Sugar Corporation of Uganda Limited v Kanabolic Group of Companies Limited (Civil Appeal 57 of 1995) [1996] UGSC 29 (15 August 1996)

Full Case Text

# IN :e supreme court of Uganda at mengo CORAM: ODOKI JSC, ODER JSC & TSEKOOKO JSC)

#### CIVIL APPEAL NO. 57 OF 1995

BETWEEN

SUGAR CORPORATION OF UGANDA LTD. APPELLANT AND

KANABOLIC GROUP OF COMPANIES LTD. RESPONDENT

' (Appeal from Ruling and Order of the High Court (Mukasa Kikonyogo, J) dated 20th July, 1995

Misc. Application No. 274 of 1995)

#### JUDGMENT OF ODOKI, JSC

an This is an Appeal against the Ruling of the High Court whereby application by the appellant seeking to set aside an earlier ruling was dismissed.

so When he made the award, The application was heard and dismissed. and extended the period for one month, work and extended it for a further month. The brief facts giving rise to this appeal are that an Arbitrator was appointed to deal with a dispute which had arisen out of a contract between the appellant and the respondent. The Arbitrator was supposed to complete the arbitration within three months but was unable to do He still failed to complete the When the hearing started he extended the time within which to give the award. the appellant was dissatisfied with it and applied to the High Court under Misc. Application No. 17 of 1994, to set aside the award on the grounds that the Arbitrator was biased and the award excessive.

Dissatisfied with that dismissal the appellant then filed two applications. The first application was to set aside the arbitrators award. The second application was for stay of execution pending the determination of the first application.

It held that the It found the The Court heard both applications together, first application was resjudicata-' and dismissed it. second application incompetent as there was no pending suit and dismissed it.

The first is that the The appellant has appealed against that decision on six grounds. These grounds raise mainly two complaints. Learned Judge erred in Law in holding that the application to set aside the arbitrator's award was resjudicata. The second complaint is that the Learned Judge erred in Law in not determining the application on the merits when an issue of illegality was raised.

Mr. Mulira, Learned Counsel for the Appellant, submitted that although the matter looked to be resjudicata, the Court had power under Section 101 of the Civil Procedure Act to revisit it in view of the issue of illegality. According to Mr. Mulira, the illegality committed by the arbitrator was to extend the period within which to make the award, without the consent of the Court as required by Section 10 of the Arbitration Act. Therefore the arbitrator acted without jurisdiction and the award was 'fainted with illegality. Counsel relied on Makula International v Cardinal Nsubuga (1982) HCB 11, to support his submissions.

Mr. Mulira conceded that the question of illegality was not raised in the previous application which had been dismissed (i.e. Miselleneous Application No. 17/94) but argued that failure to raise a question of law in earlier proceedings did not make the matter resjudicata, because a Court of law could not give sanctury to an illegality which has been brought to its attention. He cited Central Masaka Coffee Co. V Masaka Farmers & Producers Ltd (1991) U L S L R 220; in support of his contention.

was In reply, Dr. Barya for the respondent, submitted that the Learned Judge correct in holding that the application was resjudicata because like the previous application it was brought under Section 12 of the Arbitration Act and Rule 7 of the Arbitration Rules and prayed for the same relief that the arbitrator's award be set aside. It was Counsel's contention that the issue of illegality could have been raised in the first application, but it was not.

**I1**

He relied on the case of Semakula v Magala (1993) 11 KALR 2 and that of Kamunye v Pioneer Assurance Society Ltd (1971) E. A. 263 to support his arguments.

In coming to her conclusion that the matter raised in the application was resjudicata, the learned Judge said,

**it-**'Miscellaneous Application No. 17 of 1994 was filed under Section 12 of the Arbitration Act and Rules 7, 8 and 16 of SI 55 - 1 Cap. 65. The present notice of motion is filed under the same Section and Rule 7 of SI 55 - 1. Both applications were seeking to set aside the award made in favour of the respondent by the same arbitrator. Miscellaneous Application 17 was heard and decided inter party. Both parties had legal representation. In my considered view, the issues raised in the present application are substantially the same as those raised in Miscellaneous Application No. 17 of 1994."

The doctrine of resjudicata is provided for in Section 7 of the Civil Procedure Act as follows:—

**ii** 'No Court shall try any Suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the parties under whom they or any of them claim, litigating under the same title, in a Court completent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by the Court."

The scope of that Section and its explanations was considered in Kamunye v Pioneer Assurance Ltd (supra) where Law Ag. V. P. said,

in The test whether or not a suit is barred by resjudicata seems to be - is the plaintiff in the second suit trying to bring before the Court, in another way and in the form of a new cause of action, a transaction which he has already put before a Court of competent jurisdiction in earlier proceedings and which has been adjudicated upon. If so, the plea of resjudicata applies not only to points upon which the first Court was actually required to adjudicate but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence might have brought forward at the time. Greenhalgh v Mallard (1947) 2 A||ER 255. The subject matter in the subsequent suit must be covered by the previous suit for resjudicata to apply. Jadva Karsan v Haraman Singh Bhogal (1953) 20 EACA 74."

