In a letter, written on behalf of Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited, and Elgon Terrace Hotel Limited - all companies belonging to city businessman Patrick Bitature - demanded that Monitor not only retracts the story but also compensate Bitature for the reputation damage the publication had caused.
Skyz Hotel Naguru, one of the properties under contention
On Friday, May 13,
2022, Muwema & Company Advocates and Solicitors asked Monitor Publications to retract a story stating that High Court Judge, Musa Ssekaana had asked the Uganda Registration Services Bureau-URSB to consider
documents in the Simba Telecom takeover.
In a letter, written on behalf of Simba Properties Investment Co.
Limited, Simba Telecom Limited, Linda Properties Limited, and Elgon Terrace
Hotel Limited - all companies belonging to city businessman Patrick Bitature - demanded
that Monitor not only retracts the story but also compensate Bitature for
the reputation damage the publication had caused.
“Be advised that the
publication of the above-impugned story is neither fair nor justified as it
amounts to deliberate business defamation which has unnecessarily damaged and depicted each of our clients in a very negative corporate light; as a result
of those defamatory publications, our clients have jointly and severally,
suffered substantial loss and damage now provisionally estimated at USD 1,000,000
for which your company is held directly liable,” the letter read.
It also demanded that the money be paid in seven days together with the lawyer’s legal fees of USD 100,000. But instead of publishing
an apology retracting the said story, Monitor five days later, carried
an advert in which Quickway Auctioneers and Court Bailiffs put Bitature’s
properties up for auctioning if he fails to pay his creditors within 30
properties include; Elisabeth Royal Apartments, Protea Hotel Naguru and Moyo
Close Apartments; all managed under Simba Apartments.
was quick and ferocious. “We wish to inform the
general public that the said advert has been issued without any legal
basis. It is a malicious advert whose sole purpose is to alarm and cause
irreparable damage to our client’s business and reputation,” Bitature’s
response issued through his lawyers of Muwema & Co. Advocates reads.
It adds that
Bitature’s properties are not liable to be advertised for sale by any
mortgagee purported to be represented by Kirunda & Wasige Advocates and
Quickway Auctioneers and Court Bailiffs because they
represent Vantage Mezzanine Fund II Partnership, an organization
whose long-standing Commercial dispute was decided against them.
“The above dispute was
settled…by Justice Musa Ssekana…that Vantage Mezzanine Fund II Partnership is a
non-existent legal entity which had no locus standi to file the suit… So, from
the 9th May 2022, M/s Kirunda & Wasige Advocates ceased to have a client to
act for and for that matter, they cannot claim to be instructed to take legal
action of any form by or for the non-existent Vantage Mezzanine Fund II
Partnership,” the response adds.
What the court said
On May 9, 2022, High Court Judge Musa Ssekaana ruled that Vantage
Mezzanine Fund II Partnership has no legal basis to sue anybody in Uganda.
The entity had rushed
to the High Court to seek a judicial review over the decision by the Uganda
Registration’s Services Bureau-URSB to refuse the transfer of shares to it from
four of Bitature’s companies including; Simba Properties Investment Co.
Limited, Simba Telecom Limited, and Linda Properties
Limited and Elgon Terrace Hotel Limited.
According to the
entity’s court filings, URSB’s action of refusing to register documents
lodged by Vantage upon confirming that the same conform with registry
requirements was, “irrational, arbitrary, unreasonable, clothed with
procedural impropriety, discriminatory, erroneous on the face of the record,
lased with bias and malice, ultra vires, unfair, unjust and illegal and
The application for
the judicial review also alleged that URSB’s halting of the
registration of documents properly lodged for registration until the completion
of an arbitration process was against its mandate and the law on
the registration of documents. The organization, therefore, asked that the court
intervenes and order that the halting or delaying of the
registration of documents lodged before the URSB on June
18, 2021, was unfair, discriminatory and illegal.
They also wanted an
order compelling URSB to immediately complete the process of
registering the documents that would transfer shareholding in Bitature’s
firms and asked the court
to issue an order to URSB to; “desist from entertaining any other
processes, colluding with or otherwise entertaining the interference of persons
ultra-vires the registration process, or acting in any manner that is contrary
to the law and process of registering documents, or in any way frustrates or
otherwise offends the applicants’ rights.”
In its response to the application, URSB in an affidavit sworn in
by Patricia Opoka Akello who is the Manager of Document Registration and
Licensing admitted that indeed she received documents
from Vantage to register resolutions and share transfers from Simba
Properties Investments Co. Ltd, Simba Properties Ltd, Linda Properties Ltd and
Elgon Terrance Hotel Ltd.
However, four days
later, they received documents from Muwema & Co Advocates &
Solicitors objecting to the registration of the said
resolutions and transfers of shares citing a court order referring
the matter in dispute to arbitration.
