COURT | UTL | JUSTICE MUSOTA 

KAMPALA - The Court of Appeal has relieved Uganda Telecom Limited (UTL) of a heavy burden of paying over sh17.6b in legal fees. 

In 2013, the then Court of Appeal deputy registrar ordered UTL to pay sh17,699,618, 965 in legal fees. 

This was after UTL lost a suit to Bernard Mweteise, Asaph Ndaula, Attorney General and Uganda Communications Employees Contributory Pension Scheme. 

Mweteise and Ndaula represented 823 workmates. 

In a judgment dated December 22, 2021, Justice Stephen Musota reduced the legal fees to sh5.6b, noting that sh17.6b was excessive. 

“In the result, this reference is allowed to the extent that instruction fees were reduced to sh5.6b, inclusive of Value Added Tax (VAT),” Musota ruled. 

The judge noted that the subject matter was sh230,474,027,000, 5% instruction fees which would amount to sh17,699,618,965, inclusive of VAT, an amount he said out to be revised. 

Musota noted that the scheme represented over 800 employees and that the magnitude of work involved therein ought to be reimbursed. 

The judge was unhappy with the question of instruction fee and agreed with the submission of Dr Joseph Byamugisha that sh13m, based on sh75m being the value of the subject matter, is high. 

The judge said there is no laid down mathematical formula on which to base the calculation, but preferred 10% of the value of the subject matter. 

The judge found that the 5% awarded by the deputy registrar was in conformity with the principle of uniformity applied in taxation and hence not appropriate in the circumstances of this case. 

Background 

Uganda Telecom Limited (UTL) lost the case and the respondents were awarded costs of the appeal, which was consolidated with a civil appeal filed in 2014, in which Uganda Posts Limited was battling a similar matter with the respondents. Subsequently, Uganda Communications employees filed a bill of costs and the deputy registrar allowed it at sh17,699, 618,965.

Dissatisfied with the bill of cost, UTL appealed against the decision by a way of a reference before a judge, complaining that the deputy registrar applied wrong principles of taxation, thus occasioning a miscarriage of justice. 

The telecommunication company argued that the registrar erred in law and fact when she allowed a tax bill of costs which was manifestly excessive, thus occasioning a miscarriage of justice. UTL lawyers argued both grounds and submitted that the deputy registrar awarded a manifestly excessive instruction fee of sh14,999,211,886, saying there was nothing extraordinarily difficult that would warrant that amount. 

“Whereas the tax officer is given discretion in awarding costs, the principles to considering arriving at the reasonable amount for instruction fees must be applied judiciously and guided by precedent,” Counsel Nuhu Wandembere said. 

Meanwhile, lawyers representing Uganda communications employees stated that the subject matter of the appeals arose out of a claim for payment of pension entitlement computed in accordance with the Pension Act, which was in the ACTSERV report and verified list of UTL pension claimants. 

The lawyers explained that the subject matter as per the total costs of benefits as per the said report by ACTSERV is sh230, 474,027,000, as against UTL, inclusive of 18% interest on both general damages and pension.