Alcon wants Shs25b from NSSF
The managing director of NSSF Richard Byarugaba (R) with members of Workers’ Union celebrate at the Supreme Court in Kampala after court ruling in their favour in 2013. FILE PHOTO
What you need to know:
Case. Alcon accuses the Fund of terminating a building contract
Kampala. Alcon International Limited, a Kenya-based construction firm, is claiming an award of $8,858,469 ( about Shs25 billion) with interest and costs for the termination of a building contract in Uganda.
The contract was terminated by the National Social Security Fund (NSSF) of Uganda, leading to a dispute between the two and a suit filed before the East African Court of Justice (EACJ).
On September 2, 2013, the First Instance Division of the regional Court dismissed the case on grounds of lack of jurisdiction.
However, the firm filed an appeal before the Appellate Division of EACJ praying the court to overrule the decision of the lower court, arguing that the rights of the appellant were breached and that the First Instance Division failed to grant redress.
Aclon’s lawyer Fred Athuok told the court here last week that the termination of contract by the Uganda NSSF also breached the cross-border investment regime under the East African Community (EAC) Common Market Protocol.
“The appellant’s cross-border investment was not protected by the respondents as guaranteed under Article 29 of the the EAC Common Market Protocol,” the counsel said, adding that the first respondent, Standard Chartered Bank, failed to promptly pay the award.
Mr Athuok said the court is vested with jurisdiction under Article 54 (2) of the EAC Common Market Protocol to enforce a right under the Protocol. He, therefore, stated that the First Instance Division failed to exercise its jurisdiction to apply the EAC Treaty and that it is a failure of justice and law.
He prayed for the court to allow the appeal.
The matter was first determined in an arbitration proceeding as provided under the contract of which Alcon claimed to have succeeded hence awarded the amount claimed.
Mr Barnabas Tumusingize, counsel for the first respondent (Standard Chartered Bank), submitted that the bank did not enforce the guarantee because a judgment of the Court of Appeal on the Arbitrator was overturned by the Supreme Court of Uganda.
Background to the case
In 1996, NSSF and Alcon International signed a contract but after a few years, the Fund terminated the contract, and allegedly confiscated Alcon’s construction tools, forcing the company to sue for damages.
An arbitrator then awarded Alcon International Shs40 billion through arbitration which was upheld by the Court of Appeal.
In February 2013, the Supreme Court overturned a decision by the High Court and the Court of Appeal awarding Shs40 billion to Alcon Uganda for terminating its contract to build Workers House in Kampala.
