• Fri. Sep 29th, 2023

Joint Venture Termination of World Bank Roads Project Halted by Court

UGANDA, Mbarara | Real Muloodi News | A court has issued an interim order to prevent Ditaco International from terminating a joint venture with Multiplex, which had put the construction of government roads sponsored by the World Bank in western Uganda at risk.

High Court Judge Musa Ssekaana issued the order, restraining Ditaco from giving a termination notice that could have jeopardised the World Bank roads projects in Mbarara City, Ntungamo Municipality, and Kabale Municipality.

These projects are jointly managed by the Ministry of Lands, Housing and Urban Development, local government authorities, and the World Bank program, Uganda Support to Municipal Infrastructure Development.

Justice Ssekaana emphasised that this is a government project that benefits the entire public, and its termination would result in an irreparable loss for the country.

Multiplex, with a reputation spanning over 36 years, successfully argued that any breach of the agreement would cause irreversible harm to its standing.

The court recognised that the termination of the joint venture would not only impact the road construction development but also lead to the loss of employment opportunities for more than 300 Ugandans.

According to court records, Multiplex and Ditaco entered into a joint venture agreement on October 30, 2020, for the execution and performance of road construction projects in Ntungamo Municipal Council, Kabale Municipal Council, and Mbarara City.

However, disputes arose between the two firms during the project’s execution regarding the interpretation of the final joint venture internal agreement.

As a result, Ditaco applied to the Centre of Arbitration and Dispute Resolution, and the proceedings are pending.

Ditaco’s numerous communications to the contract users, which Multiplex considered a violation of the joint venture internal agreement, threatened the continuation of the contracts.

Multiplex argued that such actions would be detrimental to its interests and that of the government.

Justice Ssekaana ruled that the acts or threatened acts of breach or violations sought to be restrained by Multiplex are crucial to preserving the status quo until the arbitral proceedings conclude.

The court recognised that these acts would also impact third parties who have benefited from the joint venture agreement through sub-contracts.

Justice Ssekaana acknowledged that damages suffered by Multiplex, such as being blacklisted by the World Bank or the government, cannot be adequately compensated.

As the guardian of the rule of law, the court deemed it necessary to grant Multiplex the relief of an interim measure of protection or temporary injunction. This decision aims to safeguard the rights and interests of the parties involved and prevent irreparable harm during the ongoing proceedings.


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