IN THE HIGH COURT OF UGANDA AT KAMPALA
MISCELLANEOUS APPLICATIONS NOS 593 AND 595 OF 1999
(Arising from Civil Suit No. 476 of 1999)
Attorney General &
Uganda Commercial Bank Ltd::::::::::::::::::::::::::::::::::::::::::::::::::: Plaintiffs
Westmont Land (Asia) BHD & 2 Ors::::::::::::::::::::::::::::::::::::::::: Defendants
Before: The Hon. the Principal Judge - Mr. Justice J.H. Ntabgoba
This is a ruling on two applications made in this Court by Westmont Land (Asia) BHD in Miscellaneous Applications Nos. 593 of 1999 and 595 of 1999, both arising from High Court Civil Suit (HCCS (No. 476 of 1999, in which suit the plaintiffs are the Attorney General of Uganda and Uganda Commercial Bank Ltd, and the defendants are Westmont Land (Asia) BHD; Greenland Investments Limited and Greenland Bank, Ltd.
Miscellaneous Application number 593 of 1999 was brought by Chamber summons under Order 9 rule 1 B (1)(h), (2) and (3) of the Civil Procedure Rules, S. 101 of the Civil Procedure Act, and S.35 of the Judicature Statute. It seeks Orders that HCCS. No. 476 of 1999 be stayed pending arbitration proceedings and that costs be paid by the plaintiffs/respondents.
Miscellaneous Application number 595 of 1999 was brought by notice of motion under S.17 of the Arbitration Act (Cap.55 Laws of Uganda) Rule 12 of Arbitration Rules SI 55-1, S.1O1 of the Civil Procedure Act, and S.35 of the Judicature Statute. The motion application seeks the same orders as are sought in the chamber summons (Application No.593 of 1999) aforementioned.
Both applications which were filed in this Court on 27/5/99 give the same grounds of application, namely, that:
1 There exists a binding agreement by the parties to submit their dispute to binding arbitration.
2. There is no sufficient reason why the matter should not be referred to arbitration.
3. The applicant/defendant was ready and willing to participate in the arbitration at the time of filing the suit and remains so.
4. The applicant/defendant has taken no other step in the proceedings.
5. That it is just and equitable to stay the proceedings to enable the parties to undergo arbitration.
It is pertinent to clarify that M/s Greenland Investments, Ltd and M/s Greenland Bank, Ltd, which are co-defendants of Westmont Land (Asia) BHD are not party to the two applications. It is also important to mention that Westmont Land (Asia) BHD (the applicant) was served through its advocates with the summons to enter a defence under Order 9 rule 1 but the applicant has never filed any defence. It is of utmost importance to point out too, that entering of appearance is no longer part of our Civil Procedure rules. It was abolished by the recent amendments to the Civil Procedure Rules as I will be showing later in this ruling. Therefore the filing of a W.S.D. is the first step in the proceedings.
As I have pointed out the suit filed against the applicant, among others, was registered in this Court on 6th May 1999, but the service on the applicant/defendant was effected on 7th May 1999 as is evidenced by the affidavit of service deponed to by one Tumwebaze Keneth Edwin who says he was then an Assistant Process Server in the Ministry of Justice. The applicant filed the notice of intention to defend the suit pursuant to Order 9 rule 1B (1) on 27th May 1999 and it was therefore within the period of 2l days stipulated in the summons. For some unknown reason the notice states that the defendant/applicant has entered appearance even though they, the advocates of the defendant know or ought to have known that entering appearance was abolished. Might it be it was a way of justifying the application for stay of the proceedings which, in S. 17 of the Arbitration Act is conditioned on first entering appearance?
In response to the applicant’s notice of motion and chamber summons applications, the Attorney General and Uganda Commercial Bank, Ltd, the respondents, filed replies to the two applications. In the reply to notice of motion, Mr. Christopher Madrama, a Senior State Attorney in the Attorney Generals’ chambers, swore an affidavit on 7th June 1999 which was filed in Court the next day the 8th of June 1999. In that affidavit he admitted that there was an agreement between the 1st defendant/applicant and the plaintiffs/respondents. He annexed the agreement to the affidavit. He also annexed to the affidavit a demand notice dated 22nd April 1999 by which due notice was given of the defendant’s/applicant’s breach of the contracts between them and proposed that the parties submit the dispute to arbitration as per the terms of the breached agreement. The relevant paragraph in the notice reads as follows:
“As a first step to a resolution, we are proposing that all parties agree
to a submission of all these matters to binding arbitration in accordance with the arbitration clauses contained in all the three substantive Agreements. In this respect we must hear from you... (that time prescribed was missed by the photo stating)... If we do not hear from you before the above deadline, we shall proceed with formal legal proceedings against you and to hold you responsible for general and special damages including all legal fees and costs of the law suit.”
According to the affidavit of Christopher Madrama (paragraph 5), “the demand notice of 22nd April 1999, gave ten (10) days to the applicant within which to indicate its intentions to agree to binding arbitration in accordance with the arbitration Clauses” of the Agreements. The affidavit avers in paragraph 7 that the 10 days notice elapsed on May 2nd, 1999 without any indication by the applicant of any intention to agree to a submission to the arbitration. The Ag. Director, Civil Litigation in the Attorney General’s chambers wrote to the Counsel for the applicant on 4/5/99 advising that as no response had been received regarding the respondent’s proposal for a submission to arbitration, the respondents were to commence civil litigation in the matter. According to