In a sharp lesson from the High Court’s Commercial Division, a prominent Kampala law firm has found itself on the losing end of the very legal principles it often invokes for others.
On February 20, 2026, Hon. Lady Justice Patricia Mutesi delivered a ruling in Civil Suit No. 0621 of 2023, siding with Downtown Investments Ltd in a protracted property dispute against M/S Muwema & Co. Advocates and its partners, Fred Muwema and Friday Kagoro. The decision did more than settle a rent disagreement — it exposed the dangers of mistaking negotiations for ownership in Kampala’s fiercely competitive real estate market.
The dispute traces back to December 2014, when the firm signed a five-year lease for office space at Plot 50 Windsor Crescent Road in Kololo, one of the city’s most sought-after neighborhoods. The contract was straightforward: a monthly rent of USD 5,000 plus VAT, with a 10 percent annual increment after the first two years. According to the firm, the premises were in poor condition at the time of takeover. They claim to have invested more than USD 186,000 in renovations, believing those improvements would eventually be offset against the purchase of the property.
When the lease expired in 2019, the relationship between landlord and tenant grew strained. The firm remained in occupation, making intermittent payments while relying on a clause that granted it the first option to purchase the building. In August 2021, it formally offered USD 1,050,000 for the property and treated subsequent payments as contributions toward