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Contractors fight over NSSF money

By Vision Reporter

Added 4th September 2009 03:00 AM

Alcon International Kenya has threatened to go back to court if the $8.8m compensation is not paid to them. This exposes NSSF to the risk of having to pay twice.

By Vision reporters

Alcon International Kenya has threatened to go back to court if the $8.8m compensation is not paid to them. This exposes NSSF to the risk of having to pay twice.

Last week, the Court of Appeal ordered NSSF to pay Alcon International Uganda, a different company, $8.8m (sh18b) in damages for cancelling the contract for the construction of Workers House in 1998.

“If NSSF pays to the wrong party that is bad luck, but they still have to pay to us,” Davinder Hanspal, one of the directors of Alcon Kenya, told The New Vision on telephone from Nairobi.

“We signed the contract. We also have the title of Workers House. At the end of the day, NSSF will have to pay money to the people who signed the contract.”

According to the contract, Davinder Hanspal and his brother, Kultar, signed on behalf of Alcon International, “a company incorporated in the Republic of Kenya”, situated on Enterprise Road, Industrial Area, PO Box 47160 in Nairobi. The contractors were given the title deed of Workers House as security because they were going to pay 50% of the construction cost.

Davinder said they used Tumusiime, Kabega and Co. Advocates as their lawyers when they initiated the court case but fell out with them in 2006.

“Tumusiime Advocates were removed in May 2006 after we found that they were negotiating an out-of-court settlement with the NSSF lawyer. We had not given them instructions to do so,” Davinder said.

Since then, he said, their lawyer is Peter Kabatsi of Kampala Associated Advocates.

Contacted yesterday, Kabatsi confirmed that he was the lawyer of Alcon Kenya. “We are still their lawyers but the matter is not in court at the moment. We are waiting for their instructions.”

Tumusiime Advocates won the case in the Court of Appeal last week ordering the sh18b award, which could go up to sh40b when interests and lawyers’ fees are included.

Asked who they represented, Tumusiime Advocates named their clients as Alcon International Uganda, whom they say are the genuine claimants of the $8.8m.

“There is only one Alcon that is involved with NSSF and that is Alcon International Uganda,” said one of the lawyers of the Tumusiime group who declined to be named.

The dispute over which lawyers were to represent Alcon was subject of an earlier court case, which culminated into a February 18, 2008 ruling.

In the judgment, the Court of Appeal ruled that there were two Alcons: Alcon International Kenya, owned by the three brothers Hanspal, and Alcon International Uganda, said to be owned by their sister, Manjit Kent and her husband Rajesh Kent.

Davinder and Kultar Hanspal, who signed the contract, in their affidavits stated that they, together with their brother Inderjit, were the only directors of Alcon Kenya at the time of signing.

Kultar further stated that the couple Kent had never been involved in construction. He said he had employed Rajesh briefly to supervise the works in Uganda but fired him in 1996.

“I, therefore, confirm the position of Alcon International as at July 26, 2006 when Kampala Associated Advocates were appointed to act for the company and the instructions to Tumusiime, Kabega and Company Advocates were withdrawn,” Kultar said in his affidavit of July 22, 2007.

The judges, however, dismissed their statements.

They ruled that the Ugandan company executed the works but used the Kenyan company to win the contract because it did not have a track record in construction, one of the requirements set by NSSF.

They also ruled that the contract was won “fraudulently”. They struck off Alcon Kenya and named Tumusiime Advocates as the genuine lawyers. As a result, the $8.8m award, if it goes ahead, will go to Alcon Uganda, a company which did not have a formal agreement with NSSF.

Davinder has rejected the 2008 ruling. He said he wondered how Page Five of the contract, which contained their signatures, could have been missing.

“Page Five was missing from the court file, not once but twice. How could everybody have missed such vital information?”

He was also surprised that the ruling said an “Indian of Kenyan nationality, whom Tumusiime had never seen before”, appeared in court on May 23, 2006.

“How could he claim he had never seen me before when I initiated the case at the High Court and conducted the arbitration proceedings with him? In 2001, I swore several affidavits in front of Tumusiime,” an angry Davinder said. Enos Tumusiime, the former manager of Uganda Railways, could not be reached for comment.

It is not clear who the current directors and shareholders of Alcon Uganda are. Officials at the Registrar of Companies had by yesterday not been able to trace the file.

Contractors fight over NSSF money

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