Case Number APPEAL NO. 6 OF 2014

In 2013, the Government of Uganda (GoU) requested for bids for the construction of the 600 MW Karuma Hydroelectric Plant. The Appellant, a Procurement Consultant, aligned himself with China International Water and Electric Construction Corporation which placed a bid. However, before the tender was awarded, the Inspector General of Government of Uganda (IGG) received a complaint regarding the transparency and integrity of the procurement process. After investigations, IGG issued a report on 22nd March, 2013 recommending that the whole procurement process be cancelled and repeated.

Subsequently, Mr. Andrew B. Aja, filed a judicial review case at the High Court of Uganda, Nakawa, seeking inter alia an injunction against the Attorney General in the implementation of the recommendations of the IGG Report and an order to the Permanent Secretary, Ministry of Energy and Mineral Development (ME&MD) to declare the best evaluated bidder of the initial procurement process. On 18th April, 2013, the Appellant /Applicant obtained an interlocutory order ex parte for the preservation of the status quo pending the inter partes hearing. Thereafter, on 22nd April, 2013, the parties recorded a consent order: maintaining the status quo; prohibiting the implementation of the IGG’s recommendation; and directing the Permanent Secretary ME&MD to write to the complainant and other bidders requesting them to extend the validity dates of their bids and securities by 23rd April, 2013 which was the expiry date. Nevertheless, on 23rd April, 2013, the Contracts Committee of the ME & MD Ministry rejected all the bids and cancelled the procurement process pursuant to Section 75 of the Uganda Public Procurement and Disposal of Assets Act of 2003 (PPDA Act).

On 20th May, 2013, the High Court issued Final Orders restraining the Respondent from implementing the recommendations in the IGG Report and directed that the Permanent Secretary ME & MD declare the best evaluated bidder for the construction of the dam. Thereafter, the Respondent lodged an Appeal in the Court of Appeal of Uganda however, on 20th June 2013, the GoU signed a Memorandum of Understanding (MoU) with Sinohydro Corporation Ltd for the construction of the dam. No contempt of Court proceedings were brought against the Respondent.

Aggrieved by the cancellation of the bids and selection of Sinohydro, the Appellant / Applicant filed a Reference in the Trial Court alleging inter alia that: the signing of the MoU infringed the EAC Treaty was not transparent, objective, fair or competitive; and that the MoU was signed in contempt of Court, violated court orders and should be cancelled.

In response, the Respondent submitted that the signing of the MoU was in line with a bilateral arrangement between the GoU and the Government of China to secure funding through Exim Bank of China for the construction of the Karuma dam by Sinohydro, a company wholly owned by the China Government. However, the Respondent did not produce the bilateral agreement as evidence.

The Trial Court held inter alia that: the signing of a MoU and selection of Sinohydro did not breach Uganda’s laws; that the Court had no jurisdiction to determine whether the actions complained of disobeyed Court Orders

since the Courts’ of Uganda had not found the Respondent in contempt of their orders; and that by implementing the MoU after the filing of the Reference, Article 38 (2) of the Treaty was not infringed. Dissatisfied with the decision, the Appellant averred on appeal inter alia that the Trial Court erred in finding that the signing of the MoU and the selection of Sinohydro was not inconsistent with the Treaty. In its cross- appeal, the Respondent contended that by failing to award costs to the Respondent, as the successful party, on the ground that the Reference was brought for personal reasons and not in the public interest, the Trial Court erred in law.

Date filed
KeywordBurden of proof , Declaratory orders , Disobedience of Court orders , Remedies , Rule of Law
Treaty Article1995 , Article 123 , Article 33 , Article 35 A , Article 38 , Article 39 , Article 6 , Article 7 , Article 8 , Articles of EAC Treaty , Draft Articles on State Responsibility 2001 ILC , Public Procurement and Disposal of Assets Act 2003 Uganda , Public Procurement and Disposal of Public Assets Regulations 2003 Uganda , Section 4 , The Constitution of the Republic of Uganda 1995 , Vienna Convention on the Law of Treaties (Article 31)

First Instance Judgment

VerdictConclusion The Reference before us brings to the fore the emerging reality within the Community that Partner States, while conducting bilateral matters, must do so openly, transparently and within their Constitutions and Statutes. To go outside those parameters may well mean that the principles of good governance and rule of law would be violated and this Court’s intervention would be necessary. Having come to the end of the matter, we thank Counsel for their courtesy and depth of research but it is clear by now that we are unable to accede to the Applicant’s prayers and the final orders to be made are that: i) The Reference is dismissed; ii) Each Party shall bear its own costs. It is so ordered.
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Date deliveredNovember 28, 2014

Appeal Judgment

  1. Observance of the rule of law is the premier value of the East African Community. Disregard of it will torpedo the ship of regional integration. Rule of law dictates that when an act has been prohibited by a court order, unless and until such an order has been set aside or vacated by the same Court or another court of competent jurisdiction, such act is prohibited, and no reason or ground advanced for doing it can suffice to legitimize such action. Lawful justification for disobedience of Court orders, is not a creature known to the law. It is a pure and simple contradiction in terms.
  2. The Trial Court erred in law in finding that it lacked jurisdiction to delve into the alleged contempt and disobedience of the orders of the National Courts in Uganda and to determine whether disobedience of their orders was a contravention of the principle of the rule of law under the Treaty. This was an abdication of the Court’s mandate to interpret Articles 6(d), 7(2) and 8 (1) (c) of the Treaty.
  3. The Trial Court’s conclusion that it could not make a finding on whether the actions of the Respondent were in contempt of Court and were made in disobedience or disregard of Court Orders, without a finding to that effect by the Courts of Uganda, was an abdication of that Court’s duty to interpret the Treaty. The invocation of Section 75 of the PPDA could not, and did not remove the stigma of contempt of or disobedience of Court orders from the decision. Thus the selection and signing of the Memorandum of Understanding between the Government of Uganda and Sinohydro was in disobedience of pertinent Court orders and, as such, a violation of the Treaty Principle of the Rule of Law.
  4. The Respondent’s failure to produce the written bilateral agreement or arrangement leads to the conclusion that the selection and subsequent signing of the MoU between the GoU and Sinohydro was arbitrary, illegal and unlawful under Ugandan law and was outside the provisions of the PPDA Act and Regulations.
  5. The jurisdiction of this Court is not limited to granting of declaratory relief only. On the authority of Article 23, this Court has the Jurisdiction and duty to make such other relief as may be congruent with adherence to law in the interpretation and application of the Treaty. Remedies are only to be granted to the extent possible. In the instant case, the record revealed too many actions, which ought not to have been done, were been done, and it was impractical to reverse the construction of the Karuma Dam by Sinohydro.
  6. A Declaration be issued that the selection and subsequent signing of the Memorandum of Understanding between the Government of Uganda and Sinohydro was inconsistent with and an infringement of Articles 6(d), 7(2) and 8(1) (c) of the Treaty
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Date deliveredFebruary 19, 2016