In a landmark ruling reinforcing the authority of judicial orders, the High Court of Uganda has found Seroma Limited and its directors — Robert Bell Sekidde and Margaret Ssekidde — guilty of contempt of court. The Commercial Division ordered them to pay a UGX 100 million fine and tender security for the disputed property sale, after deliberately violating a court-issued stay of execution related to a contested land transaction.
The dispute centers on Kyadondo Block 254 Plot 233, a prime property in Kampala that has been the subject of long-standing litigation dating back to 2016, when Erimu Company Limited, alongside its directors Moses Kyayise and Betty Nabakiibi, filed suit challenging what they described as the illegal and fraudulent sale of several properties.
At the Heart of the Matter: Status Quo Breached
On 9 May 2022, the High Court issued an interim order staying execution of an earlier decision that had declared Seroma Ltd a bona fide purchaser of the property. The order was meant to preserve the status quo — Seroma’s ownership and occupation of the land — pending appeal.
However, in September 2023, Seroma’s directors went ahead and transferred the title to a third party, DL Properties Limited, in direct contravention of that stay. Upon discovering the transfer, the Applicants filed Misc. Application No. 390 of 2025, seeking to have the Respondents cited for contempt of court, committed to civil prison, and fined.
They also demanded UGX 1.7 billion in damages, claiming that the transfer had caused irreparable commercial loss and prejudiced their pending appeal.
The Court’s Verdict: Guilty of Contempt
Delivering a comprehensive 19-page ruling on 13 June 2025, Justice Ocaya Thomas O.R ruled that:
“The Respondents were aware of the court’s order and knowingly acted in violation of it. The transfer of the suit property materially altered the status quo and undermined the judicial process.”
The court held that even if the directors were not personally named in the stay, they acted as agents of Seroma Ltd — the primary party to the suit — and thus could not excuse themselves from liability.
While the court declined to award the UGX 1.7 billion in damages due to lack of proof of actual loss, it agreed that the Respondents’ actions warranted strong sanction. In addition to the UGX 100 million fine, the court ordered Seroma and its directors to tender security equivalent to the full purchase price of the land within 30 days, or risk civil imprisonment for six months.
Legal & Corporate Implications
The ruling is a sharp reminder to companies and their directors that contempt of court is a personal and corporate liability, especially when directors act in violation of binding court orders.
“The power of courts to punish for contempt is a necessary and integral part of judicial independence,” Justice Ocaya emphasized. “If parties were allowed to defy court orders at their whim, then courts would become mere talk shows.”
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“The stay of execution froze the legal consequences of the decree. By transferring the property, the Respondents undermined the purpose of the stay — to preserve the status quo pending appeal.”
What Happens Next?
The ruling gives the Respondents 30 days to:
Deposit security equivalent to the purchase price of the land;
Submit the sale agreement with DL Properties to the court; and
Pay the UGX 100 million fine.
Failure to comply could trigger civil imprisonment of the directors and other controlling officers of Seroma Ltd.
DL Properties Ltd, the new title holder, is not a party to the suit, and its status as a potential bona fide purchaser remains unresolved, leaving open the possibility of future litigation or clawback.
A Cautionary Tale for Corporate Uganda
This case is likely to be cited in future legal and corporate governance circles as a precedent on director liability, contempt of court, and the handling of contested assets pending appeal.
For business leaders, it underlines a key principle: commercial confidence cannot override judicial restraint. Corporate actors who ignore court orders — however inconvenient — risk serious legal consequences, including personal penalties, reputational damage, and potential imprisonment.
As Uganda’s judiciary continues to assert its authority, especially in complex commercial disputes, companies would do well to adhere to the letter and spirit of all court-issued orders — or face consequences far greater than just a loss on the books.
