Sugar Corporation of Uganda Limited v Kanabolic Group of Companies Limited (Civil Appeal 57 of 1995) [1996] UGSC 33 (16 August 1996)

#### CORAM: IN THE SUPREME COURT OF UGANDA AT MENGO ODOKI JSC, ODER JSC & TSEKOOKO JSC)

#### CIVIL APPEAL NO. 57 OF 1995

BETWEEN

SUGAR CORPORATION OF UGANDA LTD. APPELLAV"

#### AND

RESPONDENT KANABOLIC GROUP OF COMPANIES LTD.

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

#### in

. Misc. Application No. 274 of 1995)

#### JUDGMENT OF ODOKX, 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.

was When he made the award. the appellant was •\* '• the Arbitrator was biased and the award excessive. heard and dismissed. The\* brief facts.giving rise to this appeal are that an Arbitrator 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 so and extended the period for one month. He still failed to complete the work and extended it for a further month. When the hearing started he extended the time within which to give the award. 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 application was

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

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

The appellant has These grounds raise appealed against that decision on six grounds, mainly two complaints. The first is that the 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) UL'SLR 220; in support of his contention.

In reply, Dr. Barya for the respondent, submitted that the Learned Judge was 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 <sup>7</sup> of the Arbitration Rulczs aul 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.

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

Act and Rules "Miscellaneous Application No. 17 of 1994 was filed under Section 12 of the Arbitration 7, 8 and 16 of SI 55 - 1 Cap. 65. The present notice of motion is filed under the same Section and Rule <sup>7</sup> 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."

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I! II

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

"No Court shall try any Suit or issue in which the matter directly and substantially in issue has been directly <sup>P</sup>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."

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

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''The to of test whether or not a suit is barred by resjudicata seems to be - is the plaintiff in the second suit trying bring before the Court, in another way and in the form a new cause of action, a transaction which he has already put before a Court of competent jurisdiction in proceedings and which has been adjudicated upon. 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 AUER 255. The subject matter in the subsequent suit must be covered by the previous suit for resjudicata to apply. Jadva Karsan <sup>v</sup> Haraman Singh Bhogal (1953) <sup>20</sup> EACA 74.". earlier If so,

In the present case, the issue of illegality Gught to have been raised in the previous application which challenged 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 ollend tne 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,

para 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 3 of Schedule 1 which was an alternative to Section 10 of the Act.

Section 10 of the Arbitration Act provides,

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''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."

*<sup>f</sup> Certify that* **a Copy of** *the Original \* **V <sup>I</sup> Supreme q.**

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

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, or on or 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,

"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,

*Sy.* **a '** day o

*S'\'* B. J. Odoki . JUSTICE OF SUPREME COURT.


Delivered at Meivjo this **ts**

# THE REPUBLIC OF UGANDA ' IN THE SUPREME COURT OF UGANDA AT <sup>m</sup>I<sup>n</sup>GCT

### **CIVIL APPEAL NO** ^^OF 1995

# SUGAR CORPORATION OF UGANDA LTD APPELLANT

## VERSUS

kanoblic group of **COMPANIES LTD.**

RESPONDENT

'. V

# ORDER

**IN COURT BEFORE ODOKI JSC**

**ODER JSC**

**TSEKOOKO JSC**

THIS APPEAL coming for hearing the 13th day ofJune 1996 in the presence of Mr. Mulira, Advocate for the appellant and Dr. John Jean Barya, Advocate for the respondent when the appeal was stood for judgement.

IT IS ORDERED that the appeal be and is hereby dismissed with costs to the Respondent.

DATED at Kampala this 15th day of August, 1996

EXTRACTED on the ... day of 1996 WE APPROVE:

M/S SEBALU, LULE, MULIRA & CO. ADVOCATES COUNSEL FOR THE APPELLANT

DRAWN AND FILED BY: BARYA, BYAMUGISHA & CO. ADVOCATES AFRICA HOUSE 3RD FLOOR PLOT 42 KAMPALA ROAD P. 0. BOX 12031, KAMPALA

M/S BARYA, BYAMUGISHA & CO. ADVOCATES COUNSEL FOR THE RESPONDENT