Prime
NSSF wins Shs40b case against Alcon
What you need to know:
- In 1996, NSSF and Alcon International signed a contract but after a few years, the Fund terminated the contract, and allegedly confiscated Alcon’s construction tools, forcing the company to sue for damages.
KAMPALA. Questions surrounding the claim by Alcon International Limited regarding the safety and ownership of Workers House have been resolved after court dismissed its case against National Social Security Fund (NSSF).
Alcon International Limited had sought for compensation for alleged breach and termination of the construction contract for Workers House in Kampala.
Justice David Wangutusi of the Commercial Division of the High Court ruled that there is no cause of action in place where the pleadings speak of Alcon International Kenya instead of Alcon International.
In February 2013, the Supreme Court overturned a decision by the High Court and the Court of Appeal awarding Shs40 billion to Alcon Uganda for terminating its contract to build Workers House.
The country’s highest appellate court found that Alcon International Limited was not a Kenyan Company but a Ugandan one yet it was the Kenyan company which signed the contract to build workers’ house.
Then Chief Justice Benjamin Odoki sent the case back to High Court for retrial.
Alcon had sued NSSF accusing its managers of arbitrarily terminating its contract to build the 20-storey building located on Pilkington Road in the city centre.
Background
In 1996, NSSF and Alcon International signed a contract but after a few years, the Fund terminated the contract, and allegedly confiscated Alcon’s construction tools, forcing the company to sue for damages.
Court documents indicate that the two companies; Alcon International Limited and Alcon International (Kenya) Limited were run by the Hanspal family. Court held that it was fraud on part of Alcon International (Kenya) to deliberately conceal information when they failed to inform NSSF about the passing of construction works in a secretive manner to Alcon International which had been rejected with their directors and managers.
Fraudulent transaction
“In my view, to allow a suit arising out of a fraudulent transaction would be frowned upon by the public policy. One cannot even argue that the fraud was just to enable the respondent obtain the building site and what happened later was lawful,” the judge reasoned.
NSSF managing director, Mr Richard Byarugaba said in the statement that the ruling signifies an end to this protracted litigation and justifies the Fund’s decision to challenge the adverse arbitration award.
“This ruling finally resolves any questions surrounding the claim by Alcon and guarantees the safety and ownership of the workers of Uganda’s prime asset, Workers House. Finally, the ruling vindicates the position we took in 2011 to exhaust all legal avenues to resolve the case rather than settle the matter out of court or through arbitration,” he said.
