ERJB v. UWAMARIYA

# ERJB v. UWAMARIYA

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2021-12-14 - Case/document no.: RCOM 00269/2021/TC - Collection: Commercial Court

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ERJB v. UWAMARIYA [Rwanda COMMERCIAL COURT – RCOM 00269/2021/TC (Rwigema, P.J.,) December 14, 2021] Commercial procedure – Jurisdiction of courts – Execution of arbitral awards – A claim requesting to compel an administrative authority to execute an arbitral award is in the jurisdiction of the Commercial Court. Facts: Company E.R.J.B Ltd entered into a contract for the construction of classrooms with the Ministry of Education, which stipulated that disputes would be settled amicably, in case of the failure to do so, the disputes shall be referred to arbitration. E.R.J.B Ltd has submitted a case to the Arbitration against the Ministry of Education arguing that it has failed to fulfil its obligation to pay for the work it has done, the arbitrators ordered the Ministry the outstanding balance with interests. E.R.J.B Ltd sued the Minister on the ground that the ministry refused to execute the award, therefore it prays that the court summons the Minister and also requested for the forced intervention of the Permanent Secretary because he may object the payment of the money ordered in the award. The Minister raised the objection related to the lack of jurisdiction, submitting that the Commercial Court has no competence to summon an administrative authority regarding issues which begun in arbitration, because they are in the jurisdiction of the Commercial High Court. Held: A claim requesting to compel an administrative authority to execute an arbitral award is in the jurisdiction of the Commercial Court. Objections overruled. Statutes and statutory referred to: Law No 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedure, articles 241 and 242, Law N° 005/2008 of 14/02/2008 on arbitration and conciliation in commercial matters, article 44. No cases referred to. Judgment I. BACKGROUND OF THE CASE [1] E.R.J.B Ltd entered into an agreement with the Government of Rwanda (Ministry of Education) for the construction of classrooms and bathrooms at a cost of 418,397,293 Frw, and

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the agreement stipulated that the disputes arising from it shall be settled amicable, in case of failure to do so, the disputes shall be referred to arbitration. [2] E.R.J.B Ltd submitted a case to the Arbitration, alleging that the Ministry of Education (MINEDUC) failed to fulfill its obligations to pay for the activities perfomed. The Arbitration ordered the Ministry to pay E.R.J.B Ltd 41,496,440 Frw of the outstanding debt, 37,144,831 Frw of interest on that debt, 3,000,000 Frw for procedural and counsel’s fee and 5,881USD of Arbitrator's cost. [3] The Arbitration also ordered the Government of Rwanda (Ministry of Education) to pay the amount mentioned above within thirty (30) days from the signing of the award, in case of the failure, the interest of 8.131%Frw per year shall be charged. [4] E.R.J.B Ltd adds that the arbitral award mentioned above has not been enforced by the Rwandan Government, therefore it sues before the court Uwamariya Valentine as the Minister of Education to be ordered to enforce such award, and also requesting that Karake Charles should be forced to intervene in this case so that as the Permanent Secretary in such Ministry be ordered to enforce such award. [5] Counsel Habumuremyi Prosper representing Uwamariya Valentine raised the objection related to the lack of the court’s jurisdiction, requesting for inadmissibility of a claim. Regarding the intervention of the Permanent Secretrary in MINEDUC, he states that it is not necessary for him to intervene because he cannot interfere with the enforcement of the decision of the court. [6] In this case, the Court shall determine :  Whether the Court lacks jurisdiction to hear this claim ;  Whether Karake Charles should be forced to intervene in this case. II. ANALYISIS OF LEGAL ISSUES 1. Whether the Court lacks jurisdiction to hear the claim [7] Counsel Habumuremyi Prosper representing Mujawamariya Valentine argues that article 184 of the law relating to civil, commercial, labour and administrative procedure, which was based on in filling a claim, only deals with administrative cases. He further sustains that the Commercial Court has no jurisdiction to hear this case, because based on that article, the Court with the jurisdiction to summon an administrative authority for explanation is the one which made the award, therefore, since the contested award was made by Arbitration, the Commercial Court does not have the jurisdiction to summon Uwamariya for explanation, yet it is not the one who made the award that ERJB Ltd claims to be enforced, therefore he finds that the claim should be sent to Arbitration. [8] Counsel Yankurije Dative representing E.R.J.B Ltd submits that, based on article 1 of the law mentioned above, the law governs the proceedings of other cases while there are no other specific laws governing their proceedings, that is why the claim of E.R.J.B Ltd is based on article

