Patrick Bitature, the founder, Chairman and CEO at Simba Group East Africa, has spoken out on the legal woes and challenges threatening his business empire.
Vantage Mezzanine Fund II Partnership, a South Africa-based Africa-focused fund manager with offices in Johannesburg, and city businessman Bitature have been locked in a prolonged legal battle.
“The last few days have been tough for both the group & I, as we have made news for all the wrong reasons. There are things that I am unable to speak about, especially on Social Media but when the time is right, I shall address them,” Bitature said in a statement on Sunday.
He added: “I shall face these challenges & resolve them.”
In 2014, Bitature entered into an agreement with Vantage and acquired $10 million credit from the fund to run his real estate development.
According to 2019 court filings quoted by The Observer, Vantage and Bitature agreed to such terms that if he fails to pay back this money, it would be turned into shares to Vantage.
The agreement also stated that, in case of any disagreement, they would be solved through arbitration not court.
Clause 43.1 of the Mezzanine Term Facility Agreement (MTFA) that Bitature signed with Vantage reads; “Any dispute, claim, difference or controversy between the parties arising out of, relating to or having any connection with this agreement including any dispute as to its existence, validity, interpretation or performance, breach or termination or the consequence of its nullity and any dispute relating to any non-contractual obligations arising out of or in connection with…”
When Daily Monitor published a story at the close of last week stating that High Court judge, Musa Ssekaana had asked Uganda Registration Services Bureau (URSB) to consider documents in Simba Telecom takeover, Bitature’s lawyers Muwema & Company Advocates and Solicitors, wrote to the managing director of Monitor Publications demanding a retraction and US$ 1,000,000 in damages.
Acting on behalf of Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited, and Elgon Terrace Hotel Limited, Muwema accused Monitor of “recklessly and falsely” reporting that the High Court had directed the Uganda Registration Services Bureau to register a share takeover in his client Companies by Vantage Mezzanine Fund Il Partnership.
“We must state categorically that the High Court which entertained the case in reference, Misc. Cause No. 205/2021 Vantage Mezzanine Fund II Partnership vs URSB, & Simba Properties & 3 Others, did not issue any orders directing the share takeover in our client Companies or at all.”
“On the contrary, the Court dismissed the case on the ground that Vantage Mezzanine Fund Il Partnership was not a legal entity by reason of its failure to register as a Partnership in Uganda. A copy of the court decision is attached hereto as annexture “B”. Anyone casually reading the Court’s decision would not reach the conclusion that the same court had ordered a non-legal entity to takeover of shares in the aforementioned Companies.”
According to the lawyers, these arbitration clauses were included in the agreement under duress and that is why other than resorting to it, Bitature would wish the High Court to intervene instead to solve the dispute because it had unlimited powers over any civil matters.
The last few days have been tough for both the group & I, as we have made news for all the wrong reasons.
There are things that I am unable to speak about, especially on Social Media but when the time is right, I shall address them.
I shall face these challenges & resolve them. pic.twitter.com/CS3B8AgyXF
— Patrick Bitature (@patrickbitature) May 22, 2022
Commercial Court ruling
URSB, on the other hand, (while declining to act on Vantage share transfer) cited a judgement by Commercial Court judge Boniface Wamala saying the arbitration clauses of the agreement ought to be the basis through which Bitature and Vantage solve their disagreement.
Justice Wamala, in his June 16, 2021 ruling, said: “It follows therefore that where the question as to the existence and validity of an arbitration agreement has been brought before the court, if the court upon investigation finds that the arbitration clause exists and is not invalid, the court must refer the matter to the arbitral tribunal to investigate any other matters concerning the contract between the parties…For avoidance of doubt, questions regarding the validity or not of the contract in issue are one of the issues that lie within the domain of the arbitral tribunal. Contrary to the submissions of the respondent’s counsel, such questions cannot be the basis for divesting the arbitral tribunal of jurisdiction and instead investing in the court. Such an argument would amount to construing the provisions of the ACA in reverse mode.”
He went on: “I find this claim by the respondents escapist and unserious. This is more so because this court is in a position to take judicial notice of the fact that the persons behind the respondents, particularly the third plaintiff in the amended plaint, are some of the most polished and astute business personalities there are in Uganda. The respondents were well and independently advised by senior and prominent legal professionals in Uganda. Faced with such facts, my view is that a feeble claim of duress and/or undue influence of the nature as this one amounts to an insult of own intelligence on the part of the respondents and their advocates.”
Justice Wamala thus ruled that Bitature meets the costs of the application and of the terminated proceedings in an earlier case before the same court over the dispute.
High Court ruling
Vantage would later rush to the High Court in Kampala to seek a judicial review over the decision by URSB to refuse the transfer of shares to it from four of Bitature’s companies; Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited and Elgon Terrace Hotel Limited.
Vantage claimed that URSB’s action of refusing to register documents lodged upon confirming that the same conform with registry requirements was “irrational, arbitrary, unreasonable, clothed with procedural impropriety, discriminatory, erroneous on the face of the record, lased with bias and malice, ultra vires, unfair, unjust and illegal and unlawful”.
It further alleged that URSB’s halting of the registration of documents properly lodged for registration until the completion of an arbitration process was against its mandate, and the law on registration of documents.
Vantaged then asked that the court intervenes and order that the halting or delaying of the registration of documents lodged before the URSB on June 18, 2021, was unfair, discriminatory and illegal.
It further sought an order compelling URSB to immediately complete the process of registering the documents that would transfer shareholding in Bitature’s firms and “desist from entertaining any other processes, colluding with or otherwise entertaining the interference of persons ultra-vires the registration process, or acting in any manner that is contrary to the law and process of registering documents, or in any way frustrates or otherwise offends the applicants’ rights”.
Thank you to all our staff, customers and stakeholders, your support towards Simba Group is heart-warming.
I urge you to disregard the fake news. This attack is intended to cause reputational damage.
The laws of Uganda have been upheld and none of our properties are for sale. pic.twitter.com/OdvAI8v6IA
— Patrick Bitature (@patrickbitature) May 18, 2022
URSB in an affidavit sworn in by Patricia Opoka Akello, the manager document registration and licensing, admitted receiving documents from Vantage to register resolutions and share transfer from Simba Properties Investments Co. Ltd, Simba Properties Ltd, Linda Properties Ltd and Elgon Terrance Hotel Ltd.
She said four days later, they received documents from Muwema & Co Advocates & Solicitors acting for Bitature objecting to the registration of the said resolutions and transfers of shares citing a court order referring the matter in dispute to arbitration.
After a meeting with both parties, URSB, was convinced that the documents submitted to it are part of the dispute that was yet to be decided through arbitration.
High Court Judge Musa Ssekaana on May 9, 2022, ruled that Vantage Mezzanine Fund II Partnership has no legal basis to sue anybody in Uganda.
In his ruling, Ssekaana agreed with URSB and Bitature’s companies that indeed Vantage Mezzanine Fund II Partnership is a non-existent legal entity and hence incapable of instituting these proceedings.
“The law in Uganda is prohibitive of such a partnership to operate without registration and penalizes the offending party continuously for offending the provision for registration under the Partnership Act. 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 capacity to sue or not to sue in Uganda,” the judge ruled.
He added: “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.”
Having established that Vantage has no legal rights in Uganda, its case collapsed.
Meanwhile, Bitature thanked his staff, customers and stakeholders, saying their support towards Simba Group is heart-warming.
“I urge you to disregard the fake news. This attack is intended to cause reputational damage. The laws of Uganda have been upheld and none of our properties are for sale.”
Source: The Observer
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