AYA Investment Uganda has been given an ultimatum of 30 days to save their 5 Star Hotel, the Pearl of Africa which has been set for sale by public auction. The Hotel Limited located at Nakasero Hill Road Kampala
In a public notice on Monday, September 26, Armstrong Limited, government Court Bailiffs, auctioneers, and debt collectors on orders of M/S MMAKS Advocates and ENSafrica Advocates representing undisclosed Industrial Development Corporation of South Africa Ltd have put Pearl of Africa Hotel up for auction over a Shs611 billion debt it owes to a South African firm.
Pearl of Africa Hotel comprises LRV 3556 Folio 8 Plots 7A1-9A1 & 10 Lugard Road, and Plots M32, M183 & 2E Nakasero Hill Road Kampala measuring approximately 5.975 Hectares.
“Upon instructions from the High Court of Uganda (Commercial Division) in Execution Misc. Application No. 275 of 2023 (arising from Arbitration Cause No. 12 of 2021 and High Court Misc. Cause No. 58 of 2021) Industrial Development Corporation of South Africa Ltd (Judgment Creditor) vs AYA Investments (U) Limited (Judgment Debtor), and M/S MMAKS Advocates and ENSafrica Advocates, Counsel for the Judgment Creditor, we shall proceed to sell the Property below together with all developments thereon by public auction pursuant to a Warrant of Attachment and Sale issued by the High Court of Uganda (Commercial Division) unless the Judgment Debtor pays to us the entire outstanding decretal sum (including interest) and our fees and costs before the fall of the hammer at the auction,” auctioneers said in an advertisement on Monday.
The Pearl of Hotel spans 32,000 square meters and comprises 23 floors, 296 rooms, 37 suites, two restaurants, three bars, nine meeting rooms, 15th-floor executive lounges, and a business center with all top-class 5-star amenities.
The sale by public auction comes after the Court of Appeal in Kampala directed AYA Investment Uganda to pay Shs611 billion debt it owes to the Industrial Development Corporation (IDC), a South African firm.
In its ruling, the Court of Appeal directed that the struggling businessman cannot appeal the decision, reasoning that courts of law cannot meddle in lawful arbitration processes.
The ruling means that Aya Investment Limited is restricted from appealing to any higher Court in the matter where the commercial endorsed the payment of Shs611 billion arbitral award to IDC of South Africa Limited.
The Bruce Collins QC Tribunal of South Africa on September 11, 2021, ordered Aya to pay the amount to IDC as an arbitral award. It comprises a Shs305 billion unpaid principal sum that the South African firm passed to the Ugandan businessman 10 years ago according to available documents.
Documents on the court record show that the IDC had applied to the Commercial Court to have the award registered as a decree of the High Court in Uganda. The development was allowed by Justice Stephen Mubiru, locking the Ugandan businessman in the dispute with the South African company.
The latest court ruling inflicted a fresh setback on the Ugandan tycoon after the Court of Appeal dismissed an application in which he sought to block the payment of the arbitral award.
In his ruling, Justice Christopher Gashirabake dismissed the application, reasoning that the Arbitration and Conciliation Act limits the intervention of courts in matters of arbitration.
“Having found that this court has limited jurisdiction to intervene in arbitral awards, which has an effect on the likelihood of the success of the appeal, the preliminary objection is upheld. The application to stay execution is not granted,” Justice Gashirabake ruled.
The judge added: “Where the jurisdiction of the court is questionable, it casts doubt on the possibility of the success of the intended appeal. Lack of jurisdiction is lack of everything”.
According to the judge, section 34 of the Arbitration and Conciliation Act provides that recourse to the Court against an arbitral award can only be by way of an application for setting aside the award.