High Court blocks eviction of Mukono mattress manufacturer
The order will remain in force pending the conclusion of arbitration proceedings before sole arbitrator Dr Robert Kirunda, or any other tribunal properly constituted under the parties' agreement.
The company, which operates SIIA Foam mattresses, occupies the premises at Plot 216, Block 191, opposite Seeta High School along Jinja Highway, Mbalala, Mukono. (File photo)
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The High Court Commercial Division has restrained the owner of an industrial property in Mukono from evicting SIIA Global Impex Limited, which operates a mattress manufacturing plant on the premises.
Justice Susan Odongo issued an interim protection order restraining Dharani Farida Raj, her agents, servants, employees, assignees and anyone acting under her authority from interfering with SIIA Global Impex's rights under a five-year tenancy agreement signed on February 21, 2025.
The order will remain in force pending the conclusion of arbitration proceedings before sole arbitrator Dr Robert Kirunda, or any other tribunal properly constituted under the parties' agreement.
The dispute arose after SIIA Global Impex invoked a clause in the tenancy agreement giving it an absolute right to purchase the property for $450,000 within the first three years of the tenancy.
The company, which operates SIIA Foam mattresses, occupies the premises at Plot 216, Block 191, opposite Seeta High School along Jinja Highway, Mbalala, Mukono.
According to the court record, the company issued a notice on February 17, 2026, exercising its option to purchase the property.
However, Raj rejected the offer and subsequently terminated the tenancy agreement, demanding that the company vacate the premises within 14 days.
The company then commenced arbitration proceedings after serving a Notice of Arbitration on March 12, 2026, prompting it to seek interim protection from the High Court to preserve the status quo.
SIIA Global Impex told the court that it had invested about $250,000 in structural renovations, NEMA environmental clearances and operational infrastructure in reliance on the long-term tenancy and its contractual right to purchase the property.
The company further argued that it had established a mattress manufacturing plant, storage and distribution facilities on the premises and employed about 30 full-time workers.
It contended that eviction would disrupt its operations, result in significant relocation costs and cause losses that could not be adequately compensated by damages.
She argued that the estate had not been distributed among the beneficiaries, including her three daughters, and that she was therefore duty-bound to distribute the property to the rightful heirs before any sale could be considered.
Raj also argued that the arbitration proceedings had terminated after the parties failed to meet the deadline for payment of the arbitrator's professional fees.
She further challenged SIIA Global Impex's claim that it was operating a manufacturing plant on the premises, saying the company had not provided a manufacturing licence, identified the brand of mattresses or disclosed the plant's production capacity.
She also disputed the alleged $250,000 investment, arguing that the company had not provided supporting evidence such as tax receipts, NEMA licences or proof that the renovations had been authorised.
Raj urged the court to dismiss the application, arguing that the dispute was essentially a landlord and tenant matter and therefore did not fall within the jurisdiction of the Commercial Division.
However, Justice Odongo dismissed the preliminary objections, holding that the dispute involved substantive commercial transactions arising from the purchase option and the alleged industrial investment.
The judge also rejected the argument that the arbitration proceedings had terminated because of the dispute over payment of fees.
She held that the applicant had served a Notice of Arbitration on March 12, 2026, and that the sole arbitrator had already held a preliminary meeting.
The judge noted that SIIA Global Impex had also offered to meet the full cost of the arbitration to ensure that the process continued.
Justice Odongo said the existence of a valid arbitration agreement and a dispute between the parties was sufficient to trigger the court's jurisdiction to grant interim protection under Section 6(1) of the Arbitration and Conciliation Act.
She observed that the parties' tenancy agreement expressly provided that disputes arising from or connected to the agreement would first be resolved amicably and, if unresolved, referred to arbitration.
The judge said the court was not determining the ultimate merits of the dispute but was merely preserving the status quo to ensure that the arbitration process was not rendered nugatory.
Justice Odongo found that the company had demonstrated the existence of a valid arbitration agreement and a substantive dispute concerning its right to purchase the property.
She said the dispute over Raj's capacity to execute the agreement was itself a substantive issue to be determined through arbitration.
The judge further held that the company was likely to suffer irreparable injury if evicted before the arbitration was concluded.
She noted that the company operated an industrial manufacturing plant on the premises and employed about 30 full-time workers.
"An eviction would necessitate a total cessation of these manufacturing activities, leading to a permanent loss of market presence, the destruction of established supply chains, and the displacement of dozens of employees," the judge said.
Justice Odongo also found that the company's alleged $250,000 investment and its contractual right to purchase the property raised concerns that could not be adequately addressed by monetary compensation alone.
The judge held that the balance of convenience favoured SIIA Global Impex because its entire industrial operation was at stake.
The judge said the order was necessary to preserve the subject matter of the dispute until the arbitrator could make a final determination.
"If the Applicant is evicted from Plot 216 before the arbitrator can determine the validity of the purchase option under Clause 5 of the Rental Agreement, any subsequent arbitral award in favour of the Applicant would be a hollow victory," Justice Odongo held.
The court consequently restrained Raj from interfering with SIIA Global Impex's rights under the February 21, 2025, tenancy agreement and from evicting the company from the Mukono premises.
The court ordered that the interim protection remain in force until the conclusion of the arbitration proceedings.
Costs of the application were ordered to abide by the outcome of the arbitration.