ALP Legal Alert

Regional court crosses US$ 1 million threshold in damages for infringements of the rule of law

By ALP Advocate
on
October 1, 2022

The East African Court of Justice finds that, in flouting its own municipal law in seizing and selling a commercial mall, Rwanda acted in contravention of the rule of law under the East African Community Treaty and awarded US$ 1,000,000 in damages as “reparation”.

Regional court crosses US$ 1 million threshold in damages for infringements of the rule of law


In a judgment delivered on August 30, 2022, the Appellate Division of the East African Court of Justice (EACJ) took a firm stand on the rule of law in the Community in its judgment in Attorney General of Rwanda v Union Trade Centre, Appeal No 10/2020. The matter involved the seizure (and subsequent auction) of a commercial mall in Rwanda in October 2013. At trial, the First Instance Division had found the seizure and auction to have been illegal and in contravention of the EAC Treaty. Rwanda appealed to the Appellate Division while the Union Trade Centre cross-appealed on remedies granted in relation to the taking of the mall.

By and large, the EACJ Appellate Division upheld the findings of the First Instance Division which was to the effect that, in seizing and auctioning the mall, Rwanda had acted illegally in relation to its own municipal law and flouted the rule of law under Article 6(d) and 7(2) of the EAC Treaty.

In addressing legal remedies, the Appellate Division deferred to the recognized principle in international law that a State which commits a wrongful act should make “full reparation”. And in that regard, it awarded US$ 1,000,000 as compensation to the Union Trade Centre for the wrongful acts of the Partner State in contravention of the EAC Treaty. The Appellate Division also awarded interest at 6% per annum from date of judgement of the First Instance Division, as the Trial Court, until payment in full as well as costs for the appeal, cross-appeal and in the Trial Court. The US$ 1,000,000 is the first time the regional Court has awarded damages in that figure. More importantly, it continues a trend of the Court of moving from mere declarations in respect of wrongful acts to granting “damages” as compensatory relief. This trend, which began in the appeal in Hon Margaret Zziwa v Secretary General of the East African Community, Appeal No 2/2017, is a testament of the Court coming across strongly on Partner States for non-adherence with the rule of law obligations under the Treaty.

The judgment affirms the regional Court positioning itself as a leading voice in championing the rule of law in the East African Community. The Appellate Division sent another reminder to EAC Partner States that it will not countenance actions that contravene the principle of the rule of law as guaranteed under the Treaty. Since 2006, the Court has stood firm on the rule of law (and the broader principle of good governance) as “foundational pillars of the integration agenda in the East African Community”. In effect, integration is not feasible (and cannot subsist) without adherence with the rule of law on the part of the Partner States.

The Union Trade Centre was represented in the matter before the EACJ by advocates from ALP East Africa country practices—that is, ALP Advocates (Francis Gimara SC and Lastone Gulume) and ALP Kenya (Hanningtone Amol).


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