The applicants submitted that there are other authorities given to the GOU acting through the Minister to enter the EA2 PSA, including Article 23.5. These authorities include pre-written constitution powers preserved by the Constitution. This is evidenced in Article 274 of the Constitution. The applicants contended that the existing common law or prerogative powers vested in the President and the rest of the executive continue to apply, including the power to waive or vary payment of tax which existed prior to the enactment of the Constitution. Therefore the pre-written constitution powers are one of the sources of the Minster’s powers to enter into Article 23.5.   The applicants contended that under the Constitution of Uganda, the Minster had powers to enter the PSA Article 23.5. Objective I of the Constitution required all organs and agencies of the State to apply the objectives and principles in the Constitution in interpreting any other law or implementing any policy decisions. These objectives include the right to development (objective IX) and stimulation of industrial development by adoption of appropriate policies (objective XI(ii)).

The terms of the PEPA are worded to support the honouring of obligations such as Article 23.5 as it encompassed policies aimed at stimulating industry and encouraging private initiative for the benefit of Uganda.   The applicants argued that Article 2 of the Constitution provides for the supremacy of the Constitution. The applicants argued that the Constitution does not make express provisions of granting tax exemptions or not. There is also no express provision that the general powers of the Constitution shall prevail over statute law where the two are inconsistent. The applicants argued that the vesting of executive power in the Constitution in the President gives him very wide powers. There is no specific provision preventing the President from granting a tax exemption in the Constitution. The applicants submitted that Article 11(2) of the Constitution also confers wide powers on the cabinet. This is the source of the Minster’s powers to enter into Article 23.5. Article 23.5 does not seek to amend the ITA.

In respect of issue 1.3, the applicants requested the Tribunal not to make any ruling on the application of international law to the present dispute. In short, the applicants abandoned the said issue.   As regards issue1.4, the applicants contended that the respondent was an agent of GOU. While its actions bind GOU, it is also bound by GOU. The Uganda Revenue Authority Act 1991 (URAA) established the respondent as a central body for the assessment and collection of specified revenue and to administer and enforce the laws relating to such revenue. Under the said Act, the Authority is an agency of the GOU. The applicants cited Heritage Oil and Gas Limited v URA Civil Appeal 14 of 2011 where the court said that URA is not autonomous of GOU. URA as a statutory agent is part and parcel of GOU. It cannot therefore be seen to disassociate itself from the PSA. Thus the PSAs are agreements entered into by the GOU but to which the respondent is also a party. The applicants argued that the effect of the decision in Heritage is that the GOU cannot simply ignore the EA2 PSA Article 23.5. The Minster signed on behalf of the GOU. The respondent as an agent of GOU clearly cannot ignore a legally binding obligation of the GOU, its principal.

The applicants argued the Tribunal should enforce Article 23.5 exercising the jurisdiction conferred on it by the TAT Act. The applicants contended that the Tribunal’s powers are wide. They include the powers of it to “stand in the shoes” of the decision maker and exercise all the powers he or she had at the time the decision was made. The Tribunal can make a new decision in substitution of the original one.   Issues 1.5 and 1.6 dealt with the doctrines of estoppel and of legitimate expectation respectively. The applicants contended that estoppel refers to circumstances in which by the operation of law an individual or body is prevented from behaving in a particular manner. References to estoppel include reference to legitimate expectation. Legitimate expectation applies to prevent the GOU from ignoring its obligations under the EA2 PSA Article 23.5. Similarly, the principle of pacta sunt servanda may also operate to prevent unfairness.   The applicants also relied on “legitimate expectation”, a principle distinct from estoppel. The applicants argued that since estoppel cannot apply to the GOU, the references to estoppel in the objection refer to GOU being estopped by other principles of fairness particularly legitimate expectation and pacta sunt servanda. The applicants contended that legitimate expectation can and does apply to prevent the GOU from ignoring its obligations under the EA2 PSA Article 23.5. Similarly, the principle of pacta sunt servanda applies.   The applicants cited the case of Council of Civil Services Union v Minister for Civil Service [1985] AC 374, where Lord Fraser said: “A legitimate expectation may arise either from an express promise given on behalf of a public authority or from the existence of a regular practice which the claimant can reasonably expect to continue…” The applicants argued that its legitimate expectation is clearly within the terms as defined. The applicants submitted that the principle of legitimate expectation applies so as to estop an agency of the state going back on its representation. The applicant submitted that the GOU through the Minister entered into the PSA. The GOU has bound the revenue authority, the URA, as its agent, to honour its agreement. The Tribunal should ensure that the respondent does this.

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