By Standard Reporter
A Kenyan construction company and a bank in Uganda are locked in a legal tussle at the East African Court of Justice (EACJ).
EACJ First Instance Division has started hearing the case between Alcon International (Kenya) and Standard Chartered Bank (SCB), Uganda Limited. Alcon has sued SCB for allegedly holding onto payments arising from construction of a building known as Workers House in Kampala. A witness for Alcon managing director Davinder Hanspal told the court the bank stopped payments and their contract with Uganda government was terminated without reason.
“This matter is brought to this court under article 29 (2) and Article 54 (2) (b) of the protocol on establishment of East African Community Common Market on protection of investors across the border,” said Hanspal.
He said the alleged sister construction company, Alcon International Uganda does not exist. Standard Chartered Bank witness Chris Otyek and Country Legal Counsel submitted that the bank held payment for Alcon following an order of High Court of Uganda to hold payment to an account belonging to Alcon International Ltd (K) until a case pending before the Court of Appeal of Uganda was determined.
The subject matter is an award of $8,86 (Sh761 million) with interest and costs, made in favour of Alcon International by an arbitrator and adopted by High Court of Uganda.
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The award arose from a contract between National Social Security Fund Uganda and Alcon International Limited (Kenya), who later sub-contracted Alcon International Limited (Uganda) to finish construction of the building, leading to a dispute on which Alcon company, should be paid.
EACJ First Instance Division had previously dismissed the case by Alcon (Kenya) on grounds that the matter was improperly before the court. However, the Appellate Division noted that the First Instance Division did not in its ruling consider whether it had jurisdiction to entertain the matter, which was a fundamental issue which the Court had to decide on.
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