By Our Writer
Kampala
The Uganda Court of Appeal has upheld a High Court ruling ordering Imperial Royale Hotel Ltd to refund Shs 5.4 billion to the government for breach of contract during the 2007 Commonwealth Heads of Government Meeting (CHOGM).
Accirding to Media reports, The three-judge panel — Justices Moses Kazibwe Kawumi, Irene Mulyagonja, and Oscar John Kihika — dismissed the appeal in its entirety, affirming that the Ministry of Foreign Affairs was entitled to recover money paid for unfulfilled services.
Quoting from his 32-page lead judgment, Justice Kawumi said: “Upon hearing the evidence, the trial judge found the hotel was not ready to receive any guests before 18 November 2007 and the Hotel was held liable to refund USD 1,464,363.81 (Shs 5.4bn) at 12 percent interest per annum from the date of filing the suit until payment in full.”
Converted at prevailing rates, the refund equals about Shs 5.4 billion, while the court also upheld an additional Shs 800 million in general damages carrying 23 percent interest from the date of judgment, plus costs in both courts.
Kawumi wrote: “The appellant failed to fulfil the terms of the signed agreement and is therefore liable for breach of contract. I would not find reason to fault the trial judge’s finding on a matter that was pleaded and evidence led to prove it.”
The background shows that the government, through the Ministry of Foreign Affairs, entered an agreement with the hotel on 15 June 2007 to provide accommodation and conference facilities for CHOGM delegates at a total value of USD 2.56 million (about Shs 9.5 billion).
The hotel undertook to have all facilities operational by 31 August 2007.
However, auditors from Messrs Johnson & Nyende Certified Public Accountants, contracted by the ministry, found the facilities incomplete until mid-November 2007.
Justice Kawumi cited the report as credible evidence that the government “paid for guaranteed rooms which were never available within the agreed period.”
The Court also rejected the hotel’s reliance on an occupation permit dated 24 October 2007, calling it “wanting in evidential value,” and dismissed unpleaded claims that security cordons hindered completion.
It further held that an email sent by the hotel’s Managing Director, Karim Hirji, did not constitute lawful notice of readiness.
Justices Mulyagonja and Kihika concurred. Unless overturned by the Supreme Court, Imperial Royale Hotel — part of businessman Karim Hirji’s Imperial Group, remains liable for more than Shs 6 billion in principal, interest, and costs accumulated since 2009.
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