The Court of Appeal has ruled in favour of South Africa’s Vantage Mezzanine Fund II Partnership in its high-profile dispute with businessman Patrick Bitature’s Simba Group, clearing the way for the fund to enforce a $10 million loan agreement without being required to register locally under Ugandan partnership laws.
The ruling reverses earlier decisions that had blocked the enforcement of the loan on the grounds that Vantage lacked legal presence in Uganda. The case, which has dragged on for nearly a decade, has been closely watched in business and investment circles for its implications on cross-border financing.
The dispute began in December 2014 when Vantage, one of Africa’s largest mezzanine debt funds, advanced $10 million (about Shs37 billion at the time) to Simba Properties Investment Company Ltd as growth capital to support expansion in real estate and hospitality. Charges were created over Simba Telecom Ltd, Linda Properties Ltd, and Elgon Terrace Hotel Ltd, with share transfer documents signed in favour of the lender as security.
When Simba defaulted, the companies filed multiple suits in the Commercial Division to resist enforcement, but those were dismissed in June 2021 and arbitration ordered. Vantage later moved to enforce the share transfers through the Uganda Registration Services Bureau (URSB). The Bureau, however, rejected the request, arguing that Vantage was not registered to operate in Uganda.
In 2022, High Court Judge Musa Ssekaana upheld URSB’s position, holding that the fund lacked legal standing in Uganda. That ruling has now been unanimously overturned by the Court of Appeal.
Delivering the lead judgment, Justice Esta Nambayo held that lending money to a Ugandan company does not amount to “carrying on business” in Uganda and therefore does not require registration under the Partnership Act or the Business Names Registration Act.
“The mere act of lending money without a physical address in Uganda does not create an obligation for the appellant as a foreign lender to register. The appellant has a right to implement the terms of the agreement in Uganda, including instituting proceedings in court for the enforcement of its rights,” Justice Nambayo ruled.
She further warned that barring Vantage from seeking redress would amount to discrimination: “Locking out the appellant from accessing courts would amount to unequal legal protection by the courts, which would contravene Article 21(1) of the 1995 Constitution of Uganda.”
Justice Fredrick Egonda-Ntende, concurring, said, “Neither the Partnership Act nor the Business Names Registration Act deal with capacity to sue or locus standi at all. There was no basis in law for the conclusion that the appellant did not have capacity to sue.”
The Court also faulted the High Court for allowing Simba companies private entities to join judicial review proceedings which were strictly intended to compel URSB, a public body, to perform a statutory duty. As a result, the Court of Appeal set aside the High Court ruling, affirmed Vantage’s right to sue, and ordered both URSB and the Simba companies to pay costs in the High Court and on appeal.
Patrick Bitature, one of Uganda’s most prominent businessmen has long defended his stance in the dispute, blaming the COVID-19 pandemic for crippling his companies’ cash flows. He argued that lockdowns and travel restrictions severely disrupted revenues in hospitality and real estate, leaving Simba unable to meet obligations on schedule.
In public remarks, Bitature has also portrayed the standoff as a test of how Uganda treats local entrepreneurs in disputes with foreign financiers.
The Court of Appeal ruling is being hailed as a major boost for foreign direct investment and cross-border commercial lending. By confirming that foreign lenders can enforce contracts without local registration, the judgment strengthens Uganda’s reputation as a credible destination for private equity and mezzanine financing.
“This case sends a strong signal to international financiers that Uganda’s courts will uphold contractual rights fairly, even against politically connected or high-profile business figures,” a Kampala corporate lawyer observed.
Analysts argue the decision could encourage more regional and international funds to enter Uganda’s market, potentially lowering borrowing costs for corporates and improving investor confidence in the judiciary.
For Bitature, however, the verdict is a heavy blow at a time when his business empire is still recovering from the aftershocks of the pandemic. While the judgment clears Vantage to enforce its $10 million loan, it also underscores the difficult reality faced by many local firms that took on international financing before COVID-19 struck.
