Balambuli Kwigate Coffee (BKC) Limited v Ibero (U) Limited (Miscellaneous Cause 6 of 2024) [2025] UGCommC 55 (11 April 2025)

## 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [COMMERCIAL DIVISION] MISCELLANEOUS CAUSE NO. 0006 OF 2024 (Arising from PCCL/ARB/08/2023)** 10 **BALAMBULI KWIGATE COFFEE (BKC) LIMITED ::::::::::::::::::::::::APPLICANT VERSUS**

# **IBERO (U) LIMITED ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

Before Hon. Lady Justice Harriet Grace Magala

#### Judgment

#### 15 **Background**

This is an application to set aside the Award of the Arbitrator in PCCL/ARB/08/2023 that was delivered on the 7th December 2023. The Application was brought under Section 34 of the Arbitration and Conciliation Act Cap. 4 (now Cap. 5) and Rule 13 of the Arbitration Rules. The Applicant/ 20 Claimant sought for orders that:

- a) The arbitral award in PCCL/ARB/08/2023 be set aside; and - b) The Respondent pays the costs of the application.

The grounds of the application were supported by an affidavit sworn by Mr. Bernard Mukhone, the Managing Director of the Applicant, but briefly are:

- 25 1. That the arbitral award is not in accordance with the Act; - 2. That that the arbitral procedure adopted by the Arbitrator was not in accordance with the agreement of the parties; - 3. The Arbitrator lacked jurisdiction to adjudicate the question/issue of crop finance in the dispute; - 30 4. That the arbitral award is in conflict with the public policy of Uganda; and - 5. That the arbitral award is fraught with errors on the face of the record.

Page **1** of **7**

- 5 The Respondent opposed the application, whose affidavit in reply was deposed by Mrs. Gabrielle Rosenau Odette, the Country Manager of the Respondent. She briefly stated that: - 1. Both parties entered into two agreements for the provision of seasonal crop finance advances for coffee processing and investment loan capital 10 dated 2nd June 2021 and 22nd December 2021; - 2. Both agreements provided for arbitration as a dispute resolution mechanism under Clause 13; - 3. Both parties jointly appointed Hon. Justice Bart M. Katureebe- Chief Justice Emeritus as their Arbitrator, and the procedure the Arbitrator 15 adopted was at all material times in accordance with their Agreement; and - 4. The arbitral award was delivered in accordance with the Act, and this application was only intended to delay and frustrate the Respondent's realization of the fruits of the Award.

#### 20 **Appearance and representation**

The Applicant was represented by M/s Cardigan Arbitration LLP and later MMAKS Advocates, while M/s Nangwala, Rezida & Co. Advocates represented the Respondent. Both parties filed their written submissions, which have been duly considered by the court.

#### 25 **Issues for determination**

- 1. Whether the Arbitral Award in Balambuli Kwigate Coffee Ltd vs. Ibero (U) Ltd PCCL/ARB/08/2023 should be set aside - 2. What remedies are available to the parties?

#### 5 **Determination**

Issue 1: Whether the Arbitral Award in Balambuli Kwigate Coffee Ltd vs. Ibero (U) Ltd PCCL/ARB/08/2023 should be set aside

## **Section 34(2)(a) & (b) of the Arbitration and Conciliation Act Cap. 5** provides that:

| 10 | "2. An Arbitral award may be set aside by the court only if | |----|-------------------------------------------------------------| |----|-------------------------------------------------------------|

- a) The party making the application furnishes proof that- - (i) a party to the arbitration agreement was under some incapacity; - (ii) the arbitration agreement is not valid under the law to which 15 the parties have subjected it or, if there is no indication of that law, the law of Uganda; - (iii)the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was unable to present his or her case; - 20 (iv)the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration; except that if the decisions on matters referred to arbitration can be separated from those 25 not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside; - (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the 30 parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate, or in the absence of an agreement, was not in accordance with this Act;

- 5 (vi)the arbitral award was procured by corruption, fraud, or undue means, or there was evident partiality or corruption in one or more of the arbitrators; or - (vii) the arbitral award is not in accordance with the Act; - b) the court finds that- - 10 (i) the subject matter of the dispute is not capable of settlement by arbitration under the law of Uganda; or - (ii) the award is in conflict with the public policy of Uganda."

The Applicant raised five (5) grounds but argued one (1) regarding the arbitral award not being in accordance with the Act. The Applicant submitted that the 15 reference on the arbitration was entered on 3rd April 2023 when the Arbitrator accepted the parties' appointment as their sole Arbitrator. The Applicant contended that the two-months period within which to render the arbitral award started running on 3rd April 2023 and lapsed on 4th June 2023, as stipulated under **Section 31(1) of the Arbitration and Conciliation Act Cap.**

- 20 **5.** The Arbitrator was under an express statutory obligation to extend his temporal jurisdiction through a procedural order signed by him, which he failed to perform and this rendered nugatory any proceedings beyond 4th June 2023. Consequently, the Arbitrator had no jurisdiction to render the Arbitral Award on 7th December 2023, and thus, the Award was delivered outside the - 25 statutory time limit set as guided by **Section 31(1) of the Arbitration and Conciliation Act Cap. 5**.

