakamuke deposes that that the Applicant made several payments to the Respondent.  That the Applicant further made several proposals to pay in instalments but the Respondent has turned down all offers so far.  The Applicant does not intend to use the Respondent’s equipment without paying for them but made a workable payment schedule to the Respondent which the Respondent has always refused to agree to. 

On the 11th of April, 2012 when the application came for hearing learned Counsels for both parties agreed to file written submissions in Miscellaneous Applications 98 and 104 of 2012. The Applicant was represented by Vincent Opyene while the Respondent was represented by Enoth Mugabi.

Ruling

I have carefully considered the written submissions of learned Counsels for both parties and have considered the applications one after the other.  The written submission of the Respondent in MA 98 of 2012 raises preliminary points of law on the competence of the application and will be considered first.

The first objection to the application is that the application is brought under the Civil Procedure Rules and Civil Procedure Act whereas it is the Arbitration and Conciliation Act cap 4 which applies to domestic and international arbitration.  Learned Counsel for the Respondent contends that the Civil Procedure Act and the Civil Procedure Rules have no application to arbitration proceedings.  He contends that the outcome of arbitration proceedings is an award whereas the outcome of the proceedings under the Civil Procedure Act proceedings is a Decree or order.  Secondly the application seeks to review a decree that has never been issued by this Court.  The ruling of the Court dated 25th of November, 2011 resulted in an order and not a Decree. Learned Counsel submitted that MA No.  452 of 2011 was a challenge to a portion of an arbitration award in CAD/ARB No. 4 of 2011.  Following the ruling of the Court the Applicant has partly performed the order of the Court to pay the uncontested portion of the award by paying U.S. dollars 90,000 and payment of the taxed costs of Uganda shillings 12,000,000/=. He contended that the Applicant cannot approbate and reprobate.

Learned Counsel for the Respondent further submitted that the instant application is a disguised application under section 34 of the Arbitration and Conciliation Act which is instructive on how an arbitral award should be challenged. Learned Counsel contended that in the previous application made under section 34, the Applicant was aggrieved with contract to supply a CT scan and fluoroscopy equipment and not the rest of the award.

Finally learned Counsel submitted that the application is a fit and proper matter in which the Applicants Counsel should be ordered to personally pay the costs of the application. He relied on Karmali versus Tanzania Development Finance Company Ltd [2002] 2 EA 418 in which the Applicant and his advocate raised preliminary objections which they knew to be futile and waited for 9 months to apply for its revision. The conduct of the Applicant and his advocate was calculated to forestall the trial of the suit in the high Court.  The Court of Appeal in Tanzania in the above case expressed its displeasure by ordering the advocate to pay costs of the application.

In reply to the Respondent’s preliminary objection to the application learned Counsel for the Applicant submitted that the application is brought under order 46 rule 1 of the Civil Procedure Rules which permits any person considering himself or herself aggrieved by a decree or order from which an appeal is allowed but from which no appeal is preferred to apply for review of the judgment to the Court which passed the decree or made the order.  He contended that the Court order was made against the Applicant in MA No.452 of 2011.  He submitted that the portion of the order of the Court sought to be reviewed is as follows:

“That MA No.534 of 2011 for cash security for the enforcement of the suit the decree amount is stayed pending the decision of the arbitral tribunal without prejudice to the enforcement of the uncontested portion of the award which may go ahead.”

Learned Counsel submitted that the Court ordered the Applicant to go ahead and enforce the uncontested portion of the award and it is on the basis of the above order that the Applicant proceeded to attach the equipment. Learned Counsel further submitted that the basis of enforcement proceedings is the ruling of the Court and not the award of the arbitrator. The Court is mandated to order payment in instalments.  Furthermore learned Counsel contended that there was nothing to stop to this Court from hearing the application having pronounced itself upon the uncontested amount and it is the Court’s pronouncement that the Respondent relies on to make demands on the Applicant.  Learned Counsel further submitted that the Court has power under section 33 of the Judicature Act cap 13 laws of Uganda to grant all such remedies as any of the parties to a cause or matter is entitled to in respect of any legal or equitable claim properly brought before it so as to as far as possible determine all matters in controversy between the parties and avoid multiplicity of legal proceedings.

