Court of Appeal Blocks Bitature’s Bid to Halt Sale of Mortgaged Properties, Backs Arbitration Process
KAMPALA – The Court of Appeal has dismissed an application by companies owned by businessman Patrick Bitature seeking to temporarily stop the sale of six prime properties, including the prominent Protea Skyz Hotel on Naguru Hill, over a disputed multi-billion shilling loan.
In a ruling delivered last week, a panel of three justices unanimously held that the court lacks the legal authority to intervene in the matter, as the core dispute is subject to an ongoing private arbitration process.
The decision marks the latest chapter in a long-running financial battle between Bitature’s companies—Simba Properties Investment Co. Ltd and Simba Telecom Ltd—and Vantage Mezzanine Fund II Partnership, a foreign investment fund to which they owe a debt that has ballooned from an initial $10 million (Shs 36 billion) in 2014 to a staggering Shs 134 billion by 2023.
The court, comprised of Justices Frederick Egonda-Ntende, Eva K. Luswata, and Esta Nambayo, found that the attempt to appeal a prior High Court decision was not permitted under Ugandan law, which strictly limits judicial intervention in arbitration cases.
The Dispute’s Origins
The conflict stems from a loan agreement signed a decade ago. Bitature’s companies borrowed the funds to develop the Moyo Close apartments and the Skyz Hotel, using the properties as collateral by mortgaging them to the fund.
The relationship soured when the companies, citing a 2021 High Court ruling by Justice Musa Ssekaana, alleged that Vantage Mezzanine Fund did not have a legal existence. Based on this, they argued the mortgages were invalid and that the fund had no right to demand repayment or sell the properties.
In 2022, the companies sued in the High Court to challenge the fund’s move to sell the assets through its lawyers, Kirunda & Wasige Advocates, and auctioneers, Quickway.
However, in February 2022, Justice Phillip Odoki Mubiru of the High Court dismissed the lawsuit and a request for a temporary injunction. He ruled that questions regarding the validity and breach of the mortgages were matters explicitly reserved for arbitration in the original loan agreement, a process that was already underway.
The Appeal and the Final Ruling
Unsatisfied, Bitature’s companies took the matter to the Court of Appeal. They filed a notice of appeal and sought an emergency injunction to halt any potential sale of the properties while their main appeal was being considered.
The respondents vehemently opposed the application, arguing that the Court of Appeal had no jurisdiction to hear the matter. They leaned on Section 9 of Uganda’s Arbitration and Conciliation Act, which states, “Except as provided in this Act, no court shall intervene in matters governed by this Act.”
The appellate justices agreed with this reasoning. In their ruling, they stated that the central issues of the dispute are intrinsically tied to the loan agreement and are therefore the sole domain of the arbitral tribunal.
“It follows that there is no right of appeal that exists in our law against the decision intended to be appealed from,” the judges concluded. “We therefore have no jurisdiction to entertain this application.”
With the application dismissed, the court also ordered Simba Properties and Simba Telecom to pay the legal costs incurred by the respondents. The ruling effectively clears the path for the arbitration process to continue unimpeded, while the threatened sale of the properties remains a possibility subject to the outcome of that private proceeding.
The companies were represented by John Mary Mugisha and others, while the respondents were represented by Robert Kirunda, among other lawyers. The Commissioner of Land Registration, also listed as a respondent, had submitted that they would abide by the court’s decision.
