Business
Court blocks sh8b payment of city lawyer
Publish Date: Jul 14, 2014
Court blocks sh8b payment of city lawyer
Fred Muwema a senior partner at Muwema and Mugerwa Advocates and Solicitors had claimed 16% of the sh56bn as remuneration for representing the oil companies, in addition to costs.
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By Vision Reporter

THE Supreme Court has blocked payment of sh8.9b to a city law firm which wanted to share from the sh56b excise tax refund URA is to give to 10 fuel companies.

Muwema and Mugerwa Advocates and Solicitors had claimed 16% of the sh56bn as remuneration for representing the oil companies, in addition to costs.

Fred Muwema and Kiggundu Mugerwa are the senior partners in the firm.

The Supreme Court ruled the claim illegal and ordered Muwema’s firm to pay costs to the lawyers of the aggrieved oil companies in all the courts the remuneration dispute has been.

The same ruling also dashed the bid by Uganda Revenue Authority (URA) to avoid paying back the wrongly collected taxes to the fuel companies.

The five justices unanimously upheld two High Court rulings on the sh56b tax money and the sh8.9b claim.

Their ruling quashed the one of the Court of Appeal that had faulted the High Court on Muwema’s claim and had ordered the remuneration suit back to the Commercial Court for handling by a fresh judge.

The Justices are Bert Katureebe, Benjamin Odoki, Wilson Tsekooko, Galdino Okello and Christine Kitumba.

The fuel companies ran to the Supreme Court saying Muwema’s sh8.9b remuneration agreement was done with Rock Petroleum behind their back.

The tax, court costs and lawyer remuneration saga started when 10 oil companies dragged URA to court, seeking to recover the excise duty monies. Rock Petroleum engaged Muwema’s firm to sue URA on behalf of all 10.

The other oil companies are Shell, Kobil, Gapco, MGS International, Delta Petroleum, Fuelex, City Oil, Hass Petroluem, Nile Energy and Petrolink. 

Justice Lamek Mukasa in the Commercial Court then ordered URA to pay back over sh56b to the fuel companies.

However, unknown to the other companies in the suit, before the ruling, Muwema had entered another agreement with Rock Petroleum for remuneration.

According to the agreement, he would be paid costs plus 16% of the proceedings from the case. If the case was prolonged by appeals, he would earn another 4%.

The remuneration agreement came to light when Muwema sought to get the sh8.9b from URA and sued the tax body when it opposed it.

The other fuel companies also returned to court challenging the remuneration agreement. 

A court registrar heard both Muwema’s application against URA and the fuel companies’ application against Muwema and Rock on the same day.

She, however, only gave a ruling in Muwema’s case, ordering URA to pay the sh8.9bn.

Days later, she said the oil companies’ application against Muwema had been overtaken by events.

The fuel companies appealed to the High Court, and Justice Irene Mulyagonja handled the case.

However, Muwema tried to block Mulyagonja from handling the case, saying she was biased.

The tiff with Mulyagonja was sparked off when the judge informed Muwema of a complaint lodged by Tumusiime, Kabega and Company Advocates against the registrar over the matter.

Mulyagonja said she would meet the concerned parties that afternoon. Muwema, according to the court records, became angry and complained that the Kabega lawyers were trying to block his pay.

When the judge said she would give an interim order staying execution until the matter was settled, Muwema accused the judge of siding with Tumusiime and Kabega. He appealed to the Court of Appeal.

He and his colleagues also filed a complaint against Mulyagonja before the Principal Judge, saying she had a personal interest in the matter, which was the reason she issued the interim order.

The Supreme Court noted that at some point during the submissions, the application degenerated into a personal affront with Muwema, treating the judge ‘like a criminal or witness under cross examination’.

Referring to the applications in the lower court, the Supreme Court said there was “abuse of court process by some judicial officers and advocates.”

“It is such abuse of the court process that has delayed justice,” the court noted. 

Judgment: Shell vs Muwema & Mugerwa by The New Vision

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