Evidentiary proof of agreement to arbitrate: Busenvi Enterprise Ltd v Makindye Ssabagabo Municipal Council, Civil Suit No 400/2019
In a suit involving a road construction, the Plaintiff sought against the Defendant remedies that included, among others, specific performance, damages, interest, and costs. When the suit came up for hearing, the Defendant raised a preliminary objection that the matter be referred to arbitration in light of the provisions of the General Conditions of Contract, and sections 5 and 9 of the Arbitration and Conciliation Act.
In a decision issued on July 1, 2022, the trial judge rejected the preliminary objection raised. Nambayo, J. ruled that evidentiary proof is necessary for a determination to refer the matter to arbitration, holding that section 5 of the Arbitration and Conciliation Act requires a party to “apply to court”. The evidentiary proof requires there be “a formal application” for a court to determine, as a matter of law, that the matter be referred to arbitration. A preliminary objection on a point of law will not suffice. The judge ordered the matter proceed for hearing and left it to the Defendant to file a formal application on referral to arbitration.
The ruling in the matter underscores the principle that there must be an application in terms of section 5 of the Act, which serves as a basis of a hearing conducted by a court to ascertain voidness, inoperativeness, and incapability of performance of an arbitration agreement, or the absence of an arbitrable dispute. A court must ascertain the prima facie existence of an arbitration agreement and arbitrable dispute. This requires evidence before the court.
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No information contained in this alert should be construed as legal advice from ALP East Africa or ALP Advocates or the individual authors, nor is it intended to be a substitute for legal counsel on any subject matter.
For additional information in relation to this alert, please contact the following:
- Lastone Balyainho Gulume
Practice Director/Head, Dispute Resolution Department
lgulume@alp-ea.com
- Henry Onoria
Head, Law Consulting & Knowledge Department
honoria@alp-ea.com
