Bitature loses bid to block property auction

City businessman Patrick Bitature has lost a bid to block the auctioning of his four prime properties in an sh36.6b loan matter against Vantage Mezzanine Fund II Partnership, a South African entity.

Bitature’s companies; Simba Properties Investment Company Limited and Simba Telecom Limited had dragged Vantage’s lawyers and a court bailiff to court, seeking to stop them from selling its properties on grounds that the entity (Vantage) is non-existent.

They are lawyers Robert Kirunda, Noah Shamah Wasige, and court bailiff Festus Kateregga.

Also sued was the commissioner's land registration. The companies had argued that advertising its properties for sale by Vantage’s agents had tainted its names and business reputation.

On May 18, 2022, the individuals acting on the instructions of Vantage advertised Bitature’s properties in a local newspaper for sale by public auction.

The properties include Elizabeth Apartments at Kololo Gardens, Protea Hotel Naguru (Sky’s Hotel), Moyo Close Apartments, and Kololo Gardens, all located in Kampala City.

In his ruling, Commercial Court judge Stephen Mubiru dismissed the application, stating that the trio was not acting in their individual capacities but representing a known entity (Vantage) when they advertised Bitature’s properties for auction.

“A person who acts for a disclosed principal is not liable in respect of a particular transaction,” he said.

The judge stressed that suing advocates is an affront to the right to legal representation, adding that advocates should not be threatened with suits and prosecution for any action taken in accordance with their recognized professional duties.

Arbitration 

The court heard that Bitature and Vantage are undergoing an arbitration process in London over a $10m (sh36.6b) loan, which the South Africa-based firm extended to Bitature in 2014.

Citing Section 6(1) of The Arbitration and Conciliation Act, the judge observed that Simba Group of Companies could have sought interim protective measures to preserve the parties’ legal rights, pending arbitration.

“The court must grant a stay of any proceedings brought before it regarding a dispute that is subject to arbitration unless the agreement is null and void or incapable of being performed,” Mubiru stated.

He declined to exercise jurisdiction over the matter, saying it is a subject of arbitration. In his ruling dated June 16, 2021, Justice Boniface Wamala vacated all court orders that had been issued in the matter and directed the parties to go for arbitration.

“Having found that the impugned arbitration agreement exists, is valid, operative, and capable of being performed and that there is an arbitrable dispute between the parties herein, it is ordered that this matter be and is accordingly referred to arbitration in accordance with Section 5 of the Arbitration and Conciliation Act,” the judge ruled.

Bitature’s argument 

But Bitature on his part argued that he was equally shocked when Vantage filed an application seeking to initiate criminal proceedings against him, yet the matter was still under arbitration as directed by the court.

About eight years after Vantage gave Bitature the $10m loan, the company is now reportedly demanding over $38m (sh139b), which Bitature said amounts to a 40% interest on the initial loan, which according to him was abnormal.

“Like every other business, we were also affected by the COVID-19 pandemic and all our businesses were closed. Therefore, we welcomed the arbitration to find a middle ground,” he stated.

Mubiru, however, observed that Simba Group of Companies in previous and current litigation over the same matter as well as their response to the invitation to arbitration, are laboring under an honest and mistaken belief that the case was decided by Justice Musa Ssekaana.