Learned Counsel further submitted that the provisions of the Civil Procedure Act and the Civil Procedure Rules are applicable in the circumstances of this case.  As far as the merits of the application is concerned, the Applicant had already remitted to the Respondent a sum of 225,000,000 Uganda shillings equivalent to 90,000 U.S. dollars in a period of less than two months and has made several proposals to the Respondent for further payments.

Learned Counsels contended that payment by instalment is acceptable in Courts of law and interest is given to cover any inconvenience that such payment would occasion.  Learned Counsel submitted that The Constitution (Commercial Court) (Practice) Direction paragraph 5 (2) provides that the procedure in and progress of a commercial Court action shall be under the direct control of the commercial judge who will to the extent possible be proactive.  Furthermore that section 98 of the Civil Procedure Act saves the inherent powers of the high Court.  He submitted that the exercise of inherent powers is the pivotal test of meeting the ends of justice on the one hand and the prevention of abuse of Court process on the other hand.  Learned Counsel relied on the case of National Union of Clerical, Commercial and Technical Employees verses National Insurance Corp.  Court Of Appeal civil appeal number 17 of 1993 (Supreme Court) where it was held that the question whether the Court should invoke its inherent powers in any given case is a matter of the Court’s discretion to be exercised judicially and the availability of an alternative remedy or specific provisions is only one of the factors to be taken into account but does not limit or remove the Court’s jurisdiction.

The basis of the application for review is the ruling of this Court in MA No.  452 of 2011 arising from CAD/ARB number 4 of 2011 delivered on the 25th of November, 2011.  In that application the Applicant who is also the Applicant in this matter filed an application in the Commercial Court Division under section 34 (2) (b) (i) and (ii), 34 (2) (3) of the Arbitration and Conciliation Act and rule 13 of the Arbitration Rules for orders that the CT scan and fluoroscopy equipment valued at United States dollars 594,983 was illegally imported, installed and commissioned contrary to the provisions of the Atomic Energy Act. The Court agreed with the arbitrator that the importation and installation of the CT scan and fluoroscopy was illegal and unenforceable provision of the contract between the parties.  I also held that:

“As far as the remainder of the contract is concerned the arbitrators award remains and the matter is referred back to the arbitrator for 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 commissioning 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.”

Finally the Court concluded as follows:

“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 this application.”

It is quite clear from the above passages that the Court never made an order or decreed the payment or enforcement of the uncontested portion of the award.  The Court only noted that its decision staying application for enforcement of the full decreed amount was without prejudice to the enforcement of the uncontested portion of the award.  The begging question is what was the award?  The award of the arbitrator is at page 39 of the award and is dated 25th of July, 2011 and reads as follows:

“In the result, having dismissed the counterclaim with no orders as to costs and having found for the claimant in the greater part, I make the award as follows;

  1. The Respondent pays the claimant a total 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 A 2 dated the 1st day of October 2009 as attached to the statementof claim.
  2. The claimant is awarded an amount of Uganda shillings 10,000,000/= in general damages.
  3. The claimant is awarded interest on (a) and (b) above at the rate of 19.97% per annum from the date of judgment till payment in full.
  4. The claimant is also awarded costs of this arbitration.

Pursuant to the above award the Applicant applied to the High Court for orders that: the CT scan and fluoroscopy worth U.S. dollars 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.  Secondly that United States dollars 594,983 and the cost of the illegally imported equipment’s be excluded from the contract sum and therefore the legally enforceable total contract consideration be adjusted to U.S. dollars 424,711.8 from United States dollars 1,019,694.8.  This meant in effect the arbitral tribunal award as proposed to be adjusted from US$ 487,827.36 to US $ 424,711.8 a difference of US $ 63,115.56 according to the Applicant’s application. The Applicant also sought orders that 5% and 25% payment provided for under the contract should exclude the value of the illegally imported equipment.  It was also for an order that the Respondent cannot claim for any profit and interest arising from the imported equipment challenged on grounds of illegality.  Finally the Applicant sought orders for the arbitration Court to re-compute the arbitral award less costs of equipment illegally imported, installed and commissioned. 