The Respondent submitted that following Procedural Order No. 1, the Arbitrator directed the parties to attend their 2nd Pre-Arbitration meeting on the 5th of June 2023 to agree on issues, filing submissions, and hearing dates, to which both 30 parties agreed to and attended both physically and virtually. The Respondent further submitted that the timelines were at all times adjusted at the parties' instance by mutual agreement through email correspondences, which were also notified to the Arbitrator.

#### 5 **Section 31(1), (2), and (3) of the Arbitration and Conciliation Act states that:**

(1) The arbitrators shall make their award in writing within two months after entering on the reference, or after having been called on to act by notice in writing from any party to the submission, or on or before any later day to which the arbitrators, by any writing signed by them, may enlarge the time for

10 making the award.

(2) If the arbitrators have allowed their time or extended time to expire without making an award or have delivered to any party to the submission or the umpire a notice in writing stating that they cannot agree, the umpire may forthwith enter on the reference in place of the arbitrators.

- 15 (3) The umpire shall make his or her award within one month after the original or extended time appointed for making the award of the arbitrators has expired, or on or before any later day to which the umpire, by any writing signed by him or her, from time to time, enlarged the time for making his or her award. - 20 In the case of **Smile Communications Uganda Ltd vs. ATC Uganda Ltd and Anor Arbitration Cause No. 0004 of 2022, Hon Justice Stephen Mubiru** observed that:

*"Unlike court proceedings, arbitrators derive their jurisdiction from the parties' agreement to arbitrate. Where a time limit is imposed within which* 25 *the tribunal must make its award, failure to deliver an award within the specified time limit may mean that the parties' consent to arbitration has lapsed and any arbitration award issued after the deadline may be unenforceable…If an arbitral award is not made either within the statutory time period or the extended period, then the mandate of the tribunal stands* 30 *terminated as it becomes functus officio (see Suryadev Alloys and Power Pvt. Ltd. v. Shri Govindaraja Textiles Pvt. Ltd, AIR (2010) SC 640). (emphasis mine)"*

- 5 The Parties agreed to use e-mail as a mode of communication during the arbitration proceedings. I have had the benefit of reviewing all the attached email correspondences. I have established that the filing of written submissions was extended by mutual agreement of the parties, with the last date being 7th November 2023. The Arbitral tribunal accepted this. Annexture IB 10, attached - 10 to the Respondent's affidavit in reply, is an email dated 29th November 2023 sent at 12:59 pm from the Arbitrator notifying the parties that due to unavoidable circumstances, the award would be delivered on the 7th December 2023 and not the earlier agreed date of 4th December 2023. I believe that it naturally follows that if the parties, by mutual consent, agreed to adjust the - 15 timelines within which to file their submissions, the Arbitrator could not maintain his earlier date of rendering the award. This was communicated to the Parties, as noted above. The Arbitrator couldn't prepare and render his decision on the agreed date if the parties' submissions were not on record. The Arbitrator rightly exercised his discretion to enlarge the time to render the - 20 award, and he communicated as much. Therefore, the Applicant is hereby estopped from claiming that the Award was to be delivered by 5th June 2023, within a two-month period as required by law.

According to section 31(1) of the Arbitration & Conciliation Act and the decision of Hon. Justice Stephen Mubiru in *Smile Communications Uganda Ltd vs.*

25 *ATC Uganda Ltd and Anor (Supra),* the award is enforceable because it was made and delivered within the extended period notified by email to both parties.

Therefore, I find that the Arbitral Award was arrived at and delivered in accordance with the law. This application is hereby dismissed with costs to the

30 Respondent.

Issue 2: What remedies are available to the Parties?

## **Section 36 on enforcement of the Arbitration and Conciliation Act states that:**

5 "Where the time for making an application to set aside the arbitral award under section [34](https://ulii.org/akn/ug/act/2000/7/eng@2024-12-23#part_II__sec_34) has expired, or that application having been made, it has been refused, the award shall be enforced in the same manner as if it were a decree of the court". Emphasis is mine

Per section 36 of the Act, the Respondents can enforce the Award in 10 PCCL/ARB/08/2023 delivered on the 7th December 2023.

### **Dated and signed at Arua this 11th day of April 2025.**

**Harriet Grace Magala**

**Judge**

15 **Delivered online via ECCMIS this 14th day of April 2025.**