[2017] UGCommC 250

[2017] UGCommC 250

The court found that it has substantive power and discretion under Section 34(5) of the Arbitration and Conciliation Act and Rule 12 of the Arbitration Rules to order security for performance of an arbitral award where an application to set aside the award is pending. The absence of assets within the jurisdiction, especially for a Ugandan-registered company, and the lack of prejudice to the respondent if security is ordered, are sufficient grounds to grant the application. The court distinguished authorities cited by the respondent and found that the risk of non-recovery by the applicant justified the order. The respondent is therefore ordered to provide security, such as an irrevocable...

Citation
[2017] UGCommC 250
Parties
Applicant: Excel Construction Limited; Respondent: GCC Services (U) Limited
Court
Commercial Court of Uganda
Jurisdiction
Uganda
Judgment Date
6 September 2017
Case Number
Miscellaneous Cause No. 156 of 2017
Procedural Posture
Miscellaneous Cause / Application for Security for Performance of Arbitral Award Pending Determination of Application to Set Aside Award
Outcome
application granted
Legal Topics
Arbitration Awards, Security for Performance, Enforcement of Arbitral Awards, Setting Aside Awards
Source Language
English
Commercial and Corporate Alternative Dispute Resolution Arbitration Awards Security for Performance Enforcement of Arbitral Awards Setting Aside Awards

Case Brief

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Parties

Excel Construction Limited

Applicant

GCC Services (U) Limited

Respondent

Procedural Posture

Miscellaneous Cause / Application for Security for Performance of Arbitral Award Pending Determination of Application to Set Aside Award

Legal Issues

  1. 1 Whether the respondent should be ordered to furnish security for the performance of the arbitral award pending determination of the application to set aside the award.
  2. 2 Whether absence of assets within the jurisdiction justifies an order for security for performance of the award.

Ratio Decidendi

The court found that it has substantive power and discretion under Section 34(5) of the Arbitration and Conciliation Act and Rule 12 of the Arbitration Rules to order security for performance of an arbitral award where an application to set aside the award is pending. The absence of assets within the jurisdiction, especially for a Ugandan-registered company, and the lack of prejudice to the respondent if security is ordered, are sufficient grounds to grant the application. The court distinguished authorities cited by the respondent and found that the risk of non-recovery by the applicant justified the order. The respondent is therefore ordered to provide security, such as an irrevocable...

Court Disposition

application granted

Orders

  • The respondent is ordered within 30 days to deposit in court security, such as an irrevocable bank guarantee or other security acceptable to the applicant, for the due performance of the entire arbitral award.
  • Costs of the application shall be in the cause.