KAMPALA, UGANDA – In a major legal victory, the Criminal Division of the High Court of Uganda has dismissed criminal charges brought against Vantage Capital and its personnel by tycoon Patrick Bitature’s Simba Group of Companies.
The court’s decision, made on April 19, 2024, sets aside all charges and arrest warrants issued against Vantage Capital’s current and former employees, describing the private prosecution as a “travesty of justice.”
In her ruling, the judge harshly criticized the magistrate and Mr. Atuhairwe, the lawyer representing Simba and Bitature, stating: “It beggars belief that any right-thinking person… would suggest that the MTFA was executed on behalf of Simba as a consequence of false pretenses on the part of Vantage. To suggest otherwise… is to make an absolute mockery of justice.”
The judge also emphasized that “the courts of Uganda have a duty to protect the country as an investment destination” and that “the efficiency and effectiveness of a country’s judiciary is indispensable in enhancing the attractiveness of a country as an investment destination.”
She further noted that “the protracted battle over the payment of a loan which by all indications was taken voluntarily… has undoubtedly dented Uganda’s image as an investment destination and impacted negatively on its investment climate ratings.”
The judge concluded by stating that “this court will not fold its hands and perpetrate a travesty of justice” and that “the injustice of refusal to repay the loan has been compounded by dragging the lenders (partners of Vantage) to the courts pursuant to private criminal proceedings.”
Derek Alexander, Associate Partner: Legal at Vantage Capital, welcomed the decision, stating: “We are pleased that the court has put an end to this regrettable episode of spurious criminal allegations. This ruling reaffirms the sanctity of contracts and Uganda’s commitment to protecting investments. We hope that Simba will now honor its obligations and repay the loan.”
Vantage Capital praised the court’s commitment to upholding the rule of law and protecting Uganda’s investment climate. The company’s legal team expressed satisfaction with the outcome, noting that the decision vindicates their position and highlights the importance of honoring contractual obligations.
This ruling marks a significant milestone in the long-standing dispute between Vantage Capital and Simba Group, with the court reaffirming the legitimacy of the facility agreement and the responsibility of Simba to repay the loan.
PUBLIC STATEMENT FROM VANTAGE CAPITAL ON THE COURT’S DECISION IN MISCELLANEOUS CAUSE 12 OF 2024: WARREN van der MERWE & 2 OTHERS v. ATUHAIRWE WYCLIFFE
We publish this statement to clarify for the public benefit certain developments in the long-standing disputes between Vantage Capital and the Simba Group of Companies (Simba).
As has been widely reported, in March earlier this year the Chief Magistrates Court at Buganda Road issued criminal summons, and thereafter arrest warrants, against certain Vantage Capital personnel (and one former Vantage employee) on the basis of a private prosecution brought by a Mr. Wycliffe Atuhairwe (a lawyer at Moogi Brian & Co. Advocates, a firm which represents Simba and Mr Patrick Bitature).
While being merely a further spurious and baseless attempt by Simba and Mr Bitature to avoid repaying amounts owed to Vantage through the abuse of Ugandan Courts, the private prosecution was ostensibly brought on the basis that Vantage lent money to Simba unlawfully.
We are pleased to report that on 19 April 2024 the Criminal Division of the High Court of Uganda overturned the Magistrate’s above decisions and set aside all charges and warrants brought against Vantage’s current and former personnel.
In her decision the Learned Judge described the prior authorisation of criminal proceedings as a “travesty of justice” and was highly critical of the Magistrate and Mr. Atuhairwe. In a rare action in the Criminal Court, she also sanctioned Mr. Atuhairwe to personally meet the costs of these otherwise regrettable and spurious proceedings. We believe that this strong action and criticism was highly warranted, and we highlight a few of the Learned Judge’s reasons for the public benefit:
The Magistrate was bound by, and required to follow, certain findings of higher courts already made regarding the Vantage/Simba dispute. Among others, such findings are that Vantage was not required to register in Uganda before signing the Facility Agreement with Simba, and is not required to have a money-lending license as it does not ‘carry on business’ in Uganda.
Vantage did not obtain securities from Simba by false pretenses. She found that “it was plain for all to see” that Simba had entered the various agreements voluntarily. Simba cannot sustain the argument that they were duressed, unduly influenced or somehow defrauded into entering the Facility Agreement.
The Learned Judge also specifically stipulated that the courts of Uganda have a duty to protect the country as an investment destination. Her words on this and the preceding point bear repeating here:
…Simba retained one of the brightest legal minds in this country to draw the MTFA [Mezzanine Term Facility Agreement]. It beggars belief that any right thinking person let alone an advocate would turn around and suggest that the MTFA was executed on behalf of Simba as consequence of false pretenses on the part of Vantage. It is plain to see that the MFTA was entered into voluntarily by the parties to it, the parties involved and the firm of lawyers that were retained to draw it appreciated the implications of executing the MFTA. To suggest otherwise and to repeatedly attempt to advance in courts of law the narrative that the MFTA was not entered into voluntarily by the Bitatures is to make an absolute mockery of justice.
Courts of law in any jurisdiction, by virtue of the decisions they pass in investment disputes such as the one between Vantage and Simba Properties Investment Company Limited, send a signal to investors, particularly foreign investors, about the level of confidence investors should accord that country as an investment destination. The efficiency and effectiveness of a country’s judiciary is indispensable in enhancing the attractiveness of a country as an investment destination. The protracted battle over the payment of a loan which by all indications was taken voluntarily [extended][sic] in 2014 in circumstances that were clearly voluntary, has undoubtedly dented Uganda’s image as an investment destination and impacted negatively on its investment climate ratings. It is a travesty of justice that providers of capital for investment have now been dragged before courts of law and warrants of arrest issued against them in respect of a loan that was extended in December 2014 in respect of which not a single cent has been repaid to date. In an act of brazen abuse of court process, the injustice of refusal to repay the loan has been compounded by dragging the lenders (partners of vantage) to the courts pursuant to private criminal proceedings and as we speak there is an arrest warrant pending against the partners of Vantage. This court will not fold its hands and perpetrate a travesty of justice.
Under Ugandan law, this decision is not appealable. It therefore brings this regrettable episode of spurious criminal allegations against Vantage to an end. It also echoes previous findings on the sanctity of the Facility Agreement with Simba, and the hollow and feeble nature of their arguments on duress and undue influence.
We at Vantage welcome and echo the sentiments of the Learned Judge in this decision, and the finality it brings to the spurious criminal allegations.
Contact:
Derek Alexander, Associate Partner: Legal
Email: derek@vantagecapital.co.za