Section 34 of The Arbitration and Conciliation Act applies to applications for setting aside arbitral awards. Under section 34 (2) thereof under which the application and ruling sought to be reviewed had been brought provides that an arbitral award may be set aside by the Court only if 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. The application had also been brought under section 34 (2) (b) (i) and (ii) of the Arbitration and Conciliation Act which also provides that an arbitral award shall be set aside if the subject matter of the dispute is not capable of settlement by arbitration under the laws of Uganda or where the award is in conflict with the public policy of Uganda. The Applicant’s application partially succeeded and the portion of the award dealing with the CT scan and fluoroscopy equipment were found to be illegally imported contrary to the Atomic Energy Act.  As far as the Applicant’s application for setting the award was concerned, initially there was a civil suit and upon application it was referred to arbitration in accordance with the contract of the parties.  Civil suit number 415 of 2010 was filed by the Respondent and the application to refer the dispute to arbitration was also made by the Respondent.  At the hearing of the application to refer the dispute to arbitration in accordance with the contract of the parties, it was referred by consent of the parties.  The award of the arbitrator was made on the 25th of July, 2011.  The Applicant then applied in MA No.  453 of 2011 for declaration of illegality of certain Equipment referred to above.  The arbitrator himself had ruled that the equipment and had been imported contrary to provisions of the Atomic Energy Act and excluded its importation costs from the award.

The Applicant’s application itself did not contest US$424,711.8 out of the award of the arbitral tribunal. This is found in ground two of the chamber summons in MA No.  453 of 2011. When put in context the ruling of the Court in that application was that the uncontested portion of the award could be enforced. The wording of the ruling of the Court is specific and is as follows:

"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."

MA No.  534 of 2011 is an application by the Respondent seeking an order that the Applicant gives cash security for the enforcement of the uncontested sums decreed in the award dated 25th July 2011 and for costs of the application.

It cannot be held that the Court made a ruling to enforce the uncontested portion of the award because where an award has been made by an arbitral tribunal; it becomes enforceable as a decree of the Court. Section 35 of the Arbitration and Conciliation Act provides that an arbitral award shall be recognised as binding and upon application in writing to the Court shall be enforced subject to section 35. Section 36 of the Arbitration and Conciliation Act further provides that where the time for making an application to set aside the arbitral award under section 34 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.

It is therefore evident from the proceedings which transpired in the application to set aside the award that a certain portion of the award was not challenged. In other words there was no challenge to a substantial part of the award. The previous application related to the contention that the Fluoroscopy and CT scan equipment which was part of equipment supplied to the Applicant under the contract was unenforceable and could not be subject to arbitration proceedings on grounds of illegality. The matter was sent back to the arbitral tribunal to re-compute the award by excluding any sum awarded that had as its basis the equipment tainted with illegality. To make it clear, the Respondent to this application has been at liberty to apply for enforcement of the award in as far as the uncontested portion of the award is concerned in accordance with the Arbitration and Conciliation Act. Such an application for enforcement is not based on the ruling of the Court but the unchallenged part of the award and as indicated by the Applicants own application in which it did not apply to set aside part of the award in terms of section 34 of the Arbitration and Conciliation Act. In other words the uncontested portion of the award is enforceable under the provisions of the Arbitration and Conciliation Act and not on the basis of a ruling of this Court.  The uncontested portion of the award was not before the Court at the time of the ruling. What was before the Court in MA 534 was an application for the Applicant to furnish security for the portion of the uncontested award.  

The Applicant cannot therefore by any stretch of imagination be aggrieved by the ruling of this Court. The very application that was stayed without prejudice was an application of the Respondent and not the Applicant. It is in the Applicants own application that the award be adjusted to the uncontested amount which is specifically spelt out in the application in which the Court had made a ruling.  The Applicant’s proposal in that application had the effect of reducing the award of the arbitrator from US$ 487,827.36 to US $ 424,711.8. This makes a difference of US $ 63,115.56 which the Applicant sought to be excluded from the award. The comments of the Court in the ruling, when put in context, is that the Respondent may go ahead to enforce the uncontested portion of the award without prejudice to other proceedings.

