Court name
Commercial Court of Uganda
Judgment date
21 December 2020

Christian Counselling Fellowship v Ibinonga Construction & General Merchandise (Miscellaneous Cause-2020/38) [2020] UGCommC 132 (21 December 2020);

Cite this case
[2020] UGCommC 132
Coram
Adonyo, J

The Republic of Uganda

In The High Court of Uganda at Kampala

Commercial Division

Miscellaneous Cause No.38 Of 2020

[Arising from CAD/ARB 3 Of 2019]

In The Matter of the Arbitration and Conciliation Act
And

In The Matter of an Application to Set Aside an Arbitral Award in Arbitration
Between

Christian Counselling Fellowship :::::::::::::::::::::::::::::::: Applicant
And

Ibinonga Construction & General Merchandise ::::: Respondent

BEFORE: HON. DR, JUSTICE HENRY PETER ADONYO
RULING

This application was brought under section 34 (1) (2) (i) (ii) (v) (vi) and

3 of the Arbitration and Conciliation Act and Rule 13 of the

Arbitration Rules for orders that

  1. The arbitral award made on 27th August 2020 by the arbitrator (Belinda Lutaya Nakiganda) in CAD/ARB 3 of 2019 (hereinafter called the ‘award’) be set aside
  2. The costs of the application be provided for

The grounds of the application are that;

  1. The Applicant as a party to the arbitration agreement was under some capacity;
  2. The arbitration agreement is not valid under the laws of Uganda
  3. The award deals with a dispute not contemplated by or falling within the terms of reference or contains decision or matters beyond the scope of the reference to arbitration
  4. The award was procured by corruption, fraud or undue means and there is evident partiality or corruption
  5. The award is not in accordance with the arbitration and Conciliation Act

Ms. Alice Achan swore an affidavit in support of the application. She deponed that the Managing Director of the Respondent made his bid twice under the names of Ibinonga Construction and General Merchandise and Stanhope Construction and General

 

 Merchandise which was dishonest. Secondly, that none of those firms were Value Added Tax registered as required by the bid specifications.

Ms. Achan also deponed that the award contained obvious falsehoods including the claim that the first two invoices were approved by the 10 Respondent’s previous consultants for the work done yet as demonstrated the two signatures thereon were for the claimant’s employees and not a consultant. Furthermore, that there was never a joint evaluation of the work done by the parties since the Respondent was not knowledgeable and did not have a qualified person among his staff.

According to Ms. Achan, the arbitrator in making the award made a new case in favour of the Respondent by taking into account documents that were never referred to by either party during the hearing of the submissions and that the arbitrator was also partial 20 in considering the evidence by selective reference to half the conditions of some of the Building Contracts Clauses and ignored the other half.

 

An affidavit in reply was sworn by Mr. Lakica Patrick, who deponed that the Respondent filed Miscellaneous Application No. 1 of 2020 to correct computation errors in the award made on 27th August 2020, and the arbitrator made another award dated 21st September 2020 wherein she stated that the ruling superseded the one which was delivered on 27th August 2020 which is now no-existent as it was overtaken by the one made later. He deponed further that the award dated 21st September 2020 has been lodged in the court vide Arbitration Cause No. 11 of 2020.

According to the affidavit of Mr. Lakica, the Applicant introduced new issues which were not addressed or raised at the arbitration hearing and is estopped from raising them at this stage, and also that evaluation and assessment of evidence is not a ground for setting aside an arbitral award.

Submissions

Applicant’s submissions

It was argued for the Applicant that the arbitrator was wrongly appointed contrary to section 2 (i) (a), section 11 (3), section 67 (i), 68 and section 69 of the Arbitration and Conciliation Act which requires
that an arbitrator shall be appointed upon the application of a party. In relation to the second award, counsel submitted that the application was only to correct computation errors in the award. It was also argued that the respondent did not apply for by the application and neither did the applicant consent to it. It was submitted that the second award was illegal and of no effect and unenforceable.

That, there was evidence of fraud, misrepresentation, dishonesty and illegality which was evidenced by lack of a VAT registration certificate and double registration for a bid and pursuant to section 34 of the Arbitration Act, an award may be set aside where it was procured by corruption or fraud. Another submission by the Applicant’s counsel was that there were obvious falsehoods in the evidence relied on by the arbitrator which included claims that the first two invoices were approved by the Respondent’s previous consultants for work done, making selective reference to half the conditions of some of the Building Contract clauses while ignoring others. Other arguments by counsel for the Applicant were that the Applicant was denied a right

 

to a fair hearing contrary to article 28 of the Constitution and section

24 (6) of the Act

Respondent's submissions

The Respondent raised various preliminary points of law including that the award dated 27th August 2020, which the Applicant prays to be set aside is nonexistent since it was superseded by the one dated 21st September 2020. It was also submitted that both parties attended the hearing of miscellaneous application No 1 of 2020 which sought to correct computation errors was heard in the presence of both parties and therefore the applicant cannot claim that it was denied a fair hearing.

That, correction of errors was carried out in accordance with the section 33 of the Arbitration and Conciliation Act which authorizes a party to have computation errors corrected. It was submitted further that the application be dismissed and rejected for being frivolous and vexatious because the Applicant attempted to set aside an award which was overtaken by events.

Secondly that, the Applicant unlawfully filed 4 affidavits without leave of court on 20th October 2020 sworn by Frank Kwesigabo and

6

 
  Text Box: 6

 

 

3 others on 22nd October 2020 sworn by Frank Kwesigabo and Albert Byamugisha which raise new grounds that are not included in the application and yet under Order 52 rule 7, a party must seek the leave of court to file a supplementary affidavit in support of the application and that the said affidavits, should be struck off.