Akello said that the registration services bureau paused the registration of the said documents to enable its
official to verify the Court Order, and to peruse the Court record with a view to
understanding the nature and effect of the said court order…
confirmed that there was indeed a matter before Justice Wamala in which he
delivered a ruling confirming that there existed a dispute between the
applicant and the Simba Companies regarding the Mezzanine Term Facility
Agreement (MFTA) and referred the same to Arbitration,” Akello’s affidavit
reads in part.
After a meeting with
both parties, the affidavit adds, that URSB, was convinced that the documents
submitted to it are part of the dispute that was yet to be decided through
arbitration. This is what forced Vantage to rush to court to force URSB to
change its decision.
When the matter came
up for hearing, Bitature’s companies applied to be added to the suit arguing
that any decision reached by the court would affect them yet they would
have not been heard. Ssekaana allowed them to join the suit.
In their own response
to the suit, they contended that the application to transfer the
shares by Vantage was fraudulent, misleading and erroneous since it
was not authorized by the respondents’ valid board resolutions.
At the start of the
hearing of the suit, four issues were framed for the court’s determination:
whether Vantage has the locus to bring judicial review proceedings;
whether it sets out a proper case for judicial review;
whether it raises any grounds for judicial review and
whether it is entitled to reliefs it sought.
In his ruling, Ssekaana agreed with URSB and
Bitature’s companies that indeed Vantage Mezzanine Fund II
Partnership had no legal capacity to sue anybody in Uganda. URSB’s lawyers
had submitted that Vantage is a non-existent legal entity and
hence incapable of instituting these proceedings.
The Partnership which is
South African owned, to operate legally in Uganda had to first be registered in
accordance with Ugandan laws and failure to do so invalidates their activities
in the country including instituting a legal proceeding.
reads in part: “The law in Uganda is prohibitive of such a partnership to
operate without registration and penalizes the offending party continuously for
offending the provision for registration under the partnership Act.
present case, the applicant contends that it is a partnership, which means that
it must comply with the law which requires registration in order to have
the capacity to sue or not to sue in Uganda. The applicant’s status as a recognized
entity in South Africa has not been proved to the satisfaction of this
court since there is no single registered document that has been produced
before this court apart from a few pages of the unregistered partnership
The judge also
rejected the argument by Vantage that foreign partnerships are
free to operate in Uganda outside the regulatory registration requirements
contained in the Partnerships Act and the Business Names Registration
“Order 30 of the Civil
Procedure Rules provides suing and being sued once the partnership has
satisfied the mandatory requirements of the law,” the ruling adds. “Therefore,
the international partnerships or foreign partnerships just like the Ugandan
partnership cannot be recognized once they are not registered since their
identities are unknown and it may open the door wide for fraud in their
transactions and dealings. The locus standi or standing to sue (capacity) in a
partnership name should be by mandatory registration under the Partnership Act
and Business Names Registration Act which sets out the regulatory framework for
partnerships in Uganda.”
that Vantage has no legal rights in Uganda its case collapsed. However, Ssekaana nonetheless determined the
other four issues that were framed for determination albeit without
In his determination, Ssekaana stated that
URSB abdicated its responsibility when it entertained objection to the transfer
of shares citing a court ruling that was not binding to it.
Justice Ssekaana ruled:
“The 1st respondent misdirected itself to stop the registration process by
taking into account extraneous matters related to the arbitration process. The
above decision is very instructive on the powers of the Registrar General and
the same cannot be curtailed by court proceedings or Arbitration proceedings
unless there is a specific court order stopping such exercise of power.
Arbitration proceedings are not injunctive reliefs against the execution of the
mandate of the Registrar of Companies. Any person likely to be aggrieved by such
exercise of power is at liberty to apply for temporary relief pending the
determination of the arbitration or court proceedings. Therefore, the decision
of the 1st respondent refusing to consider registration of documents
because the matter was referred for arbitration was illegal and contrary to the
law in absence of an order of the court granting injunctive relief.”
He however disagreed with Vantage’s challenge
to URSB’s decision to allow Bitature’s companies to challenge the
registration of the documents. “The Registrar of Companies has wider
powers in registering powers and this may include verification of the
documents, which may indeed involve consulting with the company officials in
order to ensure the register is free of illegal documents or wrongly obtained
or executed documents… The first respondent was justified and right to
hear the affected parties and cannot be faulted for this exercise of power to
hear the parties,” the ruling said.
The genesis of the legal battle
It is not yet known how Vantage which had been ruled not to have legal status in
Uganda would then move to attach Bitature’s properties. However, what is known
now is that the two have been locked in legal battles, for now, four years. In
2014, Bitature entered into an agreement with Vantage that extended credit to
him to help in his real estate development.
