Businessman Patrick Bitature has been given temporary reprieve after the Court of Appeal issued an injunction blocking Vantage Mezzanine Fund, a South Africa-based lender, from selling his prime properties in Kampala to recover a loan.
Justice Christopher Gashirabake on Monday, June 27, 2022, ruled that the businessman through his lawyers of Muwema and Company Advocates has proved that his properties, among them Protea Hotel (Skyz’s Hotel) in Naguru, are facing a threat of sale.
“There is all evidence that there is a real threat of sale/disposal of the property before determination of the main arguments of jurisdiction of this court can be determined. For this reason, I grant the protective order sought,” Justice Gashirabake ruled.
Mr Bitature, who is the chairperson of Simba Group of Companies, went to the appellate court after the Commercial Division of the High Court dismissed his application in which he had sought to stop the advertisement and auctioning of his properties.
Mr Bitature had sought a temporary injunction against lawyers Robert Kirunda, Wasige and bailiff Katerega from selling off their properties in a bid to recover the loan until the final disposal of the pending courts cases.
Vantage says it lent Mr Bitature and his various companies $10 million in 2014 of which he has “not paid back one cent” despite the loan term ending in 2019. The lenders say the loan to Mr Bitature’s companies has now ballooned to $32 million after accrued and compounded interest, and penalties, kicked in.
But the judge yesterday ruled that, “any further form of threat of sale or dealing in the advertised property is hereby stayed until the determination of the application of interim orders of stay.”
Justice Gashirabake question the lawyers’ decision to advertise the businessman’s properties if there wasn’t any threat or imminent danger to them.
“Why would the advert in the Daily Monitor have been placed in the newspapers? The advert has not been withdrawn. Is any prudent person supposed to ignore the advert? The answer is a resounding NO. Would anyone rely on the advert to buy the property? Yes,” he said.
The affected properties include; Elizabeth apartments in Kololo, Protea Hotel (Skyz’s Hotel) in Naguru, Moyo Close apartments and Kololo gardens in Kampala.
Vantage’s lawyers had argued that the intended advertisement was to cause the sale of the properties owned by Bitature to recover the money that Vantage is demanding.
But Mr Bitature’s lawyers claimed that Vantage was non-existent and yet by the lawyers and bailiff advertising the said properties, have not only occasioned severe damage to their names and business reputation but have also caused or continue to cause irreparable damage to them.
Justice Gashirabake yesterday said Mr Bitature’s “application is not meant to stop or interfere with the ongoing arbitration, which has to continue, but to protect the property of the subject of the arbitration until the arbitration is concluded.”
The ruling means that Vantage cannot advertise and sell Mr Bitature’s properties to recover the loan until the matter is concluded by arbitration.
Here is the ful ruling:
THE REPUBLIC OF UGANDA
IN THE COURT OF APPEAL OF UGANDA AT KAMPALA
CIVIL APPLICATION NO. 538 OF 2022
ARISING OUT OF CIVIL APPLICATION No. 537 OF 2022
ARISING OUT OF CIVIL APPEAL NO 2022
ARISING OUT OF HCMA No. 671 OF 2022 AND HCCS NO. 0424 OF 2022
SIMBA PROPERTIES INVESTMENT CO. LTD APPLICANTS
SIMBA TELECOM LTD vs
ROBERT KIRUNDA & NOAH SHAMAH WASIGE trading as M/S KIRUNDA & WASIGE ADVOCATES RESPONDENTS
FESTUS KATEREGGA trading as Quick way Auctioneers & Court Bailiffs
COMMISSIONER LAND REGISTRATION
When Civil Application NO. 538 of 2022 came up for hearing, Mr. Fred Muwema, Friday Roberts Kagoro and C. K Nsubuga appeared for the applicants and Mr. S. Tendo Kabenge, Robert Kirunda and Kasabiti Diana appeared for the Respondents.
Mr. Fred Muwema applied for a Protective Order, stating that there is an imminent threat of sale of the applicant’s properties comprised in;
LRV 3895 Folio 4 Plot 3 Water Land Naguru Kampala,
0 LRV 3435 Folio 10 Water Land Plot 12 Naguru Kampala and
LRV 4294 Folio 20 Plot 12 Moyo close.
LRV 3903 Folio 13 Plot 32 Elizabeth Avenue Kololo
LRV 3891 Folio 18 Plot 1 Water Lane Naguru Kampala
LRV 3895 Folio 3 Plot 5 Water Lane Naguru Kampala
The properties were advertised for sale by the respondents as Agents of Vantage Mezzanine Fund Limited, Vantage Mezzanine Fund Il Partnership and Derek Alexander Il Director, Vantage Mezzanine Fund Il proprietary Limited.
Mr. S.T Kabenge and Mr. Robert Kirunda objected to the application on ground that no threat of sale of the property was impending as alleged by the applicants. That the sale which should have taken place on the 18th June 2022 never took place and no such sale is contemplated.
Further that the application was improperly before this Court as the parties were in arbitration and therefore this Court lacked jurisdiction as per Section 9 of the Arbitration and Conciliation Act.
That the Mortgagees were not parties to the suit and their Agents (Robert
Kirunda and Noah Sharnmah Wasige Trading as Ms Kirunda & Wasige & Advocates), Festus Kateregga trading as Quick way Auctioneers and Court bailiffs) were not the right parties in this application.
Counsel for the applicants submitted that before the lapse of 30 days after the advertisement for sale, the property is still available for sale and therefore the threat is still there.
Counsel for the respondents vehemently refuted this submission.
Counsel for the applicants prayed that the protective order be given under the provisions of the Rules of this Court particularly Rule 2(2) of the Judicature (Court of Appeal) Rules) Directions, SI 13-10 to preserve the status quo.
After carefully listening to the submissions of both counsel, I am convinced that Rule 2(2) of the Judicature (Court of appeal Rules) Directions SI 13-10 empowers this Court to make orders of Court where it is evident that there is a threat or eminent danger, of the sale of the property.
There is a copy of the advert in Daily monitor of Wednesday, May 18, 2022, attached as annexure B to the application. If indeed as the counsel for the respondents submitted that there is no threat or imminent danger of sale of the property, why would the advert in the Daily monitor have been placed in the newspapers? The advert has not been withdrawn. Is a prudent person supposed to ignore the advert? The answer is a resounding No!!. Would anyone rely on the advert to offer to buy the property. Yes!!
I am alive to the provisions of S. 9 of the Arbitration and Conciliation Act and submission that this Court has no jurisdiction in this case.
The application is not meant to stop or interfere with the ongoing arbitration, which has to continue, but to protect the property the subject of the arbitration until the arbitration is concluded.
Having addressed myself to the above as I have done, there is all evidence that there is a real threat of sale/ disposal of the property before determination of the main arguments of jurisdiction of this Court can be determined.
For this reason, I grant the Protective Order sought.
Any further form of threat of sale or dealing in the advertised property is hereby stayed until the determination of the application of interim order of stay.
I order accordingly. I give no order as to costs.
Dated at Kampala this…….day of…2022.
Justice of Appeal