Secondly, because the uncontested portion of the award is enforceable as a decree of this Court, it is enforceable as an award of the arbitrator and not as an order of the Court. In other words it is the award of the arbitrator which has not been challenged within the period within which it ought to have been challenged. I therefore agree with learned Counsel for the Respondent that this Court cannot review an arbitration award. Secondly, that order 46 rule 1 of the Civil Procedure Rules deals with application for review of a decision of the Court which passed the decree or made the order. In this case, there is no decree or order of the Court as alleged by the Applicants Counsel. I also agree that the effect of the application for review is a disguised application made under section 34 of the Arbitration and Conciliation Act that deals with applications to set aside awards outside the limitation period. The Court made no order properly called an order of the Court in which it awarded the uncontested sum which forms the basis of the Respondent's application for enforcement. Applications for review under order 46 rule 1 deal with the judgment and orders of the Court which passed the decree or made the order. In the case of Yusufu vs. Nokrach [1971] EA 104 Phadke J held that an application for review under order 42 rule 1 of the Civil Procedure Rules before revision (now order 46 rule 1) contemplates a review by the Court which had already given judgment of its own orders as being different from the procedure by way of appeal to the Court of Appeal. The Supreme Court of Uganda in Mohammed Allibhai vs. W.E. Bukenya and Departed Asian Property Custodian Board SCCA 56 of 1996 per Wambuzi CJ as he then was held that order 42 rules 1 applies to review of an order or decree made by the Court. He said:

"On the wording of this rule, the grounds upon which a review may be sought by an aggrieved person are:

  1. discovery of new and important evidence which was not within his knowledge and could, therefore, not be produced by him, or
  2. some mistake or error apparent on the face of the record, or
  3. Any other sufficient reason.

In any of these three situations an aggrieved party may apply for review of the judgment only if the decree or order was made against him. The words used are: "desires to obtain a review of the decree passed or judgment made against him." Was the appellant an aggrieved party within the provision of this rule?"

There must have been a decree passed or judgment made against the Applicant. In this case there is no judgment or decree passed against the Applicant consequently there is nothing to review. For emphasis, the High Court has no jurisdiction to review an award by an arbitrator that is not the subject of a challenge under section 34 of the Arbitration and Conciliation Act. As we have noted earlier, the Applicant's application explicitly spelt out what it proposed to be the enforceable part of the award which it proposed should be adjusted to.

Last but not least, an application for instalment payment of an award by an arbitrator cannot be made by way of an application for review of the award. Obviously because the Applicant has not even challenged that portion of the award, the award cannot be reviewed. Secondly, the registrar in charge of executions cannot be misguided by the Courts ruling that stay of proceedings in another application is without prejudice to the enforcement of the uncontested portion of the award. Enforcement proceedings are applied for independently as if the award were a decree of this Court under section 36 of the Arbitration and Conciliation Act. The rules applicable to enforcement proceedings are the Arbitration Rules made under section 71 of the Arbitration and Conciliation Act. An application for instalment payment ought to have been made under rule 13 of the Arbitration Rules. This is because section 71 (2) of the Arbitration and Conciliation Act provides that until the rules committee makes rules to replace them the rules specified in the first schedule to the Act shall apply to arbitration in Uganda. That notwithstanding, section 36 of the Arbitration and Conciliation Act enables enforcement of an award as if it were a decree of the High Court.

Even if the Civil Procedure Act where held to be applicable to the Applicants case, questions arising out of execution are determined under section 34 of the Civil Procedure Act. Subsection (1) of section 34 provides that all questions arising between the parties to the suit in which the decree was passed or their representatives, and relating to the execution, discharge, or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. No application was made for payment in instalments on the award of the arbitral tribunal. It cannot be handled in an application to review of a ruling in an application where that part of the award has not been challenged. The Applicant cannot invoke section 33 of the Judicature Act which only applies to suits and applications properly brought before Court. In any case the Court made no ruling to enforce an award that has not been challenged. Such awards are enforceable by virtue of the provisions of the Arbitration and Conciliation Act and not any pronouncement of the Court. 

In the premises, the Applicant’s application is incompetent and the objection of the Respondent to the application for review of the ruling of this Court succeeds with costs with the remaining issue of who should meet the costs between client and advocate.  Before I consider that question, I need to consider first the other applications interlocutory to this application namely Miscellaneous Application No. 104 of 2012.

