Peter Kamya- the troubled former Simbamanyo House owner, in more trouble as court, sentences him to pay over UGX2.9 bn over a messed-up land sale Peter Kamya who has recently lost three court cases related to his bid to reposses two properties foreclosed by Equity Bank is further trouble following the High Court’s order that he refunds with interest money he received for land that he sold but never transferred.

Hon. Justice David Wangutusi of the High Court, Commercial Division has sentenced troubled businessman, Architect Peter Kamya to refund UGX1.3 billion that he received for selling land that he failed to transfer to the buyers.

Court also ordered him to refund the money with a 25% interest per annum since October 2016- an additional UGX1.6 billion! 

Court has also awarded Bahamas Limited, general damages of UGX80 million at 6% interest per annum from 26^th February 2021, the date of judgement.

Bahamas Investment Ltd, in November 2015, sued Mr. Kamya, for the recovery of UGX 1,300,000,000/= as money deposited by Bahamas Investment to purchase Mr. Kamya’s property comprised in Kyadondo Block 255 Plots 126 and 213 at Munyonyo.

Bahamas Investment also claimed UGX 130 million being 10% of the deposit, which is the contractual sum, in case any of the two parties defaulted. 

Bahamas Investment further sought general damages, interest and costs of the suit.

The case stems from a 2016 sale agreement of land by Mr. Kamya to Bahamas Investments an agreed UGX 5,090,000,000/= as the purchase price. The buyer was to pay UGX 1,300,000,000/= on signing the agreement, which they did. Upon the deposit, the seller was to deposit the Certificate of Title with Equity Bank which would release the balance of UGX 3,790,000,000/= to be paid to Kamya.

According to court documents, upon paying the deposit, Mr. Kamya did not deposit the title with Equity Bank. Bahamas proceeded to lodge a caveat on the land and subsequently approached Kamya with the balance of UGX 3,790,000,000/- on the condition that he deposits the certificate of title with the Bank or a neutral lawyer. Kamya refused and instead on October 20th, 2016, opted to terminate the sale agreement, under the pretext that the buyer had not paid within the stipulated 90 days. 

On receipt of the termination letter, Bahamas Investment went to court. 

Kamya denies liability

However, Kamya told the court that the contract they had entered into was illegal in the first place since Bahamas Investment being a foreigner-owned entity was prohibited by the Constitution of Uganda from owning mailo or leasehold land.

Kamya further stated that he terminated the contract under clause 7 of the Sale Agreement because Bahamas Investment had failed to pay the balance of UGX 3,790,000,000/= within 90 days from the date of signing the agreement.  

However, Court dismissed this, since the sale agreement warranted that Kamya would issue a transfer of mailo interest in favour of the purchaser’s advocate, one Paul Muhimbura who would in turn issue a lease for 99 years in favour of the purchaser.

“The foregoing clause brought the transactions within the law since what the Bahamas Investments were acquiring was Leasehold,” the court ruled.

Court also agreed with Bahamas Investments that it was Kamya’s failure and or refusal to deposit the Certificate of Title after receiving the first instalment that made it impossible for the buyers to get a loan from M/S Equity Bank which would be used to pay the remaining UGX3.79 billion.

Court also ruled that the said 90 days would only start accruing after the deposit of the said titles. 

“Clause 2(b) was to the effect that Bahamas Investment was to pay the balance of UGX 3,790,000,000/= to Kamya within 90 days from the date of signing. The position was however qualified by imposing more obligations upon Kamya. By the wording of the agreement the time spans within which the Bahamas Investment had to pay the balance, were subject to the Kamya depositing certain documents pertaining to the property with Equity Bank,” Justice Wangutusi observed.    

“In my view, Kamya’s failure to deposit with the Bank the requisite documents was a breach of what he had undertaken to do. Kamya breached the contract and in doing so he became liable to refund the 1,300,000,000,” further ruled the judge.

Kamya ordered to pay damages and interest

The court ruled that since Kamya had reneged on his contractual undertakings but also continued to withhold the money that he had received as part payment, this caused Bahamas damage which has to be atoned by Kamya.

“Considering the deprivation committed and frustration to what the Bahamas Investment looked at as a promising venture. I find an award of UGX 80 million appropriate as general damages,” the court ruled. 

“In conclusion, the court finds in favour of Bahamas Investment as follows:  Kamya breached the agreement; Kamya to pay 25% pay interest on the UGX 1,300,000,000/= from 10th October 2016 date of termination till payment in full and interest of 6% pa on general damages from the date of judgment till payment in full,” ruled Justice Wangutusi.

Interest of 25% on UGX1,300,000,000 for 5 years is equivalent to UGX1.6 trillion.

Mr Kamya is also to pay the costs of the suit, reads the 26th of February 2021 suit.

The troubled businessman recently lost two prime properties- Simbamanyo House and Afrique Suites Hotel to Meera Investments and Luwaluwa Investments respectively, following failure to repay USD10.8 million (UGX40 billion) owed to Equity Bank.

Despite shuffling lawyers, Kamya has lost three cases in court related to his bid to regain the above properties, leaving him saddled with legal and court costs.

This latest ruling will further compound his troubles.