Tycoon Patrick Bitature In Tears As Court Allows Vantage Capital To Sell Off His Properties
By Uganda Online Media
Kampala: The High Court- Commercial Division has Wednesday dismissed an application by businessman Patrick Butature in which he sought to block Vantage Capital, a South African money lending institution from selling his properties in Uganda to recover $34.
On Wednesday 18, May 2022 an advert appeared in print media indicating that lawyers acting on the instructions of M/s Vantage Mezzanine Fund II Partnership had put on sale by public auction, multiple properties belonging to Bitature.
The properties include; “Elizabeth Apartments” at Kololo in Kampala, “Protea Hotel-Naguru (Sky’s Hotel) in Kampala, and “Moyo Close Apartments,” Kololo gardens in Kampala.
The auction sought to recover $34 million an overdue debt that Bitature owes Vantage Capital.
Bitature later acknowledged borrowing $10 million in 2014 and explained that his failure to service the loan was a result of the Covid-19 pandemic and delayed oil production in Uganda.
However, through his lawyers Muwema and Co. Advocates, Bitature sued Vantage legal advisors, Robert Kirunda, Noah Shamah wasige, Festus Kateregga and Commissioner Land Registration in a bid to block the sale of his properties.
In his ruling on Wednesday, Justice Stephen Mubiru dismissed the application with costs noting that ”in the result, I found that a prima facie case had not been established. There were no serious questions of law and fact to be tried by this court to justify the grant of a temporary injunction.
“The application was thus dismissed with costs to the respondents and the underlying suit was struck out with costs to the defendants.
“On basis of all the foregoing considerations, I found that this application and the underlying suit were entirely misconceived on account of the fact that they were instituted against agents of a 15 known principal, and on ground that the matters placed in issue in the suit are already the subject of a subsisting arbitral process.
“This court had on two occasions before already declared that it will not exercise jurisdiction over the matter in light of the submission to arbitration that is valid, binding, operative and enforceable. I found it unnecessary in the circumstances to consider the rest of the criteria for the grant of a temporary injunction.
This means that now Vantage can go ahead with the sale of Bitature’s properties to recover its money considering that the 30 days given to him to clear the loan are ending on Friday.
Background
This whole Saga began in 2014 when Simba Properties Investment Company Limited (SPIC) (as borrower) and Patrick Bitature (as guarantor and promotor) borrowed US$10,000,000 (Loan) from Vantage to refinance a portion of the Simba Groups’ existing debt and to fund the completion of Simba’s Skyz Hotel in 2014 but since then, Bitature has never paid any single coin arguing that the company isn’t legally registered in Uganda and therefore can’t make mistake to carry out any business with ‘an illegal company.
According to Vantage, the 2014 loan matured and fell due for repayment in December 2019. but instead of making efforts to repay the Loan, the Simba Group and Bitature resorted to litigation, claiming that Vantage’s Loan was invalid and signed under duress and therefore Simba, having used the money, did not have to repay it.
Bitature, through his lawyers, doesn’t deny that he received the money but has since then never paid a penny, why?, he argues that the company isn’t legally registered in Uganda and therefore can’t carry out any business, let alone borrowing billions of money to him! Bitature’s debt, according to sources had swollen close to thirty million US dollars (Ush100 billion), of which, instead of paying back, he changed gears and asked for legal paperwork for the company that borrowed him.
Bitature’s opinion was indeed cemented by Hon. Justice Musa Ssekaana of the High Court when he declared in Misc. Cause No. 205 of 2021 Vantage Mezzanine Fund II Partnership vs Simba Properties Investment Co. Ltd, that Vantage Mezzanine Fund II Partnership is a non-existent legal entity which had no locus standi to file the suit.
”In the present case, the applicant contends that it is a partnership, which means that it must comply with the law which requires registration in order to have the capacity to sue or to be sued in Uganda. The applicant’s status as a recognized entity in South Africa has not been proved to the satisfaction of this court since there is no single registered document that has been produced before this court apart from a few pages of the unregistered partnership agreement,” Ssekaana ruled.
”In the same vein, this Court rejects the submission of counsel for the applicant, that foreign partnerships are free to operate in Uganda outside the regulatory registration requirements contained in the Partnerships Act, 2010 and the Business Names Registration Act (Cap 109). Therefore, the international partnerships or foreign partnerships just like the Ugandan partnership cannot be recognized once they are not registered since their identities are unknown and it may open the door wide for fraud in their transactions and dealings,” he added.
