Court rejects NSSF and Alcon’s 26-year compensation dispute

The National Social Security Fund (NSSF) can finally breathe a sigh of relief. It has been a 26-year court battle that threatens to cost the fund billions of shillings.

However, the Supreme Court last Thursday rejected a case in which Alcon International, a contractor involved in the construction of the Workers’ House, sought compensation for its equipment and machinery.

In a case that preceded a series of court disputes dating back to 1998, in 2020 Alcon sued NSSF, claiming it was unfairly prevented from taking back equipment and machinery used to build the Workers’ House in 1998 after NSSF terminated its contract .

“(Alcon) has brought this lawsuit (NSSF) seeking the return of plant, machinery, equipment and construction materials wrongfully detained since May 1998…or, alternatively, recovery of value…aggravated, special and general commercial loss.” requested compensation. “Damages, interest and costs,” court documents read in part. However, NSSF denied the allegations and urged the court to dismiss the case because the matter had already been resolved in court decisions and found that Alcon did not have a valid claim.

In 1998, Alcon sued NSSF for $1.97 million to recover equipment and machinery; This case went to arbitration and was awarded, inter alia, in Alcon’s favor, awarding Alcon $2.78 million in damages for damages suffered. watch.

However, the arbitrator’s decision was later annulled by the Supreme Court, and the matter was sent to the Supreme Court for retrial, but the decision was rejected due to the lack of disclosure of the cause of action.

NSSF therefore argued that the alleged seizure was substantially conclusive.

The fund also argued that it had initially signed a contract with a different company for the construction of the 19-storey building, but later discovered that Alcon International Limited had taken over the contract without its knowledge, which amounted to fraud.

Court documents show that NSSF contracted with Alcon International Limited Kenya, but Alcon International Limited Uganda, which did not win the tender, undertook the construction without any contract with NSSF.

“It is indeed true that the plaintiff (Alcon) committed fraud knowing full well that he had no contract when he entered the premises of the defendant (NSSF)… as the defendant stated, an illegality brought to the attention of the court defense questions, including the admissions made in relation to all these. Justice Musa Ssekaana said the plaintiff cannot claim compensation for an act he committed illegally.

He also stated that Alcon filed an Arbitration Action in 1998 to recover the value of the equipment and machinery and therefore cannot bring the same “cause of action in this court under the guise of a continuing tort.” has the right to demand recovery of the value of the property”.

Therefore, it affirmed all of NSSF’s preliminary objections, holding that Alcon had not established a continuing cause of action against NSSF.

“Following approval of all preliminary objections raised by (NSSF) in relation to (Alcon’s) case… this action is dismissed, including costs to the defendant,” it ruled.

Mr Gerald Paul Kasaato, deputy director general of NSSF, said in an email responding to the decision that the rejection of Alcon’s requests marked the end of a protracted case that lasted 26 years.

“Given that the entire case was based on fraudulent acts, we were always confident that the Fund would prevail; this was confirmed by the Supreme Court in 2013 and the Supreme Court in 2019. Our decisions… were confirmed. “We have the title deed document of the Workers’ House, which is the main subject of the case, and there is no encumbrance,” he said.