Overview:
The ruling is the latest setback for Springs International Hotel, a company under the Shumuk Group, in a long-running legal battle with the estate of the late businessman Bonney Mwebesa Katatumba over ownership and occupation of valuable commercial properties in the city.
KAMPALA — Two prime commercial properties in Kampala’s central business district owned by businessman Shukla Mukesh’s Shumuk Group are at risk of being auctioned after the High Court ordered one of the group’s companies to clear a Shs173.36 million judgment debt within 30 days.
The ruling is the latest setback for Springs International Hotel, a company under the Shumuk Group, in a long-running legal battle with the estate of the late businessman Bonney Mwebesa Katatumba over ownership and occupation of valuable commercial properties in the city.
In a ruling delivered by Assistant Registrar Samuel M. Kagoda Ntende of the High Court Land Division, court ordered Springs International Hotel to settle the decretal sum arising from Civil Suit No. 314 of 2018 within 30 days or face execution through the attachment and sale of Condominium Units 67 and 68 on Plot 2, Colville Street.
The execution proceedings were instituted by Angella Katatumba, Rugiirwa Katatumba, Charles Odere, Benson Tusasiirwe and Julius Turinawe after court found that the judgment debt had remained unpaid.
The targeted properties are located along Colville Street, one of Kampala’s busiest commercial corridors that hosts office blocks, banks, hotels and corporate headquarters.
The latest ruling adds another chapter to a dispute that has stretched for more than 15 years between companies linked to Mr Mukesh and the Katatumba family.
In December last year, the High Court ordered Mr Mukesh, Springs International Hotel, Shumuk Springs Development and another related company to pay about Shs14 billion in mesne profits after finding that they had wrongfully occupied part of the commercial property commonly known as Blacklines House, now Shumuk House.
The court also directed that transfers of ownership made in favour of Springs International Hotel be cancelled, ruling that ownership of the property remained with the Katatumba estate pending full implementation of the original sale agreement.
Hotel objects
Springs International Hotel had opposed the execution, arguing that the two condominium units were worth more than Shs1 billion, making their attachment excessive for recovery of a debt of Shs173.36 million.
The company also told court that the properties were already charged to financial institutions and therefore subject to registered mortgages.
Its lawyers further argued that execution should be halted because an appeal involving the same properties is still pending before the Court of Appeal.
Court dismisses objections
However, Assistant Registrar Kagoda rejected the objections, ruling that the absence of a valuation report at this stage was not sufficient to stop execution.
He observed that valuation is ordinarily undertaken during the auction process before any sale is conducted.
The court also ruled that mortgaged property is not automatically protected from attachment by judgment creditors.
Instead, what can be sold is the judgment debtor’s remaining proprietary interest in the property, while mortgage holders retain priority when proceeds from any eventual sale are distributed.
The registrar further held that filing an appeal does not automatically stop enforcement of a court decree unless a stay of execution has been granted by court.
The ruling reinforces the principle that successful litigants should not be denied the fruits of their judgments simply because an appeal has been lodged.
What happens next
Springs International Hotel now has 30 days to settle the Shs173.36 million judgment debt.
If the company fails to pay within the period, court bailiffs will proceed with attachment and sale of the two Colville Street condominium units in accordance with Uganda’s civil procedure rules.
The decision is likely to be closely watched within the business community because it underscores that companies cannot rely on pending appeals or existing mortgages alone to shield commercial property from court-ordered execution once judgment creditors move to enforce decrees.