BY Joseph Kiggundu
The High Court Commercial Division has declined to hear a case in which Kampala lawyer Charles Odere was seeking to recover about USD 400,000 (approximately UGX 1.44 billion) linked to the Arena Mall project, instead directing the parties to resolve the matter through arbitration.
In its decision delivered in December, the court ruled that the dispute arises from a shareholder agreement that clearly provides for arbitration as the preferred method of resolving disagreements. As a result, the court held that it could not proceed with the case before the agreed dispute resolution process is exhausted.
Odere had sued several companies involved in the Arena Mall development, arguing that the money he advanced constituted a shareholder loan that should be repaid with interest. However, the respondents challenged the suit, pointing to provisions in the project’s governing agreements that require disputes to be settled outside the courts.
The judge agreed with the respondents, emphasizing that courts are bound to respect contractual arbitration clauses, particularly in commercial arrangements involving sophisticated parties. The court further noted that there was no evidence showing that the arbitration agreement was unlawful or incapable of being enforced.
As a result, the suit was dismissed, with costs awarded to the respondents, and the lawyer was directed to pursue his claim through arbitration as stipulated in the agreement.
Legal analysts say the ruling reinforces Uganda’s commitment to alternative dispute resolution, offering reassurance to investors that courts will uphold contractual obligations and agreed dispute resolution mechanisms.
The Arena Mall dispute will now move to private arbitration, where the merits of the claim will be considered.