The Supreme Court has ordered Vivo Energy to pay Shs 8.5 billion to Thalion International Limited following a decades-long legal battle over a property located on Benedicto Kiwanuka Street in Kampala.
The case originates from a 1972 agreement between Husenali Nathu Ltd (HNL) and Shell and BP Uganda Ltd (Shell BP) to develop land then known as Plot 49 South Street, owned by Shell BP.
Under the contract, HNL was to construct a three-storey building. The ground floor would host a fuel station for Shell BP, while the upper two floors were designated for office use by HNL. In return, Shell BP agreed to transfer ownership of the land to HNL’s nominees, who would then sublease the ground floor back to Shell BP.
HNL fulfilled its part of the agreement and handed over the ground floor on 22nd September 1972. However, the planned transfer of ownership was derailed by the expulsion of Asians from Uganda under President Idi Amin. Although HNL’s nominees were Ugandan citizens, they were of Asian descent and were forced to leave the country, making the land transfer impossible at the time.
From 1972 to 1990, Shell BP continued to occupy the entire property—operating the fuel station and renting out the upper floors. The number of tenants and the amount of rent collected during this period remained contentious throughout the court proceedings.
Between 1989 and 1990, Amirali H. Nathu, one of the original nominees, returned to Uganda and initiated discussions with Shell (Uganda) Ltd, Shell BP’s successor, to resolve the ownership and rental issues. After failed negotiations, HNL’s nominees filed a case in the High Court in 1993, seeking accountability for rent collected and the formal transfer of land ownership.
In 2001, Shell consented to transfer the property, which was formalized in a High Court consent order dated 18th May 2001. The land was officially transferred on 15th June 2001, and Shell vacated the upper floors on 19th January 2002. However, no agreement was reached on the rent arrears, prompting further legal action.
In 2006, HNL’s nominees assigned their interests to Mercator Enterprises Ltd (MEL), which continued the litigation and filed a miscellaneous application in the High Court seeking recovery of rent and mesne profits (compensation for unlawful use of the property).
The Court of Appeal had earlier awarded MEL Shs 154,795,380 in mesne profits and Shs 50 million in general damages. However, the Supreme Court ruled that the figures were insufficient.
“The Court of Appeal had awarded the appellant Shs 50 million as general damages, which is about 32% of what it had awarded as mesne profits. I, however, find an award of Shs 500,000,000 as general damages fair and adequate in the circumstances of this case,” the Supreme Court stated.
The final award totals Shs 8.5 billion, consisting of Shs 8 billion in mesne profits and Shs 500 million in general damages, marking a major legal win for Thalion International Ltd, which now holds the rights originally pursued by MEL.
