UGANDA: COURT DISMISSES A PUBLIC INTEREST SUIT AGAINST THE PETROLEUM AUTHORITY OF UGANDA AND TWO LEADING INTERNATIONAL OIL COMPANIES

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On 11 April 2022, the High Court of Uganda (Court) dismissed a disguised public interest suit brought against the Petroleum Authority of Uganda (the regulator of the petroleum industry in Uganda) and the two leading international oil companies in Uganda, Total E&P Uganda and CNOOC Uganda Limited.

In the case of Andrew Oluka v Petroleum Authority Of Uganda, Total E&P Uganda & CNOOC Uganda Limited Miscellaneous Cause No. 252 of 2021, the Applicant sought a declaration that the ongoing procurement processes undertaken by the Respondents in respect of the East African Oil Pipeline (EACCOP) Project, the Tilenga Upstream project and the Kingfisher Development area project are being done in contravention of Articles 2, 26, 40 and 244 of the Constitution and all enabling laws providing for national content in the petroleum sector.

The Applicant also sought an order directing the Respondents to conduct a legal audit of all the oil petroleum procurement activities in the above-mentioned projects to ensure compliance with national content provisions of the law, an injunction restraining the Respondents from continuing to conduct any further procurements in the petroleum sector which does not comply with national content provisions of the law and a declaration that all business income derived from the procurements under the above-named projects is taxable in Uganda.

The Court dismissed the Application as an abuse of process for being frivolous and vexatious and for failing to use appropriately available procedures in the oil and gas sector and not being able to name any Human Right that was infringed or to be enforced, this was not a matter for public interest litigation.

In explaining its decision, the Court pointed out that as a custodian of justice, the Constitution and the rule of law, it is its responsibility to maintain social balance by interfering where necessary for the sake of justice and refusing to interfere where it is against social interest and the public good. In obiter, the Court further explained that there was a need to protect the jurisdiction of public interest litigation from blatant abuse by those who file applications with oblique motives. Had the matter succeeded, it would have brought to a halt the oil and gas program in Uganda.

It is expected that as the sector gains momentum, litigation is bound to increase. This decision provides some comfort that courts will consider only those actions that are deserving. Frivolous actions by overzealous and sometimes irritant litigants, at times  disguised as public interest actions will be sieved out by the courts. This will help the industry avoid unnecessary delays and paralysis as it embarks on the production journey.