On the appointment of the arbitrator, that the ruling decision in International Development Consultants versus Jimmy Muyanja was not applicable because the ruling of the court was made on the 1st March 2019 and the Arbitrator was appointed on 28th January 2020 and yet the law does not apply retrospectively.

On the bidding process, it was submitted that an evaluation process was carried out, and that the Applicant failed to provide evidence to support the allegations contained in paragraph 3 and 4 of the affidavit of Alice Achan and also that the issue of VAT is res judicata and cannot be adjudicated upon as per section 7 of the Civil Procedure Act. In relation to the bidding process, it was submitted that the Applicant did not adduce any evidence that the Arbitrator was impartial during the proceedings or that the arbitrator did not act honestly, or acted in bad faith.

Decision:

I have taken into account the submissions of the parties. In its submissions, the Respondent raised preliminary objections which I will address first.

The first preliminary objection was that the award dated 27th August 2020 which the Applicant prays to be set aside is non-existent having been superseded by the one dated 21st September 2020 which was delivered after the Respondent sought to correct computational errors vide miscellaneous application no.l of 2020.

Section 33 (1) (a) of the Arbitration and Conciliation Act provides that a party may request the tribunal to correct in the arbitral award any computational errors, any clerical or typographical errors or any other errors of a similar nature. Section 33 (2) provides as follows; ‘if the arbitral tribunal considers the request made under subsection (1) to be justified, it shall make the correction or give the interpretation within fourteen days after receipt of the request, and the interpretation shall form part of the arbitral award.

Section 34 (3) is to the effect that an On this, the court had the opportunity to peruse miscellaneous application no. 1 of 2020 which
was brought under section 33 (1) of the Arbitration and Conciliation Act Cap. 4 which sought to correct the computation errors contained in the award dated 27th August 2020, particularly that, the addition of the figures contained in the computation in the award, there were errors in so far as item C Subtotal (A+B) is concerned 90,757,957.3+504,210,974=594,968,949.32 and not 554,632,071.4. The arbitrator corrected the above errors and on 21st September 2020, she issued another award with only the computations errors corrected and no other changes made. In this award, the arbitrator noted that the ruling supersedes the one delivered on 27th August 2020. Further still, 6th October 2020, the award dated 21st September 2020 was lodged in the court for registration and recognition.

The Applicant is challenging an award dated 27th August 2020 yet another award superseding it was delivered on 21st September 2020. This application seeks an order that the arbitral award made on 27th August 2020 by the arbitrator be set aside which means that the whole application is premised on an award that has been overtaken by events and is non-existent on the court record.

 

Section 33 (2) refers to both interpretation and correction of clerical errors and I agree with the submissions of counsel for the Respondent that the section specifically refers to an interpretation forming part of the award and yet the issue before the arbitrator was the correction of computation errors which she rightly did by making a separate award which supersedes an earlier one. Section 33 (4) of the Arbitration and Conciliation Act does not equally apply since miscellaneous application no. 1 of 2020 did not seek orders for an additional award as provided under this section.

Under Order 7 rule 11 (e), a plaint may be rejected where the suit is shown by the plaint to be frivolous and vexatious. The Black’s Law Dictionary defines a frivolous suit as one which lacks legal basis or merit. In the case before me, this application fits within the definition of ‘frivolous and vexatious’ given that its seeks to set aside an award granted on 27th August 2020 which, was subsequently replaced by the one dated 21st September 2020 which is also the one registered and recognized in this court. Moreover, there is sufficient proof that the Applicant was well aware of miscellaneous application no.l of
2020 and chose not to oppose it and on for those reasons it cannot claim that there wasn’t a fair hearing.

The second preliminary objection raised by the Respondent relates to the filing of affidavits without the leave of court. Counsel for the Respondent referred to the supplementary affidavit of Mr. Frank Kwesigabo filed on 20th October 2020 and affidavits in rejoinder sworn by Frank Kwesigabo and Albert Byamugisha and filed in court on 22nd October 2020. In Dr. Wilberforce Wandera Kifudde versus National Animal Genetic Resources Centre and Data Bank and 2 Others Misc. Cause No. 82 of2020 the court considered a similar scenario. After analyzing Order 52 rule (3) and (7) of the Civil Procedure Rules, the court held that the law does not envisage the filing of affidavit in rejoinder to an application and therefore the party who intends to use additional affidavits must seek the leave of court to file supplementary affidavits. Nowhere is it shown on record that the Applicant sought the leave of court before filing the affidavits. Having had the opportunity to peruse the aforementioned affidavits which appear to have been sneaked onto the court record, I find that the court’s finding in Dr. Wilberforce Wandera Kifudde versus

National Animal Genetic Resources Centre and Data Bank, and

2 Others is equally applicable in this case. The said affidavits are hereby struck off.

In conclusion therefore, this preliminary objection is sustained. The application is dismissed as it is premised on an award that had been overtaken by events and for that reason, I would find that there is no need to take any further consideration of the merits of the application.

Order:

  • Preliminary objection is allowed.
  • Application dismissed as it is premised on an award that had been overtaken by events.
  • Costs of this and the application are granted to the Respondents.

I so order.

 

 
  Text Box: I so order.

 

 

 

Hon. Justice Dr. Henry Peter Adonyo

Judge
21st December 2020