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Company sues Uganda government at EA court

By | August 31st 2010 at 00:00:00 GMT +0300

By Evelyn Kwamboka

A local company behind the construction of a skyscraper in Uganda is seeking Sh1.7 billion compensation from the Ugandan government.

Workers' House in Kampala

Alcon International Kenya moved to the East African Court of Justice (EACJ) in Arusha, Tanzania after the Ugandan government allegedly failed to compensate it for illegally cancelling a contract.

The contract was for the construction of the Workers’ House in Kampala on behalf of Ugandan’s National Social Security Fund (NSSF) in 1998.

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Bank guarantee

Alcon wants the court to direct the Ugandan government, Standard Chartered Bank Uganda and the Registrar of the High Court of Uganda, who are the respondents, to pay her the money with interest under a bank guarantee dated October 29, 2003.

The company was awarded the contract on July 21, 1994 to carry out the construction but this was terminated. An arbitrary award was delivered in the company’s favour against NSSF Uganda on March 29, 2005. NSSF Uganda moved to its High Court but was defeated by the Kenyan company. NSSF then sought to appeal against the High Court decision.

As a requirement, NSSF was to provide a bank guarantee and it selected Standard Chartered Bank. The Court of Appeal ruled in favour of the company on August 26, last year, but the bank allegedly failed to honour the guarantee. This forced the company to file the suit at the EACJ.

Alcon International Kenya East African Court of Justice Arusha Tanzania Ugandan government
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