Workers House Case: Court Rules Against Alcon

Court has ruled against Alcon fo terminating its contract

The Supreme Court has overturned a decision by the High Court and the Court of Appeal awarding 40 billion shillings to Alcon Uganda for terminating its contract to build Workers House.

Alcon had sued National Social Security Fund (NSSF) accusing it of arbitrarily terminating its contract to build the 20-storey building located on Pilkington Road in the centre of Kampala.

In 1996, NSSF and Alcon International signed a contract but after a few years the pension fund terminated the contract, and allegedly confiscated Alcon’s construction tools, forcing the company to sue for damages.

During the High Court hearing, the matter was referred to an arbitrator who awarded Alcon International 40 billion shillings through arbitration which was upheld by the Court of Appeal.

But the five judges of the Supreme Court led by Chief Justice Benjamin Odoki ruled on Friday that Alcon Uganda obtained the said award fraudulently because it was not party to the signing of the contract, and neither did it have the expertise to carry out the construction work. The other judges on the bench are George Tsekooko, Bart Katureebe, Christine Kitumba and Esther Kisaakye.

The Supreme Court Judges, in a ruling delivered by the Court’s Deputy Registrar Godfrey Opifeni Angwandia, faulted the lower courts for basing their decisions on fraudulent information. This information, the judges ruled, was deliberately hidden from NSSF by the directors of Alcon International Limited during the signing of the contract.

Court established that Alcon Kenya that signed the contract with NSSF is not the one that performed the job, but instead passed it on to Alcon Uganda which did not have the construction expertise.

The judges ordered that the matter be referred back to the High Court because none of the parties agreed to an arbitration or settlement out of court. The Supreme Court further ruled that the Court of Appeal wrongly upheld the lower court decision to arbitrate the matter yet the parties did not consent.

During the hearing of this appeal last year, it emerged that Alcon International Ltd incorporated in Uganda, is not the company with whom NSSF signed the contract for the construction of Workers’ House.

It further emerged that NSSF signed the contract with Alcon International, incorporated in Kenya and not the Ugandan firm.