According to 2019
court filings, Vantage provided Bitature with $10million and agreed to such
terms that if he fails to pay this money, it would be turned into shares to
Vantage. The agreement also stated that, in case of any disagreement, they
would be solved through arbitration not court.
While URSB was
declining to act on the Vantage share transfer it cited a judgement by Commercial
court judge, Boniface Wamala who ruled that indeed the arbitration clauses of
the agreement ought to be the basis through which Bitature and Vantage solve
Clause 43.1 of
the Mezzanine Term Facility Agreement (MTFA) that Bitature
signed with Vantage reads; “Any dispute, claim, difference or controversy
between the parties arising out of, relating to or having any connection with
this agreement including any dispute as to its existence, validity,
interpretation or performance, breach or termination or the consequence of its
nullity and any dispute relating to any non-contractual obligations arising out
of or in connection with…”
But even when Bitature,
through his lawyers, admitted to the existence of the arbitration clauses, he
argued that these were included in the agreement under duress and that is why
other than resorting to it, he would wish the High Court to intervene instead
to solve the dispute because it had unlimited powers over any civil matters.
When the matter came
up for hearing, one issue was agreed upon for determination which
was; whether the arbitration clause contained in the contract is
valid, binding and enforceable between the parties.
In his ruling issued on June 16, 2021, Justice Wamala found out that indeed there existed a valid
agreement between Vantage and Bitature and that this agreement contained an
arbitration clause that ought to be respected.
Wamala held thus: “It
follows therefore that where the question as to the existence and validity of
an arbitration agreement has been brought before the court if the court upon
investigation finds that the arbitration clause exists and is not invalid, the
court must refer the matter to the arbitral tribunal to investigate any other
matters concerning the contract between the parties…
For the avoidance of
doubt, questions regarding the validity or not of the contract in issue are one
of the issues that lie within the domain of the arbitral tribunal. Contrary to
the submissions of the Respondent's Counsel, such questions cannot be the basis
for divesting the arbitral tribunal of jurisdiction and instead investing in
Such an argument would amount to construing the provisions of the
ACA in reverse mode.”
On the claim that the
clause on arbitration was entered into the agreement by duress, the judge ruled
that there was no evidence to that effect.
In fact, he held that it is scandalous for a
person of Bitature’s stature and the nature of lawyers who were representing
him to claim that he was forced into an agreement against his will.
“The parties agreed to
three possible choices of the seat or legal place of arbitration, namely Uganda,
London or Mauritius. The Respondents are said to be Ugandan Nationals. The
Applicant is said to be a South African entity. The jurisdiction of South
Africa is not one of the three agreed places of arbitration...Having three
choices of which the complainant’s jurisdiction is included and the other
party’s jurisdiction not included was the fairest the Respondents could get
even if, indeed, the Respondents were the weaker party…The Respondents do not
say which jurisdiction would be more preferable to them if they had been
allowed to exercise their free will in a better way,”
Wamala then scornfully
held: “I find this claim by the Respondent's escapist and unserious. This is
more so because this court is in a position to take judicial notice of the fact
that the persons behind the Respondents, particularly the third Plaintiff in
the amended plaint, are some of the most polished and astute business
personalities there are in Uganda. The Respondents were well and independently
advised by senior and prominent legal professionals in Uganda. Faced with such
facts, my view is that a feeble claim of duress and/or undue influence of the
nature as this one amounts to an insult of own intelligence on the part of the Respondents
and their advocates.”
In the final analysis,
Wamala held that the arbitration agreement was valid, operative,
and capable of being enforced. He wondered why the two
parties enter an agreement and when the time comes for its implementation, one
party tries to run to court to escape his responsibilities. With this ruling,
Wamala also refused to be drawn into the argument of whether Vantage had a legal
basis to sue or be sued in the first place because the agreement agreed upon itself forestalled the possibility that any dispute would end up in court.
“Under Section 5 of the ACA, upon such a
finding, I am obliged to refer the matter to arbitration which I accordingly
do. Upon doing so, the proceedings in HCCS No. 988 of 2019 accordingly lapse
together with any pending interlocutory proceedings thereunder and any orders
that may have been issued thereunder.”
Wamala ruled also
ordering that Bitature meets the costs of the application and of the
terminated proceedings in an earlier case before the same court over the
What is still not immediately
clear is how the High Court Civil division again entertained an issue of
the validity of the company yet it had been decided that the same court had no
power to open up the agreement that Bitature had signed with
Vantage. Efforts to speak to lawyers of both parties were
unsuccessful by press time. Robert Kirunda who represented Vantage in the cases
told us to get back to him in 30 minutes but when reached he neither picked up nor
returned our calls. For Fred Muwema, the lawyer for Bitature, our calls to his
known numbers went unanswered.