NSSF Triumphs In Alcon Case

about it geneva; font-size: small;”>The Supreme Court on Friday set aside a Shs40bn arbitral award ordered in 2009 by the Court of Appeal to Alcon as compensation for the termination of the contract.

this site geneva; font-size: small;”>Instead, unhealthy a panel of judges led by Chief Justice Benjamin Odoki faulted Alcon Uganda directors of using fraudulent information that was “deliberately concealed” by directors of Alcon International Kenya during the signing of the contract.

In his lead judgment, Odoki made it clear that Alcon Kenya misled NSSF when it substituted one company with another during the signing of the contract.

He said the contract was fraudulently procured.

Court referred back the case to the High Court for a speedy hearing.

The judges concurred the Court of Appeal erred in staying proceedings in the High Court and referring the matter to arbitration, adding, the arbitration was improperly procured and the award was contrary to public policy.

Court further noted that pleadings in the High Court and the arbitration did not disclose a cause of action against NSSF.

In April 1998, then Inspector General of Government, Jotham Tumwesigye wrote a dossier, saying the board of NSSF awarded the contract to M/S Alcon in 1994 against the recommendations of the consultants and the negative reports that had been received from the Uganda High Commissions in Kenya and the UK.


The board proceeded to negotiate with the contractor without according a similar treatment to M/S Concorp which had been recommended by the consultants and auditors and without stating reasons for ignoring their advice.

Concorp, according to Tumwesigye, had a lower bid thus qualifying as suitable candidate for the contract.

“The award of this tender was, therefore, not handled in an objective, fair, and transparent manner…The seeds of trouble for the project were, therefore, planted at this stage when the contract was awarded to Alcon without basing it on proper criteria,” said Tumwesigye.

He further blasted Alcon for not honouring its terms of the contract before accusing it of altering a draft Letter of Credit from NSSF.

“From the time the contract agreement was signed, it was apparent that the project would not be satisfactorily executed. It took over one month for the contractor to mobilize at site and he immediately failed on the co-financing agreement. It is also clear that the contractor failed in his very first year of operations.”

The cancellation of the contract sparked a huge legal battle, with Alcon winning on several fronts.

In fact in 2009, the Court of Appeal had dismissed all grounds by NSSF and upheld Shs40bn award to Alcon.

Legal experts say the ruling is a big step forward in a battle aimed at saving over Shs60bn of taxpayers’ money that would have gone to Alcon.

NSSF boss Richard Byarugaba was not readily available for comment.

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