KPI Health Care Limited v Unipharma Limited & Another (Miscellaneous Application 1328 of 2022) [2023] UGCommC 229 (21 February 2023)

### THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION)

# MISC. APPLICATION NO. 1328OF 2022 (ARISING FROM CrVrL SUrT NO. 07Ot OF 2022) KPI HEALTH CARE LIMITED : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : APPLICANT

#### VERSUS

### UNIPHARMA LIMITED

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## UNIPHARMA FC (MALAYSIA) SDN BHD: : : : : : : : : : : : : : : : : : : Rf, SPONDENTS BEFORE: HON. LADY JUSTICE ANNA B. MUGENYI

#### RULING

I have read the pleadings and considered the written submissions of the Applicant in this matter.

The Applicant brought to the attention of this court the existence of an arbitral agreement /clause between the parties i.e. in the Contract Manufacture Agreement signed by the parties on 31912018.

I have read the arbitration agreement in clause l7 of the said Contract Manufacture Agreement and the same is very clear and self-explanatory. Clearly any disputes arising under the Agreement in issue are to be referred for arbitration.

The contention of the Respondents, however, appears to be that there is no dispute to be referred for arbitration for reasons laid out in the submissions of counsel for the respondents (see paragraphs 9 (l) to (12), 10,11,12, 14, l5 and l6); and funher that the SUPAVITAM supplied to the Applicant met the regulatory requirements because the said consignments were issued with importation certificates at the time of importation and that any issues regarding quality of the consignments in issue should have been raised within 21 days by the Applicant which was not done.

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The Applicant on the other hand contends that there is a dispute as to whether the SUPAVITAM supplied by the Respondents to the Applicant met the requisite regulatory requirements and was of good quality as agreed in the Agreement in issue.

I have had an opportunity to look at the plaint and written statement of defense of the respective parties on court record. While the Respondents filed the main suit from which this matter arose seeking recovery of USD 43,555 being the outstanding balance on the contract price for the supply of SUPAVITAM, the Applicant contends, in their defense, that the said sum of monies is not due to the Respondents as the SUPAVITAM supplied to it did not contain some of the components as stated on its label and the certificate of analysis provided by the Respondents and as such could not be sold (see paragraph 5 (i) to (ix) and 6 of the written statement of defense).

To this Court and from the pleadings of the parties herein, clearly there is a dispute between the parties as to whether the SUPAVITAM supplied by the Respondents was of good quality to entitle the Respondents payment of USD 45,333 by the Applicant as the balance on the contract sum claimed by the Respondents in the plaint.

The parties freely agreed to the arbitral clause above mentioned and it is the duty of this Court to enforce the same (see Printing & Numerical Registering Company Vs Sampson (1875) 19 EQ 462 & Stockloser versus Johnson (1954) 1 ALL ER $640$ ).

The Arbitration and Conciliation Act (Cap 4) and several case law are instructive on the role of courts where a matter is the subject of an Arbitration clause/agreement (see Section 9 and 5 of the said Act; and British American Tobacco Uganda Ltd versus Lira Tobacco Stores HCMA 310/2013; Daniel Delestre & Others versus Hits Telecom HCMA 310/2013 inter alia).

In the premises and given the existence of a clear arbitration clause or agreement that was willingly endorsed / entered into by the parties as seen above; the present matter is referred for Arbitration proceedings to ensue.

As guided by the aforementioned authorities; Civil Suit 701 of 2022 lapses as the entire dispute is referred for resolution through arbitration in accordance with the Agreement/Contract between the parties the subject of which can only return to this Court for appellate or supervisory interventions as provided for under the Arbitration and Conciliation Act.

$\mathsf{Z}$

Further, costs occasioned by commencing the suit in this Court shall be determined by the arbitral tribunal appointed to handle the arbitration proceedings and the said issue of costs is accordingly referred to it.

Having held as I have above, I do not find it necessary to address the other issue raised by the Respondents at this point.

This file shall be closed accordingly.

montale.

HON. LADY JUSTICE ANNA B. MUGENYI **DATED**....................................