Main Topics: Arbitration
Issue Date: 29th May, 2024
Summary of the Facts
Cairo Bank Uganda Limited (the applicant) applied to set aside the arbitral award delivered on May 2, 2023, by Ms. Irene Nambatya (the arbitrator) in the case of Cads Ventures Limited (the respondent) v. Cairo Bank Uganda Limited.
The grounds for the application were that:
- The arbitrator delivered the award based on issues that were not framed jointly by the parties at the commencement of the hearing.
- The arbitrator disregarded the applicant’s case, and submissions, and failed to evaluate the evidence on record properly and was therefore partial as provided under Section 34 of the Arbitration and Conciliation Act.
Decision of the Court
The Commercial Court presided over by Lady Justice Harriet Grace Magala dismissed the application to set aside the arbitral award, finding that the applicant failed to meet the necessary criteria under Section 34 of the Arbitration and Conciliation Act.
The court ruled that the applicant’s challenge appeared more like a disguised appeal requiring the Court to re-evaluate the evidence considered by the arbitrator rather than address procedural or substantive legal errors in the arbitration proceedings.
The court’s decision hinged on several key points:
- The applicant’s failure to object during the arbitration proceedings waived its right to raise objections later (as per Section 4 of the Arbitration and Conciliation Act).
- The court found no evidence that the arbitrator had acted unfairly or impartially as she decided based on the provisions of the contract between the parties.
Key Quote: “I am persuaded to find that simply because the Award was not in favor of the Applicant who believed the outcome was as a result of the Arbitrator ignoring their submissions and evidence did not amount to bias or partiality”
Law Applied by the Court
The court applied the following laws in reaching its decision:
- Arbitration and Conciliation Act (ACA): Specifically, Section 34 (2) (a) (b), Section 38 (1) (b) and 2 which outlines the grounds for setting aside an arbitral award, and Section 4, which deals with the waiver of the right to object.
Counsel on Record
For the Applicant: M/s KSMO Advocates
For the Respondent: M/s CMS & Co. Advocates
Conclusion
This judgment highlights the autonomy of arbitral proceedings, reinforces the principle that courts should not intervene in arbitral awards except on clearly defined grounds as specified under the Arbitration and Conciliation Act.
It also emphasizes the finality and binding nature of arbitration unless legal errors are evident.