Court stops termination of joint venture project for World Bank roads 

Court has stopped Ditaco International from terminating a joint venture with Multiplex that had put construction of government roads in parts of western Uganda in jeopardy.

High Court Judge Musa Ssekaana issued the interim order restraining Ditaco from issuing a termination notice that could have jeopardised road  projects in Mbarara City,  Ntungamo Municipality and Kabale Municipality. 

The projects are jointly run together with the Ministry of Lands, Housing and Urban Development, local government authorities and a World Bank programme known as Uganda Support to Municipal Infrastructure Development.  

“This is a government project, which is for the benefit of the entire public and once the project is stopped the entire country stands to lose. Such a loss will be irreparable and cannot be atoned for by way of damages,” Justice Ssekaana ruled, noting that Multiplex had proved that any intended breach of agreement will irreversibly injure its reputation built for more than 36 years.

Court heard that the termination of the joint venture agreement would be detrimental to public interest regarding the benefits that would have arisen from the road construction development and loss of employment opportunities for more than 300 Ugandans.

Records before court indicate that Multiplex and Ditaco signed a joint venture on October 30, 2020 in regard to the execution and or performance of road construction in Ntungamo Municipal Council, Kabale Municipal Council and Mbarara City.

However, during the performance of the projects, differences arose between the two firms in regard to interpretation of the final joint venture internal agreement, forcing Ditaco to file an applicantion before the Centre of Arbitration and Dispute Resolution, which awaits proceedings.

Ditaco also wrote numerous communications to the contract users, which Multiplex said was in contravention of the joint venture internal agreement and threatened continuance of the contracts, which would be to the detriment of Multiplex and government. 

In his ruling Justice Ssekaana held that it is these acts or threatened acts of breach or violations that Multiplex sought to have its counterpart restrained from doing in order to preserve the status quo as the arbitral proceedings are concluded or not to be rendered nugatory because the acts will equally impact third parties who have taken benefit of the joint venture agreement through sub-contracts.

Cannot be atoned for

Justice Ssekaana ruled that the damages which Multiplex may suffer such as  being blacklisted by World Bank or government cannot be atoned for in any way, noting that court, as the guardian of the rule of law was duty bound to grant Multiplex the relief of interim measure of protection or temporary injunction. 

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