In a ruling that reinforces Ugandan courts’ discretion to retain jurisdiction over disputes relating to alleged illegality, Justice Patience Rubagumya of the Commercial Division of the High Court declined to stay proceedings or refer a multimillion-dollar shareholder dispute involving Towerco of Africa Uganda, its Mauritian parent Towerco of Africa, and investor Hassanein Hiridjee, to English courts.
The applicants had invoked exclusive jurisdiction and governing law clauses in their Investment, Shareholders’, and Call Option Agreements, seeking dismissal or stay of a case filed by local shareholders Geoffrey Donnels Oketayot, Ronald Onzia, and George Arthur Ssamula.
Enforcing the “English clause,” the applicants argued that the parties had freely chosen English law and courts to govern their investment relationships.
Citing clauses 26.1 and 26.2 of the Investment Agreement and corresponding provisions in the other contracts, they maintained that only the Courts of England could hear any disputes arising therefrom.
They relied on precedent, including Uganda Telecom versus Rodrigo Chacon and Maersk Agency versus Derrick Munywevu, to argue that Ugandan courts must ordinarily give effect to clear an unambiguous forum selection clauses.
The applicants’ counsel, Kirunda & Co. Advocates and OS Kagere Advocates, further submitted that the respondents had waived their right to sue locally after previously seeking regulatory relief before Uganda Communications Commission under the same agreements, implicitly recognizing the contracts’ English jurisdiction clauses.
Respondents’ case: Fraud, duress, and waiver by conduct
The respondents, represented by Muwema & Co. Advocates and Solicitors, however, strongly opposed the application.
They alleged that the agreements were procured through fraud, economic duress, and undue influence. The claims strike at the heart of the contracts’ legality.
They further contended that Towerco’s reliance on the jurisdiction clause was disingenuous, as the parties had fulfilled all contractual obligations under Ugandan law, including share transfers, licensing, and regulatory filings.
This conduct, they argued, amounted to a waiver or variation of the exclusive jurisdiction clause under Section 66 of the Contracts Act, 2010.
Preliminary issue: The competence of affidavits
The respondents also sought to discredit the applicants’ affidavits, arguing that the deponent, Sara Adong, lacked a valid practicing certificate and personal knowledge of the disputed facts.
However, court rejected this challenge, clarifying that the absence of a practicing certificate does not invalidate an advocate’s affidavit when sworn in a personal capacity as a witness.
Citing Collin Kasule v Fina Bank, Justice Rubagumya affirmed that “a practicing certificate is only a license to practice law and not what makes an advocate.”
She further held that Adong’s averments demonstrated sufficient knowledge and belief, given her professional involvement in the matter as counsel for the applicants.
The crux: When jurisdiction clauses meet allegations of fraud
On the substantive issue, the court accepted that the jurisdiction clauses were clear, valid, and enforceable in form. Court pointed to the explicit wording that “the Courts of England shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement.”
Nevertheless, Justice Rubagumya invoked the “strong reasons” test, a doctrine recognized in Ugandan jurisprudence through cases like Maersk Agency v Derrick Munywevu and ICCO Cooperation Uganda v Trivision Uganda, which allows a court to disregard a forum selection clause where compelling reasons exist.
Such reasons include fraud, duress, undue influence, bad faith, or evasion of mandatory provisions of domestic law.
The judge noted that the respondents’ pleadings squarely alleged that the agreements, including the jurisdiction clause, were procured by fraud and coercion, and that the contracts themselves were potentially void.
Netflix Strikes $82.7 Billion Deal to Take Over Warner Bros., Redefining the Global Entertainment LandscapeShe, therefore, reasoned that it would be premature and unjust to stay the proceedings or send the case to a foreign court before testing the legality of the very contracts containing those clauses.
“In my opinion, the above remedies warrant this court’s investigation into the legality of the contracts,” she held, concluding that allegations of fraud, economic duress, and undue influence constitute strong reasons for this court to intervene.
The decision: Application dismissed, jurisdiction affirmed
In the final analysis, Justice Rubagumya dismissed the application, ruling that the Ugandan High Court retains jurisdiction to hear and determine the case and any related applications.
She ordered that costs be in the cause, deferring their determination to the conclusion of the main suit
Her ruling was delivered electronically on October 21, 2025, under the Judicature (Electronic Filing, Service and Virtual Proceedings) Rules, 2025, a nod to Uganda’s evolving digital court infrastructure.
Analysis
The Towerco ruling contributes to a growing body of Ugandan jurisprudence, where courts have balanced party autonomy against public policy and equitable considerations.
While Uganda’s Commercial Division traditionally enforces international forum clauses to protect contractual certainty and investor confidence, this case underscores that such clauses are not absolute shields when the contract’s legitimacy is under challenge.
By refusing to enforce the jurisdiction clause at this preliminary stage, the court preserved its inherent power to interrogate allegations of fraud and coercion, a domain that directly implicates Ugandan public policy and statutory integrity.
Legal analysts note that this approach mirrors English and Commonwealth principles: a forum selection clause cannot oust local jurisdiction when the very existence of the contract is impugned.
Implications for cross-border investment contracts
The ruling sends a clear signal to multinational investors and local partners alike: exclusive jurisdiction and governing law clauses must be crafted and invoked with caution.
While such clauses remain essential for predictability in cross-border transactions, they will not override a local court’s duty to investigate fraud or coercion claims.
In practical terms, Towerco and similar investors may face prolonged local litigation before any referral to foreign forums is considered appropriate.
It also offers reassurance to domestic shareholders and employees in multinational ventures that Ugandan courts will not abdicate jurisdiction where local interests, fairness, or legality are in question.
Conclusion: A lesson in contract integrity over contract clauses
In Towerco of Africa & Others v Geoffrey Donnels Oketayot & Others, the Commercial Court reaffirmed that the rule of law and contractual integrity outweigh mechanical enforcement of jurisdiction clauses.
By applying the “strong reasons” doctrine, Justice Rubagumya struck a balance between respecting party autonomy and safeguarding justice within Uganda’s commercial environment.
As the substantive suit proceeds, the court’s eventual findings on the validity of the disputed agreements and whether fraud or duress indeed occurred will further test how far Ugandan courts can go in policing global investment contracts executed on local soil.
