National Social Security Fund & Anor v Alcon International Ltd

Case No: 
CIVIL APPEAL NO 15 OF 2009
Media Neutral Citation: 
[2013] UGSC 4
Judgment Date: 
8 February 2013
AttachmentSize
NSSF V ALCON.docx82 KB

THE REPUBLIC OF UGANDA

 

IN THE SUPREME COURT OF UGANDA AT KAMPALA

(CORAM: ODOKI, C.J, TSEKOOKO, KATUREEBE, KITUMBA AND KISAAKYE, JJ. S.C)

CIVIL APPEAL NO 15 OF 2009

BETWEEN

  1. NATIONAL SOCIAL SECURITY FUND}
    1. W. H SSENTOOGO T/A SSENTOGGO} ::::::::::::: APPELLANTS & PARTNERS                                                          }

AND

ALCON INTERNATIONAL LIMITED ::::::::::::::::::::: RESPONDENT

[Appeal from the decision of the Court of Appeal of Uganda (Mpagi-Bahigeine, Twinomujuni and Kavuma JJ.A) dated 25 August 2009, in Civil Appeal No 2 of 2008]

JUDGMENT OF ODOKI, CJ

This is an appeal against the decision of the Court of Appeal dismissing an appeal brought by the appellants against the respondent.

Background to the Appeal:

The brief facts of the case are that on 21st July 1994, the respondent, Alcon International Ltd entered into a contract with the 1st Respondent, the National Social Security Fund (NSSF) to erect and

 


 

complete a partially constructed structure on Plot No.1 Pilkington Road, Kampala. Construction work started and the second appellant, W,H. Ssentoogo, trading as Ssentoogo and Partners, was contracted as the project architect. The contract was varied from time to time leading to a supplementary contract on 8 June 1996. Due to extensive variations and changes, the 1st appellant on 21 November 1997 granted an extension of the time to the respondent to complete the project by 31st May 1998.

On various dates on 11th December 1997 and 30th April 1998, the 1st Appellant wrote to the respondent giving notice of termination of contract under Clause 25(i) of the contract, citing defaults allegedly committed by the respondent which the latter denied. Following incessant disputes between the parties, the 1st appellant terminated the contract on 15th May 1998.

On 30th November 1998, the respondent filed HCCS No. 1255 of 1998 against the appellants jointly for wrongful termination of the contract. In Paragraph 11 of its amended plaint, the respondent accused the 1st appellant of failure to utilize the remedy of arbitration pursuant to Clause 36 of the contract. The respondent stated that as a result of the 1st appellant’s failure to accept the request for arbitration within the stipulated time, the respondent wrote to the East African Institute of Architects at Nairobi, Kenya, to intervene. It later transpired that the said institute was dormant and no action was ever taken.

The respondent pleaded collusion and fraud, and sought various orders including declaration that the termination of the contract and

 


 

breach of the co-financing agreement were wrongful, null and void, as well as special and general damages.

 

Subsequently, the respondent applied by way of chamber summons, for temporary injunction restraining the appellants from committing any further breach of the contract and injury under the contract, by awarding or executing the contract to another contractor. It was sought to maintain the status quo at the site so as to allow the respondent or its other authorized agents to make an inventory, to value and measure the work done and to value all the various properties belonging to the respondent.

 

On 14th June 1999, the learned trial judge refused to grant the temporary injunction but instead ordered that the matters in conflict between the parties be referred to arbitration. The learned trial judge made the following orders:

“7. That a temporary injunction should not be issued against the respondents/defendants to restrain them from interfering with the applicants/plaintiffs property and from committing further breach of contract.

  1. That the main suit be stayed and the matter be referred to arbitration
  2. That the parties agree on an Independent Arbitrator within 14 days from the date hereof i.e 14/06/99
  3. That if the parties fail to agree to an independent arbitrator, the applicant shall refer the matter to the Chairman of the East African Institute of Architects to appoint an Arbitrator in accordance with Clause 36 of the contract. ”
 


 

The appellants protested the order and filed a notice of appeal, but the appeal was never prosecuted.

The appellants refused to concur to the appointment of an Arbitrator. The respondent referred the matter to the President of the East African Institute of Architects (EAIA). The President of East African institute of Architects appointed an Arbitrator. The respondent filed its claim, the appellants filed a defence and the respondent made a reply thereto and arbitration proceedings commenced.

On 20th September 2001, the appellants filed Miscellaneous Application No 417/2001 seeking the removal of the arbitrator on grounds of bias. The appellants later on 15 November 2001 filed another application, Arbitration Cause No 4 of 2001, to set aside the Arbitral Award on grounds that there were errors of law on the face of the record, that the Arbitrator misconducted himself and that therefore the arbitration was improperly procured. Both applications were consolidated and dismissed on 30th September 2003.

Dissatisfied with the dismissal, the applicants appealed to the Court of Appeal on several grounds which included complaints that the learned judge erred in law and fact in not holding that she had erred in law in staying the suit and in referring the matter to arbitration, that the learned judge erred in law and in fact in not holding that the arbitration was improperly procured, and in holding that there were errors on the face of the record, among others. The Court of Appeal dismissed the appeal. Hence this appeal.

 


 

The appellants appealed to this Court on fifteen grounds but during the hearing of the appeal only the first three and the fifth grounds were argued and the rest were abandoned.

The four grounds which were argued were framed as follows:

 

“1. The learned Justices of Appeal erred in law in upholding an arbitration award for breach of contract to the respondent in the absence of a cause of action against the Appellants.

  1. The learned Justices of Appeal erred in law in upholding an arbitration award that was obtained illegally and contrary to public policy.
  2. The learned Justices of Appeal erred in law in holding that the learned Judge did not err in law in staying the suit and referring the matter to arbitration.