William Mwanza, tralac Researcher, comments on community law in the East African Community and the recent departure by the EAC Court of Justice from its earlier cautious approach

There is an emergence of vibrant case law in the East African Community (EAC) within the context of community law. Natural and legal persons have brought a significant number of cases before the EAC Court of Justice. Among the most litigated upon aspects is the undertaking by Partner States to adhere to the fundamental and operational principles of the EAC Treaty – particularly those of good governance, rule of law, democracy and human rights, provided for in articles 6(d) and 7(2) of the Treaty. Within this, a wide range of issues have been brought to the Court for its determination. A trend has emerged whereby the court has taken a cautious approach to interpreting its jurisdiction with regard to national laws and institutions, including its ability to make orders for restitution at the national level where such principles are found to be violated, and to consider national court orders in its interpretation of the Treaty. This vertical and horizontal interaction between regional and national laws and institutions is at the crux of community law. A recent Appellate ruling in the case of Henry Kyarimpa v Attorney General of Uganda represents a departure from the earlier cautious approach.

Facts of the case

The dispute involved a tendering process for construction of the 600 MW Karuma Hydroelectric Plant and associated transmission lines (‘the Karuma Dam’). The applicant in the case was Henry Kyarimpa, a Procurement Consultant aligned with China International Water and Electric Construction Corporation, which placed a tender bid for the Karuma Dam. The defendant was the Attorney General of the Republic of Uganda.

Prior to award of the tender, the Inspector General of Government of Uganda (IGG) received a complaint on the transparency and integrity of the tendering process and after investigating the matter, issued a report recommending the cancellation and repetition of the entire procurement process. The cabinet of the Republic of Uganda debated the report and then directed that the initial procurement process be cancelled. Complaints were then lodged at the High Court of Uganda, which after considering the matter, issued an order restraining the implementation of the recommendation of the IGG Report. The Government of Uganda still proceeded to cancel the procurement process. The matter was then brought to the Constitutional Court of Uganda, which issued an injunctive order restraining the Government from implementing the recommendations of the IGG report, or interfering with the initial procurement process, including awarding a contract to the best evaluated bidder. The High Court then issued a final order restraining implementation of the IGG report and directing the Government to declare the best evaluated bidder for the construction of Karuma Dam. The Government of Uganda lodged an appeal in the Court of Appeal of Uganda against the orders. No contempt of court proceedings were lodged in the High Court of Uganda. The Government of Uganda subsequently signed a Memorandum of Understanding with Sinohydro Corporation Limited for construction of the Dam.

Determination by Court of First Instance

The applicant challenged the process that led to selection of Sinohydro in the EAC Court, claiming that the Government of Uganda had breached provisions of the EAC Treaty, including articles 6 (c) and (d), and 7(2) (on the fundamental and operational principles of good governance, rule of law, accountability and democracy) and 8 (1) (on directing policies and resources towards attainment of objectives of the Treaty). It moved the Court to declare that the selection of Sinohydro was a breach of and an infringement of the Treaty and to enforce compliance with the Treaty inter alia by directing that the MoU with Sinohydro be cancelled, and directing the Government to comply with national court orders that were in place on the matter.

The Respondent argued that the cancellation of the initial procurement process had been done in line with the Constitution and laws of Uganda and with a bilateral arrangement between the Governments of Uganda and China to secure funding through Exim Bank of China for construction of the Dam by Sinohydro, a company wholly owned by the Government of China. It relied on provisions of the Public Procurement and Disposal of Assets Act that the employer reserves the right to cancel the bidding process at any time without incurring liability (section 75) and that where there is a conflict with an international agreement, the latter prevails (section 4(1)). The Respondent argued that even though it was not in written form, such a bilateral arrangement existed and is what the award of the contract to Sinohydro was based on.

