Blue Pearls Company Limited v Britam Insurance Company Limited (Miscellaneous Cause 93 of 2021) [2022] UGCommC 181 (19 November 2022)

⁵ THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA (coM M ERCTAL COURT DMSTON)

MISCELLANEOUS CAUSE NO. 93 OF 2O2L

BLUE PEARLS COMPANY LIMITED::!::t::::::1::::::::t:::::::::::::i:i::::r: APPLICANT

VERSUS

BRITAM INSURANCE COMPANY LIMITED:::::::::::::::::::::::::::::: RESPONDENT

BEFO RE: HON. LADY ]USTICE ANNA,8, MUGENYI

RULING

¹⁵ I have read the pleadings and listened to the submissions of the parties in this matter.

The main issue before this Court for determination is whether the arbitral award in CADER/ARB No. 39/2021 should be set aside.

Section 34 of the Arbitration and Conciliation Act (cap 4) provides:

34. Application for setting aside arbitral award

(i).... (ii).... (iii).... (iv).... (v).... (vi).... (vii)....

- 1. Recourse to the court against an arbitral award may be made only by an application for setting aside the award under subsections (2) and (3). - 2. An arbitral award may be set aside by the court only if - (a) The party making the application furnishes proof that -

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- ⁵ (b) The court finds that- - (i)....

(ii) The award is in conflict with the public poliry of Uganda.

Public policy was defined at length by Hon. Justice Stephen Mubiru in the case of Lakeside Dainr Limited V International Center For Arbitration And Mediation Kamoala & Another M. C. 002112021 which was cited by counsel for the Applicant herein; and wherein while referring to the case of Cooke v Turner ft845) 60 Eng Reo. 449 at 502 where it was held ceftain Acts or Contracts are said to be against public policy if they tend to promote breach of the law...the Hon. ludge held as follows: 10

"Although public policy is a most broad concept incapable of precise definition, an award could be set aside under the Act as being inconsistent with Constitution or other laws of Uganda whether written on unwritten...." 15

The laws of Uganda and specifically the Contracts Act, 2010 which is the relevant law in this case, provide that a contract the subject of which exceeds 25 currency points shall be in writing (see section 10(5) of the Act). As pointed out by counsel for the Applicant, 25 currency points are the equivalent of UGX 20,000/= each totaling to UGX

500,000/=; and the unsigned policies in issue which were 22 in number were relied on by the arbitral tribunal to award UGX 215,000,000/= and USD 2000. 20

I have had the opportunity to look at the unsigned policies in issue and noted that the same were not signed by the respective parties. This fact was acknowledged by the arbitral tribunal referred to the same throughout it's award as "unsigned policies" but it went ahead to make the award based on them.

Clearly, not only were the policies in issue unsigned rendering them not binding on the parties but also the said unsigned policies were relied on by the tribunal to award UGX 215, 465,2251= and USD 2832 as amounts for premiums due and owing contrary to contract laws of Uganda.

5 10 In the case of HJK Tradino Co. Ltd v Ahmed Zziwa C. S 475 of 2078, Hon. Justice John Eudes Keitirima held that a suit that sought to enforce a contract that offends the provisions of Section 10(5) of the Contracts Act 2010 is incompetent, bad in law, barred by law and dismissed the same with costs. In that suit the plaintiff relied on an oral sublease assignment agreement entered by the parties for a consolidation of USD 1,500,000 to file his suit yet the said consolidation exceeded Wventy-five currency points that required the contract to be in writing as provided in section 10(5) of the Contracts Act.

Applying the above authority to the present matter; the undersigned policies that resulted in an award that exceeded twenty-five currency points and should have been in writing and duly signed by the parties, are barred by law; and being inconsistent with the Contracts Act/laws of Uganda resulted in an award that is against public policy.

In the nutshell; the arbitral award in CADER/ARB No. 39/2021 having been procured in contravention of Section 34(2)(b)(ii) of the Arbitration and Conciliation Act (Cap 4) is accordingly set aside. Costs of the application are awarded to the Applicant.

20 25 Before I take leave of this matter, counsel for the Respondent submitted that the affidavit in support of the application should be struck out for being prolix and argumentative. I have looked at the said affidavit and do not find it prolix or argumentative but rather an attestation of the Applicant's case as it is. Counsel for the Respondent's submission appears to be an afterthought meant to mislead the couft; and I accordingly decline to strike out the affidavit in issue as prayed.

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30 HON. LADY JUSTICE ANNA .8. MUGENYI DATED:....... I Q.l.r t .l. Lt...

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