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Govt Ordered to Reinstate Titles, Pay Shs1bn in Damages to Nakawa-Naguru Satellite City Project Developers

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Govt Ordered to Reinstate Titles, Pay Shs1bn in Damages to Nakawa-Naguru Satellite City Project Developers
Part of the construction works that stalled in the Nakawa-Naguru Satellite Project land

A court ruling has forced the Ugandan government to reinstate land titles for the Nakawa-Naguru Satellite City and pay Shs1 billion in damages for breaching a settlement agreement.

The Commercial Division of the High Court has ordered the government to reinstate property titles for Opecprime Properties Limited in the Nakawa-Naguru Satellite City project and awarded the company Shs1 billion in damages.

The ruling in the Civil Suit 479 of 2022, delivered on January 20, 2025, followed a breach of the settlement agreement between the two parties, which had been signed in September 2021.

The government’s failure to honour the agreement, which involved reinstating land titles for OpecPrime’s 15.629 acres, prompted the legal action.

Justice Harriet Grace Magala ruled that the government’s actions, including reallocating the land to third parties, constituted a clear violation of the terms outlined in the agreement.

“The Defendant failed to perform its obligations as per the Settlement Agreement, and this constitutes a breach of contract,” Judge Magala said in her ruling.

The court emphasised the economic impact the breach had on OpecPrime, whose development plans for the area were hindered by the failure to receive the promised titles.

The court ordered that the government immediately reinstate the property titles to OpecPrime’s name and ensure that the land is properly registered under their ownership.

The ruling also included a permanent injunction to prevent further interference with the land, reinforcing the court’s stance on protecting the developer's rights.

In addition to the reinstatement order, the court awarded OpecPrime Shs800 million in general damages for the financial losses caused by the government’s failure to comply with the settlement.

An additional Shs200 million was granted in punitive damages, marking a strong rebuke of the government’s actions.

“Punitive damages are awardable where a breach involves a tort,” Judge Magala explained, highlighting the seriousness of the government’s conduct in this matter.

“This case involved clear disregard for the terms of an agreement entered into freely, which impacted not just the Plaintiffs but the entire public-private partnership.”

Background to the case

The case dates back to a 2007 public-private partnership agreement between OpecPrime and the government for the development of the Nakawa-Naguru Satellite City.

However, disputes arose over the course of the following years, leading to the filing of Miscellaneous Cause No. 41 of 2018, where the Plaintiffs sought to prevent eviction or any disturbance of the land.

In 2021, the Settlement Agreement was meant to resolve these disputes and restore the land titles to the Plaintiffs.

However, despite this agreement, the government failed to fulfill its part of the deal. The breach was clearly demonstrated during a locus visit by the court on May 17, 2024, where evidence showed that plots originally designated for OpecPrime were either being occupied by third parties or remained without the proper title deeds.

Through their lawyers, Elison Karuhanga and Bonny Kolokolo of Kampala Associated Advocates, the plaintiffs argued that while they were in possession of some properties, including several townhouses and villas across the Nakawa-Naguru area, they had not received title deeds for any of the land specified in the settlement.

“The plan was to develop the area into rental homes as specified under Schedule A, but the Defendant’s actions rendered this impossible,” OpecPrime director Hassan Kimbugwe told the court.

Moreover, the Uganda Land Commission, under the direction of the Attorney General, had allocated portions of the contested land to other developers, including Karim Somani and Roko Construction Ltd, without OpecPrime’s consent or the proper legal transfer of titles.

The Attorney General's failure to follow through with the terms of the settlement agreement not only breached the contractual arrangement but also caused delays in the satellite city project, which is a critical development for Uganda’s urban growth.

Judge Magala trashed defence counsel Samuel Tusubira's arguments, stressed that such breaches were detrimental to public-private partnerships, which depend on government compliance with agreements to ensure investor confidence.

“The failure to reinstate the titles and comply with the contractual obligations has far-reaching consequences, not just for the plaintiffs but for future partnerships that depend on the integrity of agreements with the government,” she remarked.

The Attorney General had also contested the jurisdiction of the Commercial Division, with Mr Tusubira arguing that the case belonged in the Land Division due to its connection with land interests.

However, the court ruled that the claim was based on a breach of contract and thus fell under the Commercial Division’s remit.

“The Settlement Agreement arose out of a Public-Private Partnership Agreement, which is clearly commercial in nature,” Judge Magala said.

The court also addressed the inadequacy of the Attorney General’s defence. The written Tusubira statement submitted was struck out due to its evasive and non-compliant nature.

“It is not sufficient to merely state that this or that is denied,” Judge Magala noted. “Pleadings must clearly address the substance of the claims, and it is the Defendant’s responsibility to provide a clear response.”

In addition to the monetary damages, the court awarded OpecPrime the costs of the suit.

The prime land that has largely been bushy over the years, was already witnessing activity with shrubs cleared by Wednesday.

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