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Spedag Interfreight Uganda Ltd & Others v Attorney General & Another (Consitutional Petition 85 of 2011)

Constitutional Court · [2020] UGCC 2079 · 2020 Petition Granted ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Constitutional petition under Article 137 challenging the constitutionality of a Government contract granting exclusive monopoly rights
Decision
Petition granted; the impugned contract provisions declared inconsistent with Articles 40(2) and 43 of the Constitution and void to that extent, with costs to the petitioners

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Holding

The Constitutional Court held that the petition disclosed a cause of action and was not hypothetical: it was the entering into of the contract, not its performance, that was challenged, so the threat to the petitioners' rights gave rise to a live dispute. Article 40(2) guarantees the right to carry on any lawful trade or business, which may be limited only by authority of law under Article 43. The contract granted the 2nd respondent monopoly rights over clearing, forwarding and handling of imports and exports through Mombasa, limiting the petitioners' Article 40(2) rights. As the respondents pointed to no enabling law and discharged no burden of justifying the limitation as demonstrably justifiable, the Government had no power to enter the contract. It was declared inconsistent with Articles 40(2) and 43 and void.

Facts

The petitioners are limited liability companies engaged in clearing, forwarding and handling import and export goods. Through the Ministry of Tourism, Trade and Industry, the Government entered into a contract dated 4 March 2009 with the 2nd respondent, a private company, for the establishment and management of an inland dry port at Tororo. The contract granted the 2nd respondent a 35-year licence to operate and, within that, exclusive rights for ten years to handle all sea-borne Ugandan goods passing through the Port of Mombasa for onward transfer to the inland dry port, covering some 97% of Uganda's imports and exports. Under clause 4.22 the Government covenanted not to grant competing rights to others. The 2nd respondent never built the port; the licence and exclusive rights were to become operative only on commencement of full operations. The petitioners challenged the grant of these monopoly rights as contravening their constitutional right to carry on trade or business under Article 40(2). The respondents contended there was no live dispute and that any limitation was justified in the public interest.

Issues

  1. Whether the petition discloses a cause of action under Article 137(3) of the Constitution.
  2. Whether the petition raises a real, live dispute or is merely hypothetical.
  3. Whether the Government's grant of exclusive monopoly rights to the 2nd respondent under the contract contravenes Article 40(2) of the Constitution.
  4. Whether any limitation of the petitioners' rights under the contract is justified under Article 43 of the Constitution.

Orders

  • Declaration that the act of the respondents executing a contract purporting to vest monopoly rights over clearing, forwarding and handling services of all imports and exports to and from Uganda through the Port of Mombasa in the 2nd respondent is inconsistent with and in contravention of Article 40(2) and Article 43 of the Constitution and to that extent null and void.
  • Costs of the petition awarded to the petitioners.

Key headnotes

Constitutional Law — Constitutional Petitions — Cause of action under Article 137(3)
A petition under Article 137(3) of the Constitution discloses a cause of action where the act, action or omission complained of is sufficiently described, the provision of the Constitution alleged to have been contravened is stated, and there is a prayer for a declaration to that effect.
Constitutional Law — Justiciability — Hypothetical questions and live disputes
A constitutional challenge to the entering into of a contract is not rendered hypothetical merely because the contract has not been performed; the threat created by the contract sustains a real, live dispute fit for adjudication.
Human Rights — Economic rights — Right to carry on trade or business under Article 40(2)
Article 40(2) guarantees every person in Uganda the right to practise a profession and to carry on any lawful occupation, trade or business, but that right is not unqualified and may be restricted and regulated by authority of law pursuant to Article 43.
Constitutional Law — Limitation of rights — Public interest must be grounded in law (Article 43)
Any limitation of a fundamental right in the public interest under Article 43 must be expressed in some law; governance and any limitation on account of public interest must have its root in law, and absent an enabling law the claim of public interest has no foundation.
Constitutional Law — Limitation of rights — Burden of proof and demonstrable justification
The onus of proving that a limitation on a right is reasonable and demonstrably justifiable in a free and democratic society rests upon the party seeking to uphold the limitation.
Constitutional Law — Government power to contract — Unconstitutional monopoly
The Government has no power to enter into a contract that limits a fundamental right under Article 40(2) where no law authorises the limitation and it is not shown to be demonstrably justifiable in a free and democratic society.

Legislation cited (9)

  • Constitution of Uganda art.40(2)
  • Constitution of Uganda art.43
  • Constitution of Uganda art.43(1)
  • Constitution of Uganda art.43(2)
  • Constitution of Uganda art.21(1)
  • Constitution of Uganda art.22(1)
  • Constitution of Uganda art.137(3)
  • East African Community Customs Union Protocol art.21
  • International Covenant on Economic, Social and Cultural Rights art.4

Cases cited (6)

  • Legal Brains Trust (LBT) Ltd v Attorney General of the Republic of Uganda (Appeal No. 4 of 2012)
  • Mbabali Jude v Edward Kiwanuka Ssekandi [2014] UGCC 15
  • Tinyefuza v Attorney General (Constitutional Appeal No. 1 of 1997)
  • Baku Raphael Obudra & Anor v Attorney General [2003] UGSC 3
  • Charles Onyango Obbo and Anor v Attorney General [2004] UGSC 1
  • R v Oakes (1986) 1 SCR 103
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.