In a landmark ruling delivered by the Commercial Division of the High Court, Kampala International University’s (KIU) application to stay the execution of a $12.7 million (Shs 46.6 billion) arbitral award in favor of Housing Finance Company Limited was dismissed.
Presided over by Justice Stephen Mubiru, the decision marks a significant development in the enforcement of foreign arbitral awards in Uganda.
Background of the Case
The dispute dates back to 2010, when KIU borrowed $13.7 million (Shs 50.3 billion) from Housing Finance Company of Kenya to fund the expansion of its campus in Kitengela, Kenya.
After KIU defaulted on its loan obligations, the lender recalled the outstanding amount of $11.6 million in 2016. The matter was referred to arbitration in Kenya, where the tribunal ruled in favor of the lender—awarding $12.7 million plus interest at 9.5% per annum, compounded from January 2018.
KIU challenged the arbitral award in Kenyan courts, but its appeals were dismissed by the High Court, the Court of Appeal, and the Supreme Court of Kenya. Subsequently, Housing Finance Company sought recognition and enforcement of the award in Uganda, which was granted by the High Court on March 10, 2025.
KIU’s Application for Stay of Execution
KIU filed an application seeking to stay the enforcement of the award, arguing that the appeal raised substantial legal issues surrounding the recognition and enforcement of foreign arbitral awards in Uganda. The university claimed that execution of the award would cripple its operations, potentially forcing closure and negatively affecting its 30,000 students.
KIU also argued that the award had been partially set aside by Kenyan courts and questioned whether the respondent had the legal authority to enforce the award in Uganda.
However, Justice Mubiru dismissed the application, stating that KIU failed to satisfy the legal requirements necessary for a stay of execution.“The court found no evidence of immediate steps taken by the respondent to execute the decree,” Justice Mubiru stated.
He further ruled that KIU did not sufficiently demonstrate how execution would cause irreparable harm to its operations or hinder its ability to pursue the pending appeal.“The court noted that KIU’s appeal lacked a strong likelihood of success, as it challenged well-established legal principles and binding precedents,” he added.
The court also emphasized that granting a stay would cause undue harm to the respondent, who has awaited repayment since 2016. KIU’s failure to offer adequate security for the decretal amount—a key requirement for a stay—further weakened its case.
Implications of the Ruling
This ruling reaffirms Uganda’s commitment to the enforcement of foreign arbitral awards under the New York Convention. It also highlights the judiciary’s stance on ensuring that successful litigants are not unjustly deprived of the fruits of their judgment—particularly in commercial disputes involving monetary awards.
Next Steps
KIU’s appeal to the Court of Appeal remains pending. However, with the dismissal of its stay application, Housing Finance Company is now free to proceed with recovery efforts.
The ruling is expected to set a strong precedent and may influence future cases involving the recognition and enforcement of foreign arbitral awards in Uganda.
