An arbitration clause is a contract within a contract. By it, the parties withdraw their disputes from
the ordinary court system and submit them to a private tribunal of their own choosing. Arbitration
in Uganda is governed by the Arbitration and Conciliation Act, Cap 5, and section 2 thereof
defines an arbitration agreement as an agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not. Relatedly, section 3 of the Arbitration and Conciliation
Act, Cap 5 requires the agreement to be in writing and permits it to take the form of a clause in a
contract.

An arbitration agreement is consensual and derives its entire force from the agreement of the
parties. It is separable, since section 16(1)(a) of the Arbitration and Conciliation Act, Cap 5 treats
it as an agreement independent of the other terms of the contract, so that it survives any challenge
to the main contract. Pursuant to section 5(1) of the Arbitration and Conciliation Act, Cap 5, a
court seized of a matter covered by an arbitration agreement has to refer it to arbitration unless
the agreement is null and void, inoperative or incapable of being performed, or there is in fact no
dispute, and section 9 of the Act bars the court’s intervention save as the Act provides.

The Commercial Division has accordingly held that a court has no discretion under section 5(1) to
decline a reference: British American Tobacco (U) Ltd v Lira Tobacco Stores, HCMA No. 924 of
2013, [2013] UGCommC 192. The Supreme Court, in Babcon Uganda Ltd v Mbale Resort Hotel Ltd,
SC Civil Appeal No. 06 of 2016, affirmed the position that section 9 of the Arbitration and
Conciliation Act, Cap 5 ousts the jurisdiction of the court except as provided for in the Act itself.
Ugandan courts construe arbitration clauses on principles settled in the English authorities, as
follows:

i. In Heyman v Darwins Ltd [1942] AC 356, [1942] 1 All ER 337 (HL), the House of Lords held that
an arbitration clause must be construed according to its language and in the light of the
circumstances in which it was made.

ii. In Fiona Trust & Holding Corporation v Privalov; Premium Nafta Products Ltd v Fili Shipping Co
Ltd [2007] UKHL 40, Lord Hoffmann discarded the fine distinctions previously drawn between
formulations such as “arising under” and “arising out of”, and held that construction should
start from the assumption that the parties, as rational businessmen, intended any dispute
arising out of their relationship to be decided by the same tribunal, unless the language
makes clear that certain questions were excluded.

The Commercial Division adopted both authorities as persuasive in deciding the case of ShimizuKonoike Joint Venture v Abubaker Technical Services & General Supplies Ltd, HCMA No. 436 of
2024, [2024] UGCommC 223. The presumption, however, governs the scope of an agreement that
exists; it does not extend to instances where a party’s consent to the arbitration agreement was
never given.

The Dispute

On 18th January 2021, Shimizu-Konoike Joint Venture, the contractor on the Kampala Flyover
Construction and Road Upgrading Project, engaged Uniworks Transporters and Logistics (U)
Limited under two subcontracts: Contract No. SKJV/COT/S050, for the supply, transportation,
spreading, levelling and compaction of rockfill and CRS, and Contract No. SKJV/COT/S051, for the
excavation and disposal of excavated material at the underpass structure. On 30th June 2023,
Uniworks filed Civil Suit No. 0603 of 2023 in the Commercial Division, claiming UGX 506,783,200 as
outstanding contract sums, special damages of UGX 6,160,000,000, loss of future profits of UGX
121,627,968, general, punitive and exemplary damages, interest at 34% on the sums awarded,
security for costs, and the costs of the suit.

