Quick Auctioneers and Court Bailiffs noted that M/s Kirunda and Wasige Advocates, the law firm representing Vantage Mezzanine Fund II Partnership in a protracted commercial case with Simba Properties Investment Co. Ltd, authorised the foreclosure sales.
Mezzanine financing, according to information on Investopia website, is a “hybrid debt and equity financing that gives the lender the right to convert the debt to an equity interest in the company in case of default …”
In the interview Muwema said this was done with malice to soil the good name of Butature. He said although the arbitration process which was supposed to happen in London was yet to take off, they were stunned to read in the media that Vantage was moving to attach his client’s properties.
On why the parties went to court in the first place, Muwema said the agreement was unfair to Bitature because it levied unconscionable interest rates.
In the commercial division, Bitature had also objected to taking the case to arbitration arguing that that particular clause was included in the loan agreement under duress but the judge wouldn’t have any of this. He scornfully ruled: “In my view a feeble claim of duress and/or undue influence of the nature as this one amounts to an insult of own intelligence on the part of the Respondents and their advocates.”
However, Muwema said unfair agreements are a common thing even to big entities like governments. He added that if the judge had interrogated the issue farther, he would have realised that indeed there was undue influence.
We are still unable to speak to Robert Kirunda, Vantage lawyer despite repeated calls to his known telephone number.
Muwema added that after breaking the law, they as law abiding citizens would not continue dealing with Vantage.
On May 9, High Court Judge Musa Ssekaana ruled that Vantage Mezzanine Fund II Partnership has no legal basis to sue anybody in Uganda.
The entity had rushed to the High Court to seek a judicial review over the decision by the Uganda Registration’s Services Bureau-URSB to refuse the transfer of shares to it from four of Bitature’s companies that include; Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited and Elgon Terrace Hotel Limited.
The transfer of shares arose after Bitature failed to meet his part in the agreement to pay back a loan he had contracted in 2014 to help in his real estate development. According to 2019 court filings, Vantage provided Bitature with $10million and agreed to such terms that if he fails to pay this money, it would be turned into shares to Vantage.
The agreement also stated that, in case of any disagreement, they would be solved through arbitration not court. That’s why High Court judge Boniface Wamala ruled that his court had no power to hear the dispute and referred it to arbitration.
"There are so many decided cases where the courts have cancelled loan agreements with excessive interest rates...So that will now be hurdle number two. If you jump the hurdle that you’re legal and you exist, now we go to the terms of the agreement. Everyday the Commercial court is examining the terms of agreements between banks and borrowers. Everyday Commercial court is full of those cases. So the court has powers to examine the agreement you signed with your bank and say was this fair because there are certain obligations a lender has to meet. There are certain rights a consumer/borrower is entitled to. So they examine and open up those agreements and if they find they are unfair, they are illegal and so on, they cancel them or they reduce the interest or the amount," he said
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