Court dismisses 26-year NSSF, Alcon compensation dispute
NSSF and Alcon have been involved in a multi-billion court battle that dates back to 1998. The case originates from a dispute in which Alcon accused NSSF of illegally retaining its equipment at the Workers House site. PHOTO / FILE
What you need to know:
- Alcon had asked court to force NSSF to compensate it for its equipment and machinery that the Fund has been holding since 1998
National Social Security Fund (NSSF) can finally breathe a sigh of relief. It has been 26 years of a court battle that threatened to cost the Fund billions of shillings.
However, the High Court last Thursday dismissed a case in which Alcon International, a contractor involved in the construction of Workers House, had sought compensation for its equipment and machinery.
In a case preceding a series of court disputes dating to as far as 1998, in 2020, Alcon sued NSSF, claiming it was unfairly barred from retrieving its equipment and machinery used to construct Workers House in 1998 after NSSF terminated its contract.
“[Alcon] brought this suit against [NSSF] seeking return of plant, machinery, equipment and building material wrongfully detained since May 1998 ... or in the alternative, recovery of the value … compensation for commercial loss, aggravated, special and general damages, interest and costs of the suit,” court documents read in part.However, NSSF denied the claims, urging court to dismiss the case because the matter had already been resolved in court rulings, which found that Alcon had no valid claim.
In 1998, Alcon sued NSSF for recover of equipment and machinery in the sum of $1.97m, a case that went into arbitration and was determined in favour of Alcon, which was also among others, awarded $2.78m for losses suffered as a result of the seizure.
However, the arbitral award was later set aside by the Supreme Court, with the matter remitted to the High Court for retrial, which was dismissed for non-disclosure of a cause of action.
Thus, NSSF argued that the alleged seizure had been substantially determined conclusively.
The Fund also argued that it had initially contracted a different company to construct the 19-floor building, but later discovered that Alcon International Limited had taken over the contract without its knowledge, which was tantamount to fraud.
Court documents indicate that NSSF had contracted Alcon International Limited Kenya, but Alcon International Limited Uganda, which had not won the bid, took on the construction without any contract with NSSF.
“It is indeed true that the plaintiff [Alcon] was fraudulent when it entered onto the defendant’s [NSSF] premises well aware that it .. had no contract … as stated by the defendant, an illegality once brought to the attention of court overrides all questions of pleadings including any admissions made thereon. The plaintiff cannot seek to recover from a transaction in which he was illegally performing,” Justice Musa Ssekaana, said.
He also noted that Alcon had in 1998 filed an Arbitration Cause for recovery of the value of equipment and machinery, noting that it could therefore, not bring the same “cause of action before this court under the guise of a continuing tort in detinue for which it is entitled to recovery of the value of the property”.
Therefore, he ruled, Alcon had not established a cause of action in detinue against NSSF, upholding all preliminary objection by NSSF.
“Having upheld all preliminary objections raised by [NSSF] in respect of [Alcon’s] suit ... this suit is dismissed with costs to the defendant,” he ruled.
Mr Gerald Paul Kasaato, the NSSF deputy managing director, said in an email in response to the judgment that dismissing Alcon’s demands marked the end of a protracted litigation that had lasted 26 years.
“We have always been confident that the Fund would prevail given that the whole case … was premised on fraudulent actions, which was confirmed by the Supreme Court in 2013, and High Court in 2019. Our decisions … have been vindicated. We have the certificate of title for Workers House, the key subject of the litigation, free of any encumbrances,” he said.
