High Court Clarifies Limits of Judicial Recourse Against Arbitral Awards Under Section 34 of the Arbitration and Conciliation Act

Lawpointuganda
May 22
3 min read

Legal Brief on Waatunga v Finca Uganda Limited (Civil Miscellaneous Application 4 of 2024) [2025] UGHC 314 (21 May 2025)

Area of law: Arbitration Law.

Introduction

The High Court has reaffirmed the narrow scope for challenging arbitral awards under Uganda’s Arbitration and Conciliation Act, specifically under Sections 34(2) and 34(3).

The Court emphasized that judicial intervention is only permitted within the strict confines of the Act, and that grounds such as delay in rendering the award or perceived bias must meet high legal thresholds.

Background In this case, the applicant sought to set aside an arbitral award under Section 34 of the Act, citing three main grounds:

Manifest bias by the arbitrator,
Delay in delivering the award, and
Violation of public policy.

Ground 1: Alleged Bias of the Arbitrator

The applicant alleged the arbitrator was biased due to a reference in the award to unpaid fees of UGX 7,000,000.

However, the High Court rejected this claim, noting:

The alleged bias was not clearly identified as actual or apparent.
The mere mention of unpaid fees, which was admitted by both parties, did not amount to justifiable doubt as to the arbitrator’s impartiality.
Citing the UK Supreme Court in Halliburton v Chubb [2020] AC 1083, the Court applied the objective test: whether a fair-minded and informed observer would conclude that there was a real possibility of bias. On the facts, the test was not met.

Moreover, the Court observed that the arbitrator reduced the respondent’s claim based on the applicant’s admitted liability—further undermining the bias allegation.

Ground 2: Award Contrary to Public Policy

The applicant argued that the award was contrary to public policy due to failure to consider broader financial implications and interest rates.

The Court found:

The agreement between the parties was entirely contractual, and no specific force majeure arguments were supported in law.
The arbitrator’s failure to address certain macroeconomic issues did not rise to the level of violating public policy.
Therefore, this ground failed as a matter of law.

Ground 3: Delay in Rendering the Award

The award was delivered more than two years after the arbitrator accepted the appointment (Nov 16, 2021 – Mar 12, 2024).

The applicant argued this delay invalidated the award under Section 31(1).

However, the Court held:

The delay was due to non-payment of arbitrator’s fees, and it was unrebutted that the arbitrator had made repeated demands.
Section 31(1) allows the arbitrator to enlarge the time for making the award, which the Court deemed applicable here.
Importantly, failure to deliver an award within the stipulated time is not a ground for setting aside the award under Section 34.

The court made a comparative reference to the U.S. case Hohenzheft v Superior Court of Los Angeles County (2024) 318 Cal.Rptr.3d 475, where the court ruled that arbitrators cannot unilaterally extend time limits.

The Ugandan legal position differs, but the Court noted that this ambiguity warrants legislative review.

Procedural Compliance

The Court confirmed that the application was filed within the statutory deadline, on April 4, 2024, less than one month after receipt of the award on March 12, 2024, in accordance with Section 34(3).

Conclusion and Implications

The High Court dismissed the application, holding that:

None of the alleged grounds—bias, delay, or violation of public policy—met the strict legal standards under the Arbitration and Conciliation Act.
The application failed to raise any substantive questions of law.
Costs were awarded to the respondent.

Commentary

This decision reinforces the principle of minimal judicial interference in arbitration and affirms Uganda’s pro-arbitration stance. It also highlights the need for greater clarity in legislative drafting, particularly regarding the extension of time under Section 31(1), to align with international best practices.