In the present case, the issue of illegality Qught to have been raised in the previous application which challeaged the arbitrator's award because it was substantially in issue in that application. It was not so raised, and could not be raised in a subsequent and similar application as this would offend the principle of resjudicata. Therefore the Learned Judge was right in holding that the subsequent application was barred by resjudicata. The first ground of appeal and other grounds related to this issue must therefore fail.

The second substantial ground of appeal concerns the issue of illegality of the arbitrator's award. It criticises the Learned Judge for failing to hear the application on its merits as regards the issue of illegality. Dr. Barya for the respondent submitted that the award was not out of time or made without jurisdiction because the arbitrator exercised his powers to extend time under para. 3 of Schedule 1 which was an alternative to Section 10 of the Act. .

Section 10 of the Arbitration Act provides,

ti The time for making an award may from time to time, be enlarged by order of the Court, whether the time for making the award has expired or not."

This provision does confer upon the Court a power to enlarge time in which to make an award. But para 3 of Schedule 1 to the Act which contains ''provisions to be implied in Submissions" also gives an Arbitrator power to enlarge time. It provides,

or on or ''The Arbitrators shall make their award in writing within three months after entering on the reference or after having been called on to act by notice in writing from any party to the submission, before any later day to which the arbitrators, by any writing signed by them, may, from time to time, enlarge the time for making the award."

The provisions in Schedule 1 are implied in submissions to arbitrators by virtue of Section 4 of the Act which states,

ii A submission, unless a different intention is expressed therein, shall be deemed to include the provisions set forth in the First Schedule in so far as they are applicable to the reference under Submission."

It was not contended that the above provisions were not applicable to the submission to the arbitrator in this case. As they were applicable, they conferred upon the arbitrator the power to enlarge the time within which to make the award. Therefore it is not correct to argue that only the Court could enlarge the time. It follows that the arbitrator committed no illegality in enlarging the time within which to make the award. As there was no illegality I do not find it necessary to consider the authorities cited by Learned Counsel for the appellant because they are inapplicable to this case. Accordingly the the grounds complaining of illegality must fail.

I would dismiss it with costs • it is so ordered. In the result, I find no merit in this appeal. As Oder, JSC and Tsekooko, JSC agree,

Delivered at Mengo this **b.** day of 1996.

Bu>J. Odoki JUSTICE OF SUPREME COURT.

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# REPUBLIC OF UGANDA

# IN THE ONERSHE CO RT OF USANDA AT MENSO

# (J. M. M.: COCKI, J. J. C., CDUR, J. J. C., AND TIGKCIN, J. . C.)

# CIVIL APPTAL NO. 57/1995

### **BETHEEN**

SUGAR COA. CR. ITON OF U. ANDA LTD. .......... $\mathbb{R}^{\mathbb{Z}}\otimes\mathbb{Z}\otimes\mathbb{Z}\otimes\mathbb{Z}$

$AND$

KANABOLIC CROUP OF CONFANILS LTD...........

REL KOLKT

(Appeal from Ruling and Order of the High Court of Uganda at Kampala (Nukasa-Kikonyogo, J.) dated 27th July, $1995$

#### $\mathop{\rm IN}\nolimits$

### HIGO. AFFLIGATION NO. 274 CF 1995

JUDGIL NY OF TAINICK. J. M. C:

I have had the benefit of reading in draft the judgment prepared by ODCKI, J. S. C., and 1 concur. I have nothin; useful to add.

$15$ ..... day of ................................... Delivered at Mengo this.

J. M. N. TILKOK JUSTICH UP SUIRING GUU

### IN THE SUFFERE COURT OF UGAIDA

## AT RITIGO

### (CORALI: ODOKI, J. S. C., ODER, J. S. C., & TSEKOOKO, J. S. C.) CIVIL APPEAL NO. 57 OF 1995

#### BETWEEN

SUGAR CORPORATION OF UGANDA LTD. $\mathbf{1}:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;:\;$ APPELLANT AND KANAROLIC GROUP OF COMPANIES LTD. $\cdots$ **RESPONDENT**

> (Appeal from Ruling and order of the High Court at Kempala (Hukasa-Kikonyogo, J) dated 20.7.1995 in Misc. Application No. 274 of 1995)

## JUDGERIN OF ODER

I have had the benefit of reading the judgment of Odoli, J. S. C., and agree with him that the appeal should be dismissed with costs of the appeal and of the Court below.

$15th$ $\ldots$ dey of $\ldots$ . August...., 1996 Dated at Mengo this ....

$4801$ A. H. O. ODER, JUSTICE OF THE SUPER ROURT