The Joint Venture challenged the Court’s jurisdiction in its written statement of defence and later
filed Miscellaneous Application No. 2785 of 2025 to have the suit dismissed pursuant to Clause 12
of both contracts and for the Court to refer the dispute to arbitration. Uniworks deponed in reply
that there was no valid arbitration clause providing for arbitration as a mode of dispute resolution.
The Impugned Clause 12 as Drafted

Under the Brief Sub-Contract Conditions of each contract, the arbitration clause was couched as
set out below. The conditions were in a pro forma in which the parties select terms by ticking boxes.
The clause reads identically in both contracts:
12 Governing Law:
☑ Ugandan Law
Arbitration and Conciliation Act 2000 (Ch 4)
☐ Japanese Law ☐ Others
Ordinarily, a conventional arbitration clause would contain words of submission, typically that all
disputes arising out of or in connection with the contract shall be referred to and finally resolved
by arbitration, and would usually name the seat, the rules, the appointing authority and the
number of arbitrators.
Clause 12 contained none of these. It is headed “Governing Law”, which is the language of a
choice of law provision. It makes no reference to disputes and contains no verb of submission.
Its only mention of arbitration is the title of a statute, printed beneath “Ugandan Law” within the
single ticked option, alongside unticked alternatives for Japanese law and other law. On its face,
the clause presents the Arbitration and Conciliation Act as part of the law chosen to govern the
contract rather than as a separate election of a forum. The question then was whether, by ticking
a box relating to Ugandan law and the Arbitration and Conciliation Act, the parties had agreed
to have their disputes referred to arbitration, and whether an arbitration clause made by ticking
was sufficient.

The Court’s Decision

In his ruling delivered on 17th June 2026, Ocaya J acknowledged that the clause was not drawn
in the ordinary way, but held that it satisfied the requirements for a valid arbitration clause,
because both contracts made it clear that the parties chose arbitration, that being the purpose
of the check mark. The contracts were in writing and signed by the parties, and so met sections 2
and 3 of the Act. As Clause 12 contained no words confining or excluding any category of dispute,
every dispute arising from the contracts fell within it.

The Court further held that the claim was arbitrable, rejected the contention that the Joint Venture
had waived arbitration by filing a defence, stayed Civil Suit No. 0603 of 2023, referred the dispute
to arbitration, held that the suit was thereby determined, and awarded the Joint Venture the costs
of the application and the suit: Shimizu-Konoike Joint Venture v Uniworks Transporters and Logistics
(U) Limited, HCMA No. 2785 of 2025 (arising from HCCS No. 0603 of 2023).

Clause 12 in Comparative Perspective

The closest comparable decision is Visa International Ltd v Continental Resources (USA) Ltd (2009)
2 SCC 55, AIR 2009 SC 1366, in which the Supreme Court of India upheld a clause providing that
disputes not settled amicably would be settled in accordance with the Arbitration and
Conciliation Act, 1996, although the clause set out no procedure for constituting the tribunal. The
Court held that an arbitration agreement need not be in any particular form; the question is
whether the parties agreed to refer their disputes to arbitration. Clause 12 goes further than the
Visa clause. That clause at least spoke of disputes and of their settlement; Clause 12 does neither,
and the intention to arbitrate is drawn entirely from the ticking of an option that names an
arbitration statute.

In Kruppa v Benedetti & des Pallières [2014] EWHC 1887 (Comm), a clause headed “Governing
law and jurisdiction” provided that the parties would “endeavour to first resolve the matter through
Swiss arbitration”, failing which the English courts would have non-exclusive jurisdiction. Cooke J
held that this was not an arbitration agreement, because the parties had agreed only to attempt
arbitration, not to submit to it with binding effect.
In contrast with the Visa case, the clause in Kruppa used the word “arbitration” expressly, but
qualified it with “endeavour” and coupled it with the jurisdiction of the English courts. Clause 12 is
sparse, but nothing in it points away from arbitration: there is no permissive “may”, no conditional
“endeavour” and no competing submission to the courts. The contrast shows that the validity of
an arbitration agreement turns on whether the choice of arbitration is unconditional, not on how
fully that choice is expressed. What the clause omits as to the tribunal and procedure, the Act itself
already provides for.

Conclusion

The decision confirms that the courts will look to substance rather than form, and will give effect to
a genuine choice of arbitration, however economically it is recorded. It is equally a lesson for those
who contract on pro forma conditions that merely ticking an applicable law option that points to
arbitration is sufficient to have all disputes thereunder referred to arbitration.