ALCON INTERNATIONAL LIMITED v STANDARD CHARTERED BANK OF UGANDA & 2 OTHERS

The Applicant, a construction company incorporated and registered in the Republic of Kenya, entered into an agreement National Social Security Fund (NSSF) of Uganda for completion of a partially constructed structure in Kampala on 21st July, 1994. NSSF terminated the contract on 15th May, 1998 due to various defaults allegedly committed by the Applicant.

Upon filing a claim in the High Court of Uganda against NSSF for wrongful termination of the contract, an award was granted to the Applicant. NSSF challenged the same before the High Court and upon dismissal, appealed to the Court of Appeal of Uganda. The 1st Respondent issued a Bank Guarantee payable to Alcon International Limited as the judgment-creditor upon determination of the appeal. On 25th August, 2009, the Appeal above was determined in favour of the Applicant who then demanded that the 1st Respondent should honour the Bank Guarantee and pay the decretal sum but the 1st Respondent later declined to do so.

In the meantime, an appeal had been lodged in Supreme Court of Uganda and its judgment was delivered on 8th February, 2013. The Supreme Court set aside the arbitral award and the judgments of the High Court and Court of Appeal returned the case back to the High Court for fresh trial.

Prior to the Supreme Court’s decision, the Claimant had filed the present Reference on 20th August, 2010 seeking an interpretation and application of Articles 27(2) and 151 of the Treaty and Articles 29(2) and 54(2)(b) of the Protocol on the Establishment of the East African Community Common Market with regard to the enforcement of, and enhancement of trade and resolution and settlement of disputes for the protection of cross-border investments. The 1st and 2nd respondent claimed that they had been improperly brought before the court.

At the scheduling conference held on 25th February 2011, the First Respondent raised preliminary points of law and prayed that the Court disposes of them before proceeding to hear the main Reference.