Court dismisses 26 years of compensation dispute between NSSF and Alcon

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

However, the High Court last Thursday dismissed a case in which Alcon International, a contractor involved in the construction of Workers House, had sought damages for its equipment and machinery.

In a case that preceded a series of legal disputes dating back to 1998, Alcon sued NSSF in 2020, claiming it was wrongly excluded from recovering the equipment and machinery used to build Workers House in 1998 after NSSF had terminated its contract.

“(Alcon) has brought this action against (NSSF) seeking the return of plant, machinery, equipment and construction materials unlawfully detained since May 1998… or, alternatively, recovery of value… compensation for commercial loss, aggravated, special and general However, the NSSF denied the claims and urged the court to dismiss the case because the case had already been resolved in court rulings, which found that Alcon had no valid claim.

In 1998, Alcon sued NSSF for recovery of equipment and machinery in the amount of $1.97 million, a case that was settled for arbitration and decided in favor of Alcon, who was also awarded $2.78 million, among other things for losses suffered as a result of the myocardial infarction.

However, the arbitration award was later set aside by the Supreme Court, after which the case was referred back to the Supreme Court for a retrial, which was dismissed for failure to disclose a claim.

NSSF thus argued that the alleged seizure had largely been definitively determined.

The Fund also alleged that it initially contracted another company to construct 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 had contracted Alcon International Limited Kenya, but Alcon International Limited Uganda, which had not won the bid, undertook construction without any contract with NSSF.

“It is indeed true that the plaintiff (Alcon) was fraudulent when he entered the defendant’s (NSSF) premises, well aware that he… had no contract… as declared by the defendant: an illegality which once brought to the attention of the court, takes precedence over all questions regarding pleadings, including any admissions thereon. The plaintiff cannot seek to recover from a transaction in which he acted illegally,” Judge Musa Ssekaana said.

He also noted that Alcon had filed an arbitration case in 1998 for recovery of the value of equipment and machinery, noting that it could therefore not bring the same “case before this court” under the guise of a continuing tort, for which it is entitled to recovery of the value of the property”.

Therefore, he ruled that Alcon had not shown cause of action against NSSF, upholding all of NSSF’s preliminary objections.

“After all of (NSSF’s) preliminary objections regarding (Alcon’s) lawsuit have been accepted… this lawsuit is dismissed with costs to the defendant,” he ruled.

Mr. Gerald Paul Kasaato, deputy director of the NSSF, said in an email in response to the verdict that the dismissal of Alcon’s claims marked the end of a protracted court case that had lasted 26 years.

“We have always been confident that the Fund would prevail as the entire case… was based on fraudulent actions, which was upheld by the Supreme Court in 2013 and by the Supreme Court in 2019. Our decisions… are justified. We have cleared the title certificate for Workers House, the main subject of the suit, from any encumbrance,” he said.