Govt, Great lakes contract illegal —court

The Constitutional Court has ruled that the contract granted to Great Lakes Ports Ltd to handle all clearing, forwarding and handling services for all imports and exports through the inland dry port at Tororo and Mombasa is illegal.

The Government in March 2009, through the tourism ministry, granted Great Lakes Ports Ltd the contract with a 35-year operations licence.

Spedag Interfreight Uganda Limited, SDV Transami (U) Ltd, Damco Logistics (U) Ltd and Threeways Shipping Services Group Ltd petitioned the Constitutional Court, seeking to annul it, on grounds that it was unconstitutional.

In a ruling delivered on Thursday, Justice Frederick Egonda-Ntende said the Government does not have the power to enter into a contract that limits the petitioners' fundamental rights guaranteed under the Constitution.

"The Government's act of executing a contract, which purported to vest monopoly rights over clearing, forwarding and handling services of all imports and exports to and from Uganda through Mombasa port, contravenes the Constitution," he ruled.

He added: "Before the Government could countenance entering into the agreement, there had to be legislation that expressly authorised them to do so given the fact that the impugned provisions of the contract contravened the petitioners' right."

The justices have, therefore, directed the Government to pay the petitioners costs of the petition. Other justices, including Chief Justice Alfonse Owiny-Dollo, Kenneth Kakuru, Cheborion Barishaki and Christopher Madrama Izama, agreed with Egonda-Ntende's ruling."I agree with the reasoning, findings and conclusion of Justice Egonda-Ntende.

Therefore, orders are hereby given in the terms proposed by him," Owiny-Dollo said.

Exclusive licence

Justice Barishaki observed that the agreement granted Great Lakes Ports Ltd an exclusive licence. This, he said, amounts to 97% of all the imports and export cargo from Uganda through the port of Mombasa.

This, according to the judge, threatened the participation of the petitioners in the business  of cargo handling and clearance through the said ports. This was creating an unjustified monopoly in contravention of their rights guaranteed under the Constitution.

The lawyers of the applicants: Ebert Byenkya and Anthony Bazira from Byenkya, Kihika and Company Advocates, at the hearing of the petition, submitted that Article 40 (2) of the Constitution establishes a free market economy in Uganda in relation to lawful professions, occupation, business or trade.

This, the lawyers said, outlaws the establishment of any monopoly by the Government in respect of the same so as to protect and preserve the rights of all persons engaged in the various aspects of the free market.

Bazira argued that the actions of the permanent secretary of granting a licence to Great Lakes was illegal because the power to create ports is vested in the Council of the East African Community .

He added that the power to designate customs area is vested in Uganda Revenue Authority's commissioner general.

Not unconstitutional

In response, principal state attorney Margaret Nabakooza contended that the terms of the contract are neither inconsistent nor in contravention of the Constitution.

She also alleged that the contract did not grant Great Lakes monopoly rights nor does it bar the petitioners and other citizens from conducting the business of clearing and forwarding in Uganda.