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UMSC Fails to Stop Sale of Properties over Shs19b Debt at Court of Appeal

By Our Reporter

 

NATIONAL

 

In a ruling delivered Wednesday morning, Justice Christopher Gashirabake, who sat as single judge of the Court of Appeal, held that the balance of convenience is to allow businessman Justus Kyabahwa to sell off the eight prime properties to recover his money.

 

The Court of Appeal in Kampala has allowed businessman Justus Kyabahwa to proceed with the sale of properties belonging to the Uganda Muslim Supreme Council to recover 18.9 billion Shillings.

 

 

Justice Christopher Gashirabake on Wednesday dismissed with costs an application in which UMSC wanted a stay of execution of warrant in which Kyabahwa was given permission to attach nine properties and recover his money which has been accumulating since 2020.

 

 

“Clearly, the balance of convenience would be in not granting this application for stay of execution but to allow the party with the judgment in hand to proceed with the execution process”, ruled Gashirabake.

 

It all started on June 24th, 2020, when UMSC sold its Sembabule Ranch land measuring 517 hectares to Kyabahwa through Arthur Kayanja. According to the sale agreement Uganda Radio Network has seen, the land was sold at 3.584 billion shillings.

 

 

The agreement states that UMSC; which was represented by its Secretary General Ramathan Mugalu, Mufti Shaban Ramatha Mubajje, and chairman Abdulkadir Idi Balonde, was to hand over the possession of the land not later than 60 days after the sale agreement was signed. UMSC also agreed to pay any arrears in respect of rates, levies, and charges, incurred in respect of the land before the agreement was signed.

 

 

According to the agreement, if the buyer fails to get possession of the land within 150 days from the date of the execution of the agreement for any reason not being his default, UMSC would refund all the money that has been paid to it together with interest of 12% per month.

 

 

The agreement also stated that UMSC was in a period of 60 days supposed to remove the caveat filed on the title to the land by Enterprise Handling Services Limited -ENHAS, the company that had a 15-year lease that was running up to 2028. The agreement also states that before the transaction kicked off it had been authorized by all the relevant organs of UMSC.

 

The agreement also states that all disputes arising out of the transaction shall be resolved through court but after exhausting arbitration in accordance with Arbitration and Conciliation. As a result, Kyabahwa after failing to get his money in three months after finding that the land was sold to ENHAS, petitioned the commercial court seeking to recover 18.9 billion shillings which had now accumulated in a period of about four years.

 

Consequently, his petition was allowed on August 7th, 2023 and the defense of UMSC was rejected after evaluation of the evidence on the court record including the agreement by both parties.

On November 16th, the Registrar issued a warrant of execution allowing Kyabahwa to sell nine properties including Gadafi Mosque in Old Kampala so as to recover his money.  But dissatisfied with the decision, UMSC appealed in the Court of Appeal and also filed an application for a stay of execution.

 

 

Their Deputy Secretary General in Charge of Finance and Administration Muhammad Ali Aluma, argued that Kyabahwa sued them in the High Court but they asked for unconditional leave to appear and defend the suit. However, they were unsuccessful as the High Court on August 7th, 2023 dismissed their application, and judgment was entered in favor of Kyabahwa.

 

 

UMSC said, they had filed an appeal and asked for a stay of execution for the attachment and sale of its various properties.

 

 

The UMSC argued that it will suffer irreparable loss once execution is allowed to proceed because its property shall be sold. They said the right of appeal will be crippled, rendered nugatory, and academic if the application is not granted.

 

 

However, Kyabahwa through his lawyer Ahmed Kalule Mukasa opposed the application saying that they will not suffer any harm and they have not demonstrated how they shall suffer harm which can’t be atoned by an award of damages. He said the execution against the properties proposed has no bearing on the existence of the Islamic faith and the claims in respect thereof by the UMSC are preposterous.

 

Kalule asked the court to dismiss the application for a stay of execution by the UMSC.

 

Justice Gashirabake ruled that UMSC has not brought sufficient evidence that it will suffer harm that cannot be atoned by an award of damages.

 

“Indeed all the applicant has done is to urge the court that if execution proceeds, it may never be able to recover its properties from third parties. In my view, recovery of a property sold in execution of a severe and atonement of damage that may arise thereby, are two different things”, said Gashirabake.

 

He added that it is possible that a judgment -debtor whose property is sold in execution of a decree may never be able to recover the same, yet any damage that may be suffered and therefore it can be atoned by an award of damages.  As such, he said the fear of loss of property as a consequence of execution does not mean that UMSC shall suffer harm that cannot be adequately compensated in damages.

 

“Furthermore, I accept the respondent/Kyabahwa that where the judgment creditor’s quest in execution is the enforcement of a purely monetary claim, a sum of money adjudged as owing to the Respondent or judgment creditor, there is no special quality attached to such a claim”, said Gashirabake.

 

He added that he has not found any harm, damage, or irreparable loss that will be suffered and that the appeal has no chance of succeeding.

 

“I also agree as submitted by the Counsel of the respondent that all points proposed to be taken on appeal are peripheral to the central or substantive question in this dispute. The applicant’s obligation to pay the respondent money to due to home in accordance with the agreement of the parties”, said Gashirabake.

 

He added “I did not see anywhere in the proposed grounds of appeal where the applicant proposes to contest this obligation in this court. I think as a matter of substantive justice, it is wrong for the applicant/to invest itself in red herrings rather than attend to the substance of the dispute”.

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