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184 of that law, therefore the Commercial Court has jurisdiction to hear this claim as there is no issue of arbitration in this judgment. [9] Counsel Habumuremyi further sustains that Mujawamariya requests that the issues related to Arbitration should be settled by the Commercial High Court, based on article 82 of the aforementioned law; and Counsel Bayingana Janvier representing E.R.J.B Ltd argues that the article would be read together with the provisions of article 47 of the Law on Arbitration. DETERMINATION OF THE COURT [10] Article 184 of Law n0 22/2018 of 29/04/2018 relating to civil, commercial, labour and administrative procedure as amended to date states that "an administrative authority that fails to execute a court judgement may be summoned to the court that issued the decision to justify reasons of the non- compliance upon request by an interested party.” [11] However, the Court finds that the aforementioned article is in the title of the law regarding the proceedings in administrative cases; that title consists of two categories, namely: a) How administrative cases are filed and tried; b) Sanction forcing an administrative authority to execute a court decision; in this second section, the legislator, in article 184 mentioned above, indicated that an administrative authority who refused to comply with the court’s decision can be summoned by the court that made such decision for explanation, this shows that the jurisdiction to summon the administrative authority is held by the court that decided the case, especially since it is the one that can hear the dispute on the execution of the decision it ordered than another court that has not heard the case, so it is clear that if the case was decided by the Commercial Court, there is no restriction on the jurisdiction to summon an administrative authority wo refused to execute its decisions; this was upheld by the Commerce High Court in the case RCOM 00014/2019/HCC decided on 10/04/2019, where it ordered to the Vice Chancellor of the University of Rwanda Philip COTTON to do everything possible to ensure that the University pays CELA Company Ltd 54,915,000 Frw by 10/06/2019, he will be charged with 250,000 Frw every day of the penalty forcing him to execute the case lost by the university against the company1. [12] With regard to the context of this case where a claim was filed before the Court against the officials of the Ministry of Education to explain their failure to enforce the arbitration award of 15/05/2020, the Court finds that the above-mentioned law does not provide anything to the official who refused to comply with the Arbitration award, that he may be summoned to the court to explain the reasons of the non- compliance. [13] It finds that the arbitration is concluded by the pronouncement of the decision in substance or the order taken by the Arbitral Tribunal, at the termination of the arbitral proceedings as provided under the article 44 of Law n0 005/ 2008 of 14/02/2008 Law on arbitration and conciliation in commercial matters, this law does not provide for anything about the continuation of the arbitral proceedings relating to the enforcement of its awards, the administrative authority is charged to provide for explanation of non- compliance.

1 Judgment RCOM 00014/2019/HCC decided by the Commercial High Court on 10/04/2019, CELA Company Ltd v. Philip Cotton paragraph 8 & 27.

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[14] It also finds that there is no arbitration agreement between ERJB Ltd and Uwamariya Valentine as stipulated in article 9 of the above-mentioned Law relating to Arbitration, so that it could deprive the court of the jurisdiction to hear this case as stipulated in article 10 of that law. [15] The Court finds that since the subject matter "Requesting the Court to order the an administrative authority to enforce the arbitration award of 15/05/2020" was not within the jurisdiction of the arbitration, in case there is no other provision of law about that issue, no court should have jurisdiction to hear this case other than the Commercial Court because it is the one that has the jurisdiction to hear commercial issues in case the parties have not agreed that the disputes shall be settled by Arbitration and the award allegedly not enforced by the administrative authorities of the Ministry of Education is about the public procurement, which falls in the jurisdiction of this Court2, therefore it is the one that should summon an administrative authority in question for explanation of the reasons of non-compliance with the decision relating to those tenders because no other Court is competent accordingly and no other court can better understand the reasons why the accused administrative authority did not comply with the order than the competent court that hears cases like those ones in case they are not submitted to Arbitration. [16] The above-mentioned statements are also upheld by the fact that the cases decided by the arbitral tribunal (arbitral awards) are affixed of enforcement formula by the Court registrar, whereby they can be forcibly executed after being checked and approved by the court registrar as provided under articles 241 and 242 of Law n0 22/2018 of 29/04/2018 relating to civil, commercial, labour and administrative procedure as amended to date, thus, due to the fact an arbitral award of 13/05/2020 was affixed of the enforcement formula by Commercial Court registrar on 29/6/20203, for voluntary or compulsory enforcement, nothing can prevent the Court that affixed the enforcement formula from summoning the administrative authority who refused to comply with the award to explain the reasons of non-compliance, upon the request of the interested party; therefore the Commercial Court has the jurisdiction over the claim brought by ERJB Ltd relating to the enforcement of the Arbitration Award. [17] Paragraph 3 of article 54 of the International Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID Convention4) signed by Rwanda on April 21, 1978 and approved by Rwanda on November 14, 19795, reads that " the execution of arbitral awards shall be governed by ordinary laws governing judgments in the country in which they are executed."6 The Court finds that although in this case the arbitral award is about the State of Rwanda and ERJB Ltd as a Rwandan company, there is no obstacle that the execution of that award is governed by the laws concerning judgment execution in Rwanda (laws concerning the execution of judgments in the State in which territories such execution is sought).

