The High Court of Uganda has ordered a fresh taxation of legal costs in the long-standing financial dispute between businessman Patrick Bitature’s Simba Group and South African lender Vantage Mezzanine Fund II Partnership.
The ruling, delivered on March 13, 2025, by Justice Stephen Mubiru, set aside an earlier taxation decision and directed a reassessment of costs, citing errors in determining the value of the subject matter.
Background of the Case
The legal battle dates back to 2014 when Bitature’s companies, including Simba Properties Investment Co. Ltd and Simba Telecom, secured a $10 million loan from Vantage.
The dispute escalated in 2019 when Bitature challenged Vantage’s demand for repayment, arguing that the loan agreement was illegal as Vantage was not licensed to operate as a financial institution in Uganda.
The case also questioned the fairness of the loan terms, which had ballooned the debt to $26.48 million.
In 2021, the High Court referred the matter to arbitration, ruling that the loan agreement contained a valid arbitration clause. Consequently, all legal proceedings were dismissed, and Vantage was awarded legal costs.
Taxation Dispute
Following the court’s decision, Vantage sought reimbursement of its legal fees, submitting a bill of UGX 104 million. The Deputy Registrar awarded UGX 90 million as instruction fees, reasoning that the subject matter of the case—the loan agreement’s legality—was unquantifiable.
However, Vantage appealed, arguing that the Deputy Registrar erred in not considering the actual loan amount ($26.48 million) as the case’s subject matter. The firm contended that the instruction fees were unjustly low and did not reflect the complexity and financial stakes involved.
On the other hand, Bitature’s legal team cross-appealed, claiming that the awarded costs were excessive and punitive. They argued that since the case never went to full trial, lower instruction fees were warranted.
High Court’s Ruling
In his ruling, Justice Mubiru found that the Deputy Registrar had misdirected herself by failing to recognize that the primary dispute revolved around the $26.48 million loan. He ruled that this sum should have been the basis for calculating legal costs.
However, he agreed with the Registrar that certain applications within the case, such as the arbitration motion, had no clear monetary value and should be taxed differently.
Justice Mubiru, therefore, set aside the awarded costs and ordered a fresh taxation, instructing the Deputy Registrar to reassess fees based on the correct valuation of the dispute.
Implication
The ruling means Vantage and Bitature’s legal teams will return to the taxation process, where a new legal cost assessment will be determined.
The outcome will influence future financial litigation in Uganda, particularly cases involving foreign lenders and local borrowers.
While the arbitration process remains the primary dispute resolution avenue, the taxation ruling highlights the complexities of enforcing financial agreements in Uganda’s legal landscape.
Both parties are yet to comment on the ruling, but the case underscores the challenges businesses face in high-stakes financial disputes, especially when foreign investment and local regulatory frameworks collide.