MISCELLANEOUS APPLICATION NO 104 OF 2012

MA No.  98 of 2012 which has just been dismissed is entitled as arising from civil suit number 452 of 2011 and also Arbitration Cause number 4 of 2011. It should be recalled that the Respondent Messrs Sino Africa Medicines and Health Ltd had filed HCCS NO. 415 of 2010 against the Applicant for recovery of United States dollars 833,719.74 being the balance in the sale/purchase agreement for medical equipment dated 26th of June 2009 and addendum thereto. Thereafter the plaintiff applied for reference to arbitration in accordance with the contract of the parties in MA No.  670 of 2010. In MA No. 534 of 2011, the Respondent to this application applied for the Applicant to give cash security for the enforcement of the full decreed amount in the award dated 25th of July 2011. The application was for security for due performance of the award of USD 294,096.74 awarded by the arbitrator excluding the CT scan and fluoroscopy, general damages of Uganda shillings 10,000,000/= and costs of the arbitration taxed at Uganda shillings 24,411,666/=. In the ruling of the Court in the application made under section 34 of the Arbitration and Conciliation Act, the Court observed that the uncontested portion of the award may be enforced without prejudice to reference back to the arbitrator in that ruling. Last but not least MA No.  452 of 2011 is an application by the Respondent to the current application for orders that the Centre for Arbitration and Dispute Resolution render an opinion as a friend of Court over matters raised in MA No. 452 of 2011. The High Court ruled in MA No. 452 of 2011 on the 25th of November 2011 and that ruling is the basis of the application for review.

The application in MA No. 104 of 2012 arises from MA No. 452 of 2011 and also arises from Commercial Court Division HCCS No. 415 of 2010 and is brought under section 33 of the Judicature Act, order 22 rule 26 of the Civil Procedure Rules and section 98 of the Civil Procedure Act. It is for orders that an order be issued for setting aside and stay of execution in civil suit number 415 of 2011. It is also for an order that the sums due be paid in reasonable instalments and time by the Applicant and that adjustments be made based on remittances and that costs of the application be provided for. Order 22 rule 26 of the Civil Procedure Rules provides for stay of execution pending a suit between the decree holder and the judgment debtor. It provides:

"Where a suit is pending in any Court against the holder of a decree of the Court in the name of the person against whom the decree was passed, the Court may, on such terms as to security or otherwise, as it thinks fit, stay execution of the decree until the pending suit has been decided."

High Court civil suit number 415 of 2010 was stayed pending arbitration according to the contract of the parties under the Arbitration and Conciliation Act. It terminated in an award by the arbitrator on the 25th of July 2011. The Applicant applied to set aside the award and the Court made its ruling thereon on the 25th of November 2011. It cannot be said that the suit remained pending after the arbitral award. In fact under section 36 of the Arbitration and Conciliation Act the award may be enforced as a decree of the High Court. There is therefore no pending suit number 415 of 2010. The arbitrator having resolved the dispute in favour of the Respondent, the suit is also resolved in terms of the arbitral award. What was pending in Court was the application for review of the ruling made by the Court under section 34 of the Arbitration and Conciliation Act. In the circumstances, order 22 rule 26 of the Civil Procedure Rules does not apply because it deals with stay of execution pending determination of the suit. Because there is no pending suit between the parties before this honourable Court other than the application for review which has now been determined, the application for stay of execution cannot be granted and is dismissed with costs.

Secondly the application for adjustment of the award can be made before the registrar handling execution of the arbitral award. It should be noted that the Respondent concedes that payments had been made. The registrar will accordingly make the necessary adjustments according to the concession by the Respondents. Last but not least, there is no judgment or order of this Court forming the basis of the application for payment in reasonable instalments. The basis of the application is contained in the affidavit of Dr Elijah Wakamuke sworn in support of MA No.  104 of 2012. In paragraph 2 of the affidavit it is averred that there is a decreed sum in civil suit number 452 of 2011 issued against the Applicant on 23 February 2012. It was pursuant to the decree that the Applicant paid sums of money in paragraph 3 and 4 of the said affidavit. Paragraph 4 of the affidavit further provides that the Applicant is committed to satisfy its obligations. The foundation of the application being a non-existent decree law cannot be granted.

An arbitral award is only treated as a decree for purposes of enforcement under section 36 of the Arbitration and Conciliation Act. Secondly, an application in execution proceedings should be made under the Arbitration Rules. This is directed by section 71 of the Arbitration and Conciliation Act. The Arbitration Rules are made by the Centre for Arbitration and Dispute Resolution under section 71. Section 71 (2) of the Arbitration and Conciliation Act provides that:

"Until the rules committee makes rules of Court to replace them, the rules specified in the first schedule to this Act shall apply to arbitration Uganda."

