Court lifts corporate veil, holds businessman liable for company’s debt

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The High Court in Kampala has ruled that Aya Investments Uganda Ltd proprietor, Mohammed Hamid, is liable for the company’s debts.

The decision allows businessman Jackson Ntwatwa to pursue Hamid’s personal assets to recover shillings 200 million in general and punitive damages, plus accrued interest and costs.

In a ruling delivered on October 27, 2025, Justice Simon Peter Kinobe of the Civil Division of the High Court held that Hamid’s conduct amounted to deliberate wrongdoing intended to shield assets from execution, warranting the lifting of the company’s corporate veil.

“The company’s corporate veil is lifted against Aya directors at the execution stage, but the applicant must show that efforts have been made to recover the money in execution,” Kinobe said.

The judge found that Aya Investments had been used by Hamid to obstruct execution through the deliberate transfer of assets in his [Hamid’s] name, hence frustrating enforcement of earlier court orders.

Court records show that Ntwatwa had sought to attach movable property, including motor vehicle of the company, to recover the decretal sums, but failed because the assets were registered in Hamid’s name.

Although Hamid was not originally a party to the execution proceedings, Justice Kinobe noted that the evidence demonstrated acts of fraud and abuse of corporate personality.

“All these points to deliberate acts of wrongdoing, contrary to Hamid’s claim that there is no overwhelming evidence of fraud or malfeasance perpetrated by the directors or members of Aya Investments,” the judge observed.

Background

Court documents show that the dispute arose in 2014, when Ntwatwa sued the Attorney General, Mohamed Hamid Latif, Watuwa Isongoni Mustafa and Aya Investments Uganda Ltd.

Subsequently, the court ordered Latif, Watuwa and Aya to jointly and severally pay Ntwatwa shillings 200 million in general damages, with interest at 15% per annum from the date of judgment until full payment, in addition to the costs of the suit.

However, the decree remained unsatisfied for years, prompting Ntwatwa to apply for the corporate veil to be lifted, paving the way for the latest ruling that exposes Hamid’s personal assets to attachment in case he does not pay the debt.