UGANDA, Kampala | Real Muloodi News | The Commercial Division of the High Court has directed the government to reinstate land titles for OpecPrime Properties Limited in connection with the Nakawa-Naguru Satellite City project and awarded USh1 billion in damages. This ruling, delivered on January 20, 2025, followed a breach of the 2021 settlement agreement between OpecPrime and the government.
Justice Harriet Grace Magala ruled that the government’s failure to honour its obligations under the settlement agreement, including reallocating the disputed land to third parties, constituted a breach of contract.
“The Defendant failed to perform its obligations as per the Settlement Agreement, and this constitutes a breach of contract,” Justice Magala stated in her ruling.
Court’s Orders and Compensation
The court ordered the immediate reinstatement of property titles to OpecPrime Properties Limited and mandated proper registration under their ownership. A permanent injunction was issued to prevent further interference with the land, safeguarding the developer’s rights.
OpecPrime was also awarded USh800 million in general damages to compensate for financial losses caused by the breach. Additionally, USh200 million was granted in punitive damages, signalling the court’s disapproval of the government’s actions.
“Punitive damages are awarded where a breach involves a tort,” Justice Magala explained, emphasising the seriousness of the government’s conduct.
Background of the Case
The case originated from a 2007 public-private partnership between OpecPrime and the government to develop the Nakawa-Naguru Satellite City. Disputes over the project led to legal action, including Miscellaneous Cause No. 41 of 2018, to prevent interference with the land.
In September 2021, a settlement agreement was signed to resolve these disputes and restore the land titles to OpecPrime. Despite the agreement, the government allegedly failed to comply, prompting further legal action.
During a court-ordered site visit on May 17, 2024, evidence revealed that plots designated for OpecPrime were either occupied by third parties or lacked proper title deeds.
The Uganda Land Commission, acting under the Attorney General’s directives, had allocated portions of the contested land to other developers, including Karim Somani and Roko Construction Ltd, without OpecPrime’s consent or legal transfer of titles.
OpecPrime’s Position
Through their lawyers, Elison Karuhanga and Bonny Kolokolo of Kampala Associated Advocates, OpecPrime argued that they had possession of some properties, including townhouses and villas across the Nakawa-Naguru area, but lacked title deeds for the land specified in the settlement agreement.
“The plan was to develop the area into rental homes as specified under Schedule A, but the Defendant’s actions rendered this impossible,” said OpecPrime Director Hassan Kimbugwe.
Government’s Defense and Court’s Response
The Attorney General, represented by Samuel Tusubira, contested the jurisdiction of the Commercial Division, arguing that the case belonged in the Land Division. The court dismissed this argument, asserting that the matter pertained to a breach of contract, which falls under the Commercial Division’s jurisdiction.
“The Settlement Agreement arose out of a Public-Private Partnership Agreement, which is commercial in nature,” Justice Magala clarified.
The court also criticised the Attorney General’s written defence for being evasive and non-compliant. “Pleadings must address the substance of the claims,” the judge emphasised.
The breach of contract and subsequent delays have significantly impacted the Nakawa-Naguru Satellite City project, a key initiative for Uganda’s urban development.
The court highlighted the broader implications of the government’s failure to honour its agreements, warning that such actions undermine public-private partnerships and investor confidence.
“The failure to reinstate the titles and comply with contractual obligations has far-reaching consequences, not just for the plaintiffs but for future partnerships that depend on the integrity of agreements with the government,” Justice Magala remarked.
As of January 24, 2025, the land had already shown signs of activity, with shrubs cleared in preparation for development.
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