September 5, 2013

How Alcon was floored

The First Instance Division of the East African Court of Justice on Monday, August 2 dismissed a Matter filed by Alcon International Limited (Kenya) against Standard Chartered Bank Uganda Limited for not paying them for the construction of a building known as Workers House in Kampala, Uganda.

Court has ruled against Alcon
Court has ruled against Alcon

Alcon International Limited (K) came to court claiming an award of $8,858,469, with interest and costs, which was made in favor of Alcon International (Uganda) by an arbitrator and adopted by the High Court of Uganda.

The award arose from a contract between the Government of Uganda and Alcon International Limited (K) who later sub-contracted Alcon International Limited (U) to finish the construction of the Workers House building, leading to a dispute about which Alcon Company should be paid for the work done.

Court said that, it cannot give itself jurisdiction in a case outside its jurisdiction on the ground that it would be for the convenience of the Parties and witnesses.

Also Court found that there was no merit in the reference before it hence dismissed it and ordered that each party to bear their costs.

EACJ First Instance Division had previously dismissed the case by Kenyan construction company, Alcon International (K) Limited, on grounds that the matter was improperly before the Court.

However the Appellate Division noted that the First Instance Division did not in its ruling consider whether it had jurisdiction to entertain the matter, which was a fundamental issue which the Court had to decide on.

The Applicant brought the case to court under article 29 (2) and Article 54 (2) (b) of the protocol on the establishment of the East African Community Common Market of the on protection of Investors across the border, emphasizing that the alleged sister construction company Alcon International Uganda does not exist.

Also the Registrar today ruled on a preliminary objection raised by Counsel for the Respondent in a case for costs in an Appeal filed by Alcon International Limited (K) against The Standard Chartered Bank and 2 others.

The Appeal was allowed and they were awarded costs to be taxed by the Registrar.

The Registrar ruled that the court was not functus officio (a general rule that, a final decision of a court cannot be reopened) and that he did not make a final decision in this matter when it came up for taxation. The Registrar ordered that the matter proceeds for taxation and that the parties will be notified of the date.

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