In its determination, the Court held that there will be instances where it has to look into the national laws of a Partner State in order to determine whether the Treaty has been breached. It looked at the Ugandan constitution’s provisions regarding international agreements and section 4 (1) of the PPDA Act that obligations arising out of these prevail. It held that though the bilateral agreement was not there in writing, it was inconceivable that the President, Ministry of Energy, and PPDA Authority would all refer to an arrangement that did not exist, and stated that the Court could not superintend the Republic of Uganda in its executive and other functions. On the Government being in contempt of national court orders, the Court held that it could not find contempt when the affected courts had not done so, as this would be over-stepping its jurisdiction. It held that had the national courts found the Government of Uganda to be in contempt of its rulings, it would have then applied such decisions in its consideration of whether the Treaty had been violated. In view of these issues, the Court held that the decision to award the contract to Sinohydro was not inconsistent with provisions of the Treaty. It declined to grant an order cancelling the MoU between the Government of Uganda and Sinohydro as the issue was before national courts and had to be seen through to its logical conclusion. It also declined to grant an order for the Government to comply with the national court orders.

Appellate Court’s determination

Unsatisfied with the Court of First Instance’s ruling on this and other matters in the reference, the applicant brought the matter to the Appellate Division of the EAC Court.

In its ruling of February 2016, the Appellate Court held that the Court of First Instance erred in law in finding that a bilateral agreement existed on the basis of inferences drawn from other documents on record, including correspondence from Uganda Government officials. It held that all of Uganda’s internal laws contemplated a written agreement – a prerequisite for any treaty to be ratified and executed. Since the Respondent had failed to prove that such a written agreement existed, it held that the selection and signing of MoU with Sinohydro was arbitrary, illegal and unlawful under Uganda’s laws as it was only the existence of such an agreement that would have allowed for the selection of the company outside the PPDA Act. In view of this, the Court found that the Respondent had breached the principles of rule of law, transparency and accountability as provided for in articles 6(d) and 7(2) of the Treaty.

The Appellate Court also held that the Court of First Instance had erred in law in finding that since the national courts had not been approached to determine whether the Respondent was in contempt of court, then it lacked jurisdiction to delve into those matters so as to determine whether the Treaty had been breached. It viewed this as an abdication of the court’s role of interpretation and application of the Treaty. It held that it was for the court itself to determine whether there had been disregard of any court order – without the help of national court decisions - and to apply this finding in the interpretation of the Treaty. It held that this was more so in a legal framework that does not set the exhaustion of local remedies as a prerequisite for bringing a matter to the regional court. It applied this reasoning and found that the process of selecting Sinohydro had proceeded in spite of court orders existing at all material times. It therefore found that the selection was in disobedience and disregard of pertinent court orders and hence a violation of the rule of law principle provided for in the Treaty. The court noted that such actions can jeopardize the attainment of the objectives of the Treaty. It highlighted how observance of rule of law is a premier value in the EAC as evident by the authority vested in the court by framers of the Treaty, to ensure adherence to law in interpretation and application of, and compliance with the Treaty (article 23).

On the same basis of article 23 of the Treaty, the court held that it is not limited to making declarations of violation of the fundamental and operational principles of the Treaty without making orders for restitution at the national level as had been the approach in some previous disputes such as Venant Masenge v Attorney General of Burundi. It held that it can in fact make orders for cessation, reparation and other such relief. In the present case, it found that it could not grant the requested order for the MoU with Sinohydro to be cancelled only because construction of the dam was already at an advanced stage.

As can be noted, the Appellate ruling has cast further light on how the regional court should engage with national laws and institutions like national courts in carrying out its core function, i.e. interpretation and application of Treaty provisions. Although there was a previous tendency by the court not to grant orders for restitution at the national level even where the fundamental and operational principles of the Treaty are found to have been breached, the ruling of the Appellate Court in the present case represents a departure from this tendency that makes this issue a very live one. It will be important to monitor how similar cases will be handled going forward. This should inform our understanding of how best such regional instruments should be designed and interpreted in order to maintain an effective balance between regional and national laws and institutions in a system of community law. This is far from being an easy balance, but one that must be effectively worked all the same.

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