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The Commercial Division of the High Court has ruled that the dispute between Smile Communications and American Tower Corporation (ATC) is arbitrable and must be decided as such.
In a ruling last Friday, Justice Thomas O R Ocaya, ruled that the dispute be referred to arbitration, adding that Smile and ATC should appoint an arbitrator within 30 days of the ruling, failure of which either of the party will refer to an appointing authority under the Arbitration and Conciliation Act to appoint an arbitrator.
“Owing to [the] above, civil suit No 842 of 2023 … is accordingly struck out with each party bearing their own costs,” he ruled.
The case resulted from a dispute, in which, Smile sued ATC in 2022 over illegal disconnection of its network, causing it distress and loss of business.
Smile had also asked court to declare that switching off its network on January 31, 2022 and retention of its equipment by ATC was illegal and breach of contractual and license obligations, thus praying that court grants it remedies of $2.12m (Shs7.86b) for lost revenue from January 31 to October 2022, general damages for financial loss, economic distress, damage to goodwill and reputation, diminished value of its equipment and inconvenience.
Smile also sought a directive for ATC to return its equipment, or in the alternative, compensate it for the value of the equipment, pay interest on pecuniary sums at a rate of 24 percent per annum, costs and any other reliefs that court would deem fit.
However, ATC objected to the matter in an application, in which it noted that the High Court had no jurisdiction to hear the case, given that there was a binding arbitral clause in the agreements between ATC and Smile.
ATC further noted that similar issues, which had been raised in court, had been conclusively handled by the Centre for Arbitration and Dispute Resolution (CADER), even as Smile indicated that the arbitral clause was incapable of being performed because the appointing authority at CADER was not constituted.
Thus, ATC argued that Civil Suit No 0842 of 2022 was an abuse of court process and a form of “forum shopping”.
Justice Ocaya, however, ruled that whereas CADER arbitration could have been frustrated by one party refusing to consent to appointment of an arbitrator, he was inclined to offer the parties a chance to agree on an arbitrator before recourse could be had.
“Arbitration cannot proceed side-by-side with litigation … accordingly, I would stay and dismiss this suit with no … costs … to enable the parties undertake arbitration,” he ruled.
In June, UCC had told Monitor that they had earlier received a complaint from Smile against ATC for disconnection of its network, which was subsequently handled but Smile was not satisfied with the ruling of UCC, thus opting to go back to court.
“Smile had an objection to part of the bill presented by ATC. Smile decided to take the matter to court and the matter subsequently went into arbitration,” Ms Irene Kaggwa, the UCC acting executive director, said in June.
In documents before court, ATC indicated that UCC had directed Smile to pay an “undisputed amount of $1.2m (Shs4.5b),” due in debt for services provided, after which ATC would release Smile’s equipment with an undertaking to pay any sums declared as due by court”.
In June, Smile through Mr Silvernus Okoth, the company’s acting country manager, published a series of newspaper notices in which it accused ATC of illegally disconnecting its network, noting that it had terminated all contracts with ATC, before filing a request to return its equipment.
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