[2014] UGCADER 2
The tribunal held that, despite the brevity and lack of detail in the dispute resolution clause, the reference to arbitration in the written agreement satisfies the statutory requirements under the Arbitration and Conciliation Act. The Act's definition of an arbitration agreement is broad and does not require...
Source-derived case information.
- Citation
- [2014] UGCADER 2
- Parties
- Applicant: Delta Industrial Equipment Ltd; Respondent: Uchumi Supermarkets Limited
- Court
- Center for Arbitration and Dispute Resolution of Uganda
- Jurisdiction
- Uganda
- Case Number
- CAD/ARB/ 12 of 2014
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Appointment of Arbitrator
- Outcome
- Application granted. Arbitrator to be appointed. Costs awarded to the Applicant.
- Legal Topics
- Arbitration Agreement, Appointment of Arbitrator, Interpretation of Dispute Resolution Clauses
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Delta Industrial Equipment Ltd
Applicant
Uchumi Supermarkets Limited
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Application for Appointment of Arbitrator
Legal Issues
- 1 Whether the dispute resolution clause in the Memorandum of Sale constitutes a valid arbitration agreement under Ugandan law.
- 2 Whether the Applicant is entitled to the appointment of an arbitrator due to the Respondent's failure to respond to notices to arbitrate.
Ratio Decidendi
The tribunal held that, despite the brevity and lack of detail in the dispute resolution clause, the reference to arbitration in the written agreement satisfies the statutory requirements under the Arbitration and Conciliation Act. The Act's definition of an arbitration agreement is broad and does not require elaborate drafting. The Respondent's failure to respond to the Applicant's notices to arbitrate and to participate in the establishment of the tribunal justified the Applicant's request for the Centre to appoint an arbitrator. The tribunal found merit in the application and ordered the appointment of an arbitrator, with costs awarded to the Applicant.
Court Disposition
Application granted. Arbitrator to be appointed. Costs awarded to the Applicant.
Orders
- An arbitrator shall be appointed by the Centre for Arbitration and Dispute Resolution.
- Costs of the application are awarded to the Applicant.
Full Case Text
Judgment text and source record
27 paragraphs
# **THE REPUBLIC OF UGANDA**
## **THE CENTRE FOR ARBITRATION AND DISPUTE RESOLUTION (CADER)**
#### **CAD/ARB/ NO.12 OF 2014**
# **DELTA INDUSTRIAL EQUIPMENT LTD …………. APPLICANT VERSUS**
## **UCHUMI SUPERMARKETS LIMITED ………… RESPONDENT**
### **RULING**
The parties executed the Memorandum of Sale on 5th December 2013.
The dispute resolution clause reads as follows,
## "12. **ARBITRATION:**
If any dispute or difference shall arise between the parties concerning this agreement and the parties are unable to resolve it by negotiation, it shall be referred to Centre for Arbitration and Dispute Resolution (CADER) under the Conciliation and Arbitration Act CAP 4 Laws of Uganda."
The Affidavit of Service deposed by Ocitti Samuel evidences that the Chamber Summons Application was served upon the Respondent. For this reason the matter proceeded *ex parte*.
The Affidavit in support of the Application deposed by Islam Abou-Zid evidences that notice to refer the matter to arbitration was given on 29th
May 2014 through two letters, respectively titled "*Demand Note/Notice of Intention to Sue*" and "*Invitation to arbitrate*".
The deponent Islam Abou-Zid indicates that the Respondent paid a deaf ear to either notice.
The problem with the dispute resolution clause is that the word arbitration appears only once as the title on Para.12 and not within the narrative.
This manner in which Para.12 was drafted is no doubt troublesome.
My considered interpretation of the dispute resolution clause has led me to the following conclusions.
- 1. Clause 12 provides for both negotiation and arbitration. - 2. Arbitration is set out only in one word. - 3. The reference to arbitration nothing but a terse statement. - 4. Negotiation on the other hand is enclosed within a lengthy narrative.
Imagine if the question were posed "*where shall you refer the dispute*", then the terse answer "*arbitration!*" would suffice.
Moreover **S.2(1)(c) Arbitration and Conciliation Act**, **Cap.4** (**ACA**) defines the essence of an arbitration agreement as "*an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not*".
Therefore the **S.2(1)(c) ACA** definition cures any defect created by a terse or rambling dispute resolution clause.
Further **S.3(2) ACA** stipulates that arbitration agreement shall be in writing. This is the mandatory standard, not the manner in which references to arbitration should be expressed or styled.
I am satisfied that the Respondent's deaf ear treatment to the Applicant's requests to establish a tribunal, establishes the merits of this Application.
I shall accordingly appoint the arbitrator in the consequential Ruling.
Costs are awarded to the Applicant.
**Delivered at Kampala on 21st October 2014.**
**…………………………………………………………. JIMMY MUYANJA, EXECUTIVE DIRECTOR.**