Business

Court halts cancellation of Chinese firm contract

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By EPHRAIM KASOZI

Posted  Wednesday, July 30   2014 at  01:00

In Summary

Attorney General also ordered to pay legal costs.

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Kampala.

Court has halted the cancellation of a contract between government and a Chinese firm regarding a Memorandum of Understanding (MoU) for the construction of the Eastern Route standard gauge railway (SGR).
In April, the Minister of State for Works, Eng John Byabagambi, cancelled the contract between the government and China Civil Engineering Construction Corporation (CCECC), a decision that is being challenged before the High Court.
During a session last week, court heard that the minister, in disregard of the advice from the Attorney General (AG), made the decision against the Chinese company despite the work already done including a feasibility study submitted to government for construction of the standard gauge railway.
Justice Lydia Mugambe held that the action by the minister was in disregard of and against the AG’s legal advice yet the company had already done extensive preparatory work on the Eastern Route in consultation with the Ministry of Works and in execution of an MoU.
“…I find that the Minister’s unilateral decision to be irrational, high-handed, arbitrary, unreasonable, clothed in procedural impropriety with no legal basis and not in public interest,” held the judge before quashing the minister’s notice and decision to terminate the MoU between CCECC and government.
“Instead the government should in good faith get into negotiations with the applicant to discuss modalities of signing a contract enabling the applicant (CCECC) to work on the Eastern Route, that is Kampala to Malaba, Tororo to Packwach and then Gulu and not Gulu to Nimule of the SGR project in Uganda,” Justice Mugambe ordered.

AG to pay legal costs
Court also ordered the Attorney General to pay legal costs incurred by the Chinese company. According to the order, the minister of Works and or any agent of the government of Uganda were prohibited from entering into a contract regarding the Eastern Route of the SGR project if the complaining firm is still interested in the same route.

ekasozi@ug.nationmedia.com