Court of Appeal Halts High Court Arbitration Proceedings in Patrick Bitature Loan Dispute
In a ruling delivered by Justice Oscar Kihika, the appellate court paused the High Court’s handling of the matter until Simba Properties’ application for leave to appeal is determined. This decision effectively delays Vantage’s efforts to enforce a $10 million (Shs 36 billion) arbitral award in its favour.
The Court of Appeal has temporarily suspended proceedings in a High Court arbitration case involving Simba Properties Investment Company Ltd, owned by businessman Dr. Patrick Bitature, and South African-based Vantage Mezzanine Fund II Partnership.
In a ruling delivered by Justice Oscar Kihika, the appellate court paused the High Court’s handling of the matter until Simba Properties’ application for leave to appeal is determined. This decision effectively delays Vantage’s efforts to enforce a $10 million (Shs 36 billion) arbitral award in its favour.
The conflict traces back to a 2014 Mezzanine Term Facility Agreement, under which Vantage loaned Simba Properties $10 million. The loan was secured by corporate guarantees and mortgages on several prime properties owned by Simba.
When Simba defaulted on repayment, the dispute was referred to arbitration under the International Chamber of Commerce (ICC) in London. On July 31, 2023, the arbitrator ruled in favour of Vantage, paving the way for them to seek enforcement of the award in the High Court of Uganda.
On November 17, 2023, High Court judge Justice Thomas Ocaya issued interim orders preventing any transactions on the mortgaged properties or changes to Simba Properties’ shareholding until the enforcement application was concluded.
Dissatisfied, Simba Properties—alongside other applicants—filed Civil Application No. 1295 of 2023 seeking leave to appeal that ruling. They also requested a stay of the arbitration enforcement proceedings, arguing that their intended appeal raised genuine legal questions and that proceeding with enforcement could make their appeal pointless.
Simba claimed the arbitration enforcement process was “frivolous and vexatious” and initiated prematurely, causing them potential “serious prejudice.”
Vantage contested the application on several grounds, including:
The Court of Appeal allegedly lacked jurisdiction under the Arbitration and Conciliation Act (ACA), which limits judicial intervention in arbitration.
The application was an “abuse of court process.”
Simba’s Notice of Appeal was filed late, rendering it incompetent.
Justice Kihika dismissed Vantage’s objections, noting that Justice Ocaya’s ruling was made under the Civil Procedure Act (CPA), not the Arbitration and Conciliation Act. This distinction, he said, placed the matter within the jurisdiction of the Court of Appeal.
“This Court would have jurisdiction to determine this application given that it arises from proceedings that were determined under the CPA and not the ACA,” Justice Kihika held.
On the question of the Notice of Appeal’s validity, Kihika ruled that only a full bench of three justices could determine such a matter—not a single justice. He also brushed aside Vantage’s argument about citing the wrong legal provisions, saying it caused no prejudice or miscarriage of justice.
Crucially, the judge found that Simba had raised a valid legal question: whether interim measures could be granted after the conclusion of arbitration proceedings.
“This is an arguable point of law that is not frivolous,” Kihika noted. Although Kihika was not persuaded that Simba faced irreparable harm—since the dispute involved ascertainable monetary losses—he acknowledged that without a stay, the appeal could be rendered meaningless. “I am convinced that this is a proper case for the grant of a stay in order that the application for leave to appeal and therefore, the attendant right of appeal is not rendered nugatory,” he ruled.
The ruling puts Vantage’s enforcement plans on hold, buying Simba Properties more time to pursue its appeal. The case has drawn significant public interest, given the high-profile nature of the parties involved and the scale of the financial dispute.
The outcome of the pending application for leave to appeal will determine whether Simba Properties can challenge the High Court’s earlier orders and potentially influence how Uganda’s courts handle post-arbitration interim measures in the future.