It would suffice to set out the provisions of rules 11, 12 and 13 of the Arbitration Rules set out in the first schedule to the Act. The provisions are as follows:

"11. An application to enforce an award as a decree of Court under section 35 of the Act shall not be made, if no objection to the award are lodged, until the expiration of 90 days after notice of the filing or registering of the award has been served upon the party against whom the award is to be enforced, and if objections are lodged, until the objections have been dealt with by the Court.

12. Where a party who has been ordered by an award to pay a sum of money or to hand over movable property lodges objections to the award, any other party interested in the award may apply to the Court for an order directing the objector to give security for the enforcement of the award and of any costs that may be ordered in the objection proceedings, and the Court may thereupon order security to be given in like manner as though the objector were appealing against a decree.

13. All applications for the appointment of or challenge to arbitrators, and all other applications under the Act, other than those directed by these rules to be otherwise made shall be made by way of chamber summons supported by affidavit."

Section 71 (2) read together with the first schedule to the Arbitration and Conciliation Act which is the Arbitration Rules leads to the inevitable conclusion that any application for instalment payment of the award has to be made under the Arbitration Rules. Rule 13 ensures that all other applications not specifically provided for are made by way of chamber summons supported by affidavit. That notwithstanding, it may be argued that the failure to cite the correct rule is a matter of form. I would not agree with that for the simple reason that the foundation of the Applicant’s application for instalment payment is a non-existent order of this Court. On that ground alone MA No.  104 of 2012 is dismissed with no order as to costs.

Costs in Miscellaneous Application No. 98 of 2012

The last issue is whether costs should be paid by Counsel for the Applicant personally in MA 98 of 2012 being the application for review of the order.

Learned Counsel for the Respondent submitted that costs should be paid by advocate for the Applicant personally. The question of whether an advocate should pay costs personally should be preceded by a hearing of the advocate as to whether he should pay costs personally as held by the East African Court of Appeal in JB Kohli and Others v Bachulal Popatlal [1964] 1 EA 219 (CAN) the Court of Appeal at Nairobi held at page 222 that the Supreme Court has an inherent jurisdiction to make an order calling upon a solicitor in a case before it to pay the costs of either his client or the opposite party or both. Such punitive order can be made on the grounds of professional misconduct not amounting to so serious conduct as to justify striking his name off the role or suspending him. The Court cited with approval a passage in the Judgment of Lord Wright in Myers v. Elman (1), ([1939] 4 All E.R. at page 509 where he said that “

“A mere mistake or error of judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor’s duty to ascertain with accuracy may suffice.”

The East African Court of Appeal also cited Lord Denning MR in Abraham v. Jutsun [1963] 2 All E.R. 402  where he held that costs personally against a solicitor should not be awarded without the solicitor being given an opportunity to defend his conduct. Lord Denning MR said at page 403:

“True it is that the High Court has a summary jurisdiction over solicitors in pursuance of which they have power to order them to pay costs, if the costs have been caused by the solicitors’ misconduct. That was always the case at common law; but at common law it always was held that no such order should be made unless fair notice was given to the solicitor of the matter alleged against him as misconduct, and he was given a fair opportunity of being heard in answer.”

I am persuaded by the above authorities. Learned Counsel for the Applicant in his own application for setting aside the arbitral award under section 34 of the Arbitration and Conciliation Act in MA No.  453 of 2011 ground 2 thereof applied for the adjustment of the award to United States dollars 424,711.8. In other words this amount in the award was not in dispute. By his own application he agreed with the award dated 25th of July 2011 up to the amount stated in ground 2 of the application. To apply for a review of the purported order of this Court of the said amount is questionable conduct. Notice shall be issued against learned Counsel Vincent Opyene, Counsel for the Applicant to show cause why he should not personally pay the costs of MA No.  98 of 2011. The notice will be issued by the registrar for the said Advocate to appear in Court for the determination of the question on another day.  Ruling delivered in open Court the 8th of June 2012

 

Hon. Mr. Justice Christopher Madrama

Ruling delivered in the presence of:

Vincent Opyene for the Applicant

No representative of Applicant

Enoch Mugabi appears for the Respondent.

Ojambo Makoha Court Clerk

Hon. Mr. Justice Christopher Madrama

8th June 2012