2 Article 81 of the Law n°30/2018 of 02/06/2018 determining the jurisdiction of courts, paragraph 1, subparagraph 16°. 3 Arbitral award against E.R.J.B Ltd and State of Rwanda (MINEDUC), made on 13/05/2020, page 19. 4 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (also known as ICSID Convention). 5 Internet website https://icsid.worldbank.org/sites/default/files/ICSID-3.pdf, visited on 11/12/2021 6 Article 54 (3) of the ICSID Convention “Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought.”

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[18] It finds that the laws governing judgment execution in the country do not provide for the seizure of the property of the State of Rwanda in case it lost the case, but article 183 of Law n0 22/2018 of 29/04/2018 relating to civil, commercial, labour and administrative procedure as amended to date, paragraph 3 provides that " When a judicial decision is final and binding against the Government, the Kigali City, a District or a Government institution or organ for the payment of a sum of money fixed by the decision, the amount must be paid within a period of six (6) months from the time of notification of the decision", if not paid, an administrative authority that fails to execute a court judgement may be summoned to the court that issued the decision to justify reasons of the non- compliance, if the reasons are without merit, the court imposes a sanction for non compliance to the administrative authority as long as the judgement remains unexecuted as stipulated in the article 184 of that law. [19] It finds that there are no specific laws governing the execution of arbitral awards when they are not implemented by the Rwandan State, the execution should be governed by the ordinary laws governing judgment execution as stipulated in the international convention mentioned above, thus, due to the fact that an administrative authority of the State is summoned to explain the reasons of non-compliance with the decisions in the ordinary judgment that the State lost, and what prevented him from being summoned to the Court at the same level with the Arbitration organ that made the award (which arbitrates at the first level the cases related to public procurement) to explain the reasons of the non-compliance with that decision, the Commercial Court has the jurisdiction to summon an official of Ministry of Education to explain the reasons that prevented the State of Rwanda (MINEDUC) from complying with the arbitral award in case against E.R.J.B Ltd; therefore, the objection of the lack of court’s jurisdiction presented by Uwamariya Valentine is unfounded. 2. Whether Karake Charles should be forced to intervene in this case. [20] Counsel Bayingana requests the Court that Karake Charles as Permanent Secretary in the Ministry of Education shall be forced to intervene because as the chief budget officer he can interfere with the payment to E.R.J.B. of the amount of money that the State of Rwanda was ordered to pay in Arbitration. [21] Counsel Habumuremyi states that he finds that the Permanent Secretary in the Ministry has no power to interfere with the judgment execution, so there is no need for his forced intervention in the case. DETERMINATION OF THE COURT [22] Paragraph 1 of article 115 of the above-mentioned law relating to procedure, reads that "Forced intervention in a case is requested by a party who whishes to call upon a person who is not party to the case to intervene and take part in the case so that he/she does not lodge third party opposition.” [23] Basing on the aforementioned article, the Court finds that the forced intervention is done to the party who wants the party forced to intervene may be held responsible for payment, which is only possible if the claimant intends to let the party forced to intervene to know the ruling of the case in order to prevent him from the third party opposition; this was also upheld by the Court of

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Appeal in the judgment RCOMA 00018/2018/CA-RCOMAA00024/2018/CA decided on 16/11/2018.7 [24] It finds that in this case, the issues that the Court is required to consider is "to order to the Minister of Education and the Permenant Secretary in the Ministry of Education in Rwanda to enforce the award made by the arbitral tribunal" and "To determine whether the Minister of Education and the Permanent Secretary in the Ministry of Education should be ordered to pay compensation in this case." The Court finds that the Permanent Secretary in the Ministry of Education should not be held responsible without being given the opportunity for explanation, therefore, basing on Article 115, he must be forced to intervene in case for pleading so that he will not interfere with the its execution especially since he is also in charge of the budget in that Ministry. III. DECISION OF THE CASE [25] Holds that the objection raised by Uwamariya Valentine in the case RCOM 00269/2021/TC are unfounded. [26] Holds that the Commercial Court has the jurisdiction to hear the claim brought by ERJB Ltd; [27] Holds that Karake Charles, the Permanent Secretary in the Ministry of Education, shall be forced to intervene in this instant case. [28] Holds that the hearing will be resumed on December 28, 2021 at 08:30 a.m.

7 Judgment RCOMAA 00018/2018/CA-RCOMAA00024/2018/CA decided by the Court of Appeal on 16/11/2018, against Murekatete Laetitia, Kajeguhakwa Valens, SGP Ltd, SP Ltd and GT Bank, paragraph 41.