MEDIA STATEMENT

February 08, 2013

NSSF Wins Supreme Court Appeal Against Alcon International

Supreme Court Judges rule that Alcon International (Uganda) was never party to the Workers House Contract and therefore cannot make any claims on contract.

Court also finds there was no breach of contract since there was no contract between NSSF and Alcon Uganda.

Award of $8.8 million with 6% interest dismissed Main Case referred to High Court for expeditious disposal. Appeal ruling solidifies NSSF’s defence against Alcon in a case spanning

over 14 years and threatening to cost workers close to UGX60 billion.

The Supreme Court has today, allowed our appeal in the 14 year old court case against Alcon International Ltd in which we contested an arbitration award of $8.8m with 6% interest to Alcon International.

Supreme Court has sustained our grounds that: Alcon Uganda which sued and obtained the award had no right to

the award because they were never party to this contract in this case and are therefore not entitled to any claims whatsoever.

That Alcon Kenya fraudulently won the contract through a series of name swapping and then went to assign the same to Alcon Uganda without the express written permission of NSSF. The Supreme Court judges held that the arbitral award was given on the basis of fraudulent information and therefore was contrary to the laws of Uganda. Accordingly, the award of $8.8m with 6 % interest is disallowed.

That the Commercial court rushed the case for arbitration amidst protests by NSSF, before NSSF could submit its case. This ground has since been strengthened by the fact that it was later discovered that actually Alcon Uganda procured the contract fraudulently and was never party to this suit.

The case has now been referred to the high court for an expeditious hearing. Since the above 3 grounds form the crux of our case, we are now confident that our case is much more solid since the highest court in the land has ruled that:

Alcon Uganda has no basis for suing NSSF and is therefore not entitled to the arbitral award of $8.8m with interest.

That even though they are the ones who constructed Workers House, they never had any contract with NSSF and if they are to make any claims, these claims should be levelled at Alcon Kenya which assigned them the contract without our knowledge.

Any contract or deal procured fraudulently is a nullity in law.

NSSF Appeal

On behalf of the NSSF Members, I wish to applaud the judiciary for bringing this first chapter of this case to a successful end. In the same breath, it is the prayer of the members of NSSF, that the Commercial Court now exercises expediency on this case so that it could be brought to a speedy closure. Our members have waited for too long to witness justice.

Impact of judgment on the Fund This judgment brings us close to winning this 14-year old case which will save the Fund an estimated UGX60 billion in damages, interest and costs. Winning this case means that;

We will save the UGX60 billion that had been set aside to pay for costs of this case.

UGX60 billion, translates into 2% interest to each saver. The case filed by Alcon in the East African Court of Justice seeking

to cash a bank guarantee that we had issued in favour of Alcon now collapses

Liberalisation: as we position ourselves for liberlisation of the pension sector, this victory is yet another milestone that enhances the confidence of our members in the Fund, in addition to other significant litigation that we have already won.

This milestone also reaffirms the renewed promise we recently made to our members upon rebranding – that we will zealously fight to preserve workers’ savings.

Acknowledgements I would like to acknowledge;

The Hon. Minister of Finance, Planning and Economic Development, who played a key role in our effort to prosecute this case

Workers union leaders and Federation of Uganda Employers (FUE), who offered us their support

Workers’ MPs who have supported us. The media – for reporting this story and putting our case in the

court of public opinionFinally, I would like to acknowledge the support we received from the Attorney General’s chambers, Sebalu and Lule Advocates and our internal legal team.

Background To The Case

On 21st July 1994 NSSF entered into a contract with M/s Alcon International Ltd, of Enterprise Road, Industrial Area, P. O. Box 47160 Nairobi, Kenya, for the erection of Workers House, which was then a partially constructed structure.

Later on, following breach of contract, the Fund terminated the building contract.

In May 1998, Alcon International Uganda Ltd sued the Fund and the dispute was referred to arbitration. After a lengthy arbitration that lasted from 1999 to 2001, retired Justice E. Torgbor awarded Alcon US $8,858,469 with interest at 6% per annum.

On 30th September 2003, NSSF appealed the award in the High Court, but Justice Arach Amoko dismissed NSSF’s appeal with costs.

NSSF was dissatisfied with the ruling in the Court of Appeal and engaged a new legal team to prosecute an appeal in the Supreme Court.

The Fund presented new arguments to the effect that Alcon International Ltd, incorporated in Uganda was not the company with whom NSSF signed a contract. The company therefore had no cause of action against the Fund.

Although it had no construction experience, Alcon had fraudulently won the tender for construction of Workers House by falsely holding out as a Kenyan company with experience.

Richard ByarugabaMANAGING DIRECTOR