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Alcon International Limited v Standard Chartered Bank of Uganda and Ors. (Appeal 3 of 2013)

East African Court of Justice · [2015] EACJ 53 · 2015 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from First Instance Division of the East African Court of Justice dismissing a reference concerning non-payment of a bank guarantee
Decision
Appeal dismissed; cross-appeal allowed; reference struck out for lack of jurisdiction

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The East African Court of Justice Appellate Division held that it lacked jurisdiction to entertain the reference. The Court found that under Article 30(1) of the EAC Treaty, only Partner States or Institutions of the Community can be proper respondents, not private entities or public officials. The Common Market Protocol did not extend the Court's jurisdiction ratione personae or ratione materiae to disputes involving private parties. Further, the Protocol could not be applied retroactively to acts occurring before its entry into force on 1 July 2010. The appeal was dismissed with costs to the respondents.

Outcome

Appeal dismissed; cross-appeal allowed; reference struck out for lack of jurisdiction

Facts

Alcon International Limited (Kenya) entered into a construction contract with Uganda's National Social Security Fund (NSSF) in 1994. The contract was terminated in 1998. Alcon sued and obtained an arbitral award of USD 8,858,469.97. NSSF appealed to the Ugandan courts. As a condition for stay of execution, NSSF obtained a bank guarantee from Standard Chartered Bank dated 29 October 2003, undertaking to pay the decretal amount to the Registrar of the High Court if the appeal was decided in Alcon's favour. The Court of Appeal decided in Alcon's favour on 25 August 2009. Alcon demanded payment under the guarantee, but the Bank declined. NSSF then obtained a stay from the Supreme Court on 9 September 2009 and a fresh guarantee was issued. The Supreme Court ultimately set aside the arbitral award on 8 February 2013. Alcon filed a reference in the East African Court of Justice on 20 August 2010, alleging breach of the Common Market Protocol by the Bank, the Registrar, and the Attorney-General of Uganda for failing to honour the guarantee and protect its cross-border investment.

Issues

  1. Whether the reference was properly before the Court as against the 1st and 3rd respondents within the meaning of Article 30(1) of the EAC Treaty, they being neither Partner States nor Institutions of the Community.
  2. Whether there was a cause of action against the Attorney-General of Uganda.
  3. Whether the Court had jurisdiction over acts that took place before the coming into force of the Common Market Protocol.
  4. Whether issues 4, 5, 6, and 7 as framed in the scheduling conference would be wholly academic.
  5. Whether the Court erred in law in failing to award costs to the successful parties.

Orders

  • Appeal dismissed with costs to the Respondents here and below.
  • Cross-appeal allowed with costs to the Respondents.

Rules and key headnotes

EAC Treaty — Jurisdiction of the East African Court of Justice — Article 30(1) — Proper Respondents to References by Legal and Natural Persons
Under Article 30(1) of the Treaty for the Establishment of the East African Community, only Partner States or Institutions of the Community are proper respondents to references filed by legal or natural persons. Private entities and public officials acting in their official capacity are not proper respondents under this provision.
EAC Treaty — Extension of Jurisdiction — Article 27(2) — Common Market Protocol
The jurisdiction of the East African Court of Justice can only be extended by a Protocol concluded pursuant to Article 27(2) of the Treaty for the specific purpose of extending the Court's jurisdiction. The Common Market Protocol, concluded under Articles 76 and 104 of the Treaty, does not extend the Court's jurisdiction ratione personae or ratione materiae to disputes involving private parties or public officials.
Common Market Protocol — Article 54(2) — Settlement of Disputes — Competent Authority
Article 54(2) of the Common Market Protocol provides that Partner States guarantee redress for infringement of rights recognized by the Protocol through their competent judicial, administrative, or legislative authorities. The phrase 'any other competent authority' in Article 54(2)(b) refers to a national authority within the Partner State, not the East African Court of Justice.
Treaty Interpretation — Non-Retroactivity — Vienna Convention on the Law of Treaties
A treaty cannot apply retrospectively unless a different intention appears from the treaty itself or such an intention is otherwise established. The Common Market Protocol, which entered into force on 1 July 2010, cannot be applied to acts or facts that occurred before that date. A juridical fact must be appreciated in the light of the law contemporary with it.
Jurisdiction — Ratione Materiae, Ratione Personae, Ratione Temporis
Jurisdiction is a unitary concept comprising three essential elements: jurisdiction ratione materiae (power to entertain the subject matter), jurisdiction ratione personae (ability of parties to appear), and jurisdiction ratione temporis (temporal parameters of the dispute). A court must have all three elements to exercise jurisdiction. Where any element is absent, the court must down its tools.
Mootness — Academic Issues — Absence of Live Dispute
Courts of justice exist to give binding decisions on live disputes or render advisory opinions where constitutionally empowered. Where there is no live dispute for resolution due to absence of proper parties or other jurisdictional defects, further examination of the matter would be an academic exercise. Courts decline to decide cases that raise merely hypothetical or abstract questions.
Costs — Exercise of Judicial Discretion — Relevant Considerations
Costs ordinarily follow the event unless the court for good reason otherwise orders. A court exercises its discretion improperly if it denies costs to a successful party based on irrelevant matters such as delays in unrelated proceedings to which the successful party was not a party, or on the basis of a party exercising its undoubted legal right of appeal in other proceedings.

Legislation cited (19)

  • Treaty for the Establishment of the East African Community Article 27
  • Treaty for the Establishment of the East African Community Article 28
  • Treaty for the Establishment of the East African Community Article 29
  • Treaty for the Establishment of the East African Community Article 30
  • Treaty for the Establishment of the East African Community Article 31
  • Treaty for the Establishment of the East African Community Article 32
  • Treaty for the Establishment of the East African Community Article 34
  • Treaty for the Establishment of the East African Community Article 36
  • Treaty for the Establishment of the East African Community Article 38(2)
  • Treaty for the Establishment of the East African Community Article 40
  • Treaty for the Establishment of the East African Community Article 76
  • Treaty for the Establishment of the East African Community Article 104
  • Treaty for the Establishment of the East African Community Article 151
  • Protocol on the Establishment of the East African Common Market Article 29
  • Protocol on the Establishment of the East African Common Market Article 54
  • Protocol on the Establishment of the East African Common Market Article 55
  • Vienna Convention on the Law of Treaties Article 28
  • Vienna Convention on the Law of Treaties Article 29
  • Vienna Convention on the Law of Treaties Article 31(1)

Cases cited (9)

  • Anyang' Nyong'o & Others v Attorney-General of Kenya & Others (Reference No. 1 of 2006)
  • Modern Holdings (E.A.) Ltd v Kenya Ports Authority (Reference No. 1 of 2008)
  • Owners of the Motor Vessels "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR I
  • Emmanuel Mwakisha Majiwasi & 748 Others v Attorney-General of Kenya (Appeal No. 4 of 2011)
  • Attorney-General of Tanzania v African Network for Animal Welfare (Appeal No. 3 of 2011)
  • THE EAST AFRICAN LAW SOCIETY VS. THE SECRETARY-GENERAL OF THE EAST AFRICAN COMMUNITY
  • Attorney-General of Kenya v Independent Medical Legal Unit (Appeal No. 1 of 2011)
  • Borowski v Attorney-General of Canada [1989] S.C.R. 342
  • Island of Palmas arbitration

Full judgment

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Alcon International Limited v Standard Chartered Bank of Uganda and Ors. (Appeal 3 of 2013) [2015] EACJ 53 (27 July 2015)
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.