KAMPALA, Uganda — The Court of Appeal has ruled in favor of a South African investment fund in its long-running dispute with prominent Ugandan businessman Patrick Bitature, clearing the way for the fund to enforce a $10 million loan without being required to register locally.
The unanimous decision by a three-judge panel overturns a lower court’s ruling and is being seen as a major boost for foreign investment in Uganda.
Justice Esta Nambayo, delivering the lead judgment, said the mere act of lending money without a physical address in Uganda does not obligate a foreign lender to register under local law. She said the fund, Vantage Mezzanine Fund II Partnership, has the right to enforce its loan agreement, including suing in Ugandan courts.
“Locking out the appellant from accessing courts would amount to unequal legal protection,” Nambayo said.
The dispute dates to December 2014, when Vantage, one of Africa’s largest mezzanine debt funds, advanced $10 million (about 37 billion Ugandan shillings at the time) to Simba Properties Investment Co. Ltd., part of Bitature’s Simba Group.
The loan was intended to support Simba’s expansion in real estate and hospitality. When the companies defaulted on repayment, they filed a series of suits in an effort to block recovery. A lower court later dismissed those cases and ordered arbitration.
Vantage then sought to enforce the loan agreement by transferring shares in Simba’s subsidiary companies, but the Uganda Registration Services Bureau declined, arguing the fund was not registered in Uganda. In 2022, a High Court justice upheld that position, finding that Vantage lacked the legal standing to sue.
The Court of Appeal rejected that reasoning, with Justice Fredrick Egonda-Ntende stating that the registration laws cited by the High Court did not address the capacity to sue.
The court also ordered the Simba companies and the Uganda Registration Services Bureau to pay Vantage’s costs in the High Court and on appeal.
Bitature, a well-known businessman in Uganda, has previously said the economic fallout from the COVID-19 pandemic, particularly lockdowns and travel restrictions, crippled cash flow and prevented his businesses from meeting their repayment obligations on schedule.
He has said his businesses were not insolvent but needed more time to recover.
Analysts said the ruling sends a strong signal to international financiers that Ugandan courts will uphold contractual rights.
