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International Arbitration Forum

Ahmed et al. v. Uganda

Case summary

At a glance

Parties
Dr. Abdulmajeed Qasem Othman Ahmed (Yemen), Al-Ameri for Engineering, Trading and Contracting Company Ltd (Yemen) and Al-Ameri Intel Company East Africa Constructions Ltd. (Uganda) v. the Republic of Uganda
Forum and rules
ICSID arbitration proposed (notice of dispute stage only)
Treaty
Uganda Investment Code Act 2019, Part IV (Sections 24 and 25); no investment treaty
Sector
Construction; market redevelopment
Outcome
Only the claimants' Notice of Claims of 21 March 2022 is published. It opened a 90-day negotiation period. The published documents do not show whether arbitration followed.
Amount
Claimed: at least USD 858,000,000 (USD 350 million in construction profit plus about USD 508 million in loan interest).

The dispute

Dr. Ahmed is a Yemeni civil engineer. Through his Yemeni company and his 90%-owned Ugandan company, he agreed with the vendors' association that owns and runs the St. Balikuddembe (Owino) Market in Kampala (SSLOA) to finance and build a relocation market and a new main market. The agreements, a Project Agreement, a Loan Agreement for USD 352,794,400 and an escrow agreement, were signed in January and April 2020. On 3 November 2020 the Kampala Capital City Authority (KCCA) took over management of the market, and the claimants' staff were expelled from the site. The High Court ruled the takeover illegal on 2 June 2021, but on 29 June 2021 the President cancelled the redevelopment. The claimants argue that this was an unlawful expropriation without compensation under Section 24 of the 2019 Investment Code Act. They rely on Section 25 of the Act as Uganda's offer to arbitrate at ICSID.

Key holdings

  1. No decision has been published. The Notice argues that all three claimants are "foreign investors" under Section 1 of the 2019 Investment Code Act, because Yemen is not an East African Community Partner State. It also argues that financing and building the market redevelopment is an "investment" under the Act. ¶¶ 48–50
  2. The Notice argues that Section 24 requires prompt, fair, adequate and freely transferable compensation, paid before property is taken. On that basis it says interest runs from the takeover on 3 November 2020. ¶¶ 47, 51
  3. The claimants accept Uganda's offer in Section 25 to arbitrate at ICSID. They state that their consent is perfected on delivery of the Notice. They propose a 90-day negotiation period, which may be extended by a further 90 days. ¶¶ 52–53, 58–59
  4. The claimants seek more than USD 858,000,000. This is made up of a 25% contractor's profit on USD 350 million per year over four years (USD 350 million) and 6% compound interest on the loan over 15 years (USD 508,932,746.79). ¶¶ 54–55

Procedural history

  1. 24 January 2020The claimants and SSLOA sign the Project Agreement and the Loan Agreement for the redevelopment of the Owino Market.
  2. 15 May 2020KCCA issues a no-objection letter approving the project. A Commencement Letter follows on 21 September 2020.
  3. 3 November 2020KCCA takes over management of the market, and the claimants' personnel are expelled from the site.
  4. 2 June 2021The High Court (Miscellaneous Cause No. 328 of 2020) rules the KCCA takeover illegal.
  5. 29 June 2021A letter from the Senior Presidential Adviser cancels the ground-breaking ceremony and the redevelopment.
  6. 21 March 2022The claimants serve their Notice of Claims under the Investment Code Act. They accept ICSID arbitration and open a 90-day negotiation period.

Tribunal, counsel and experts

For the claimant
Bottega Di Bella

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Country
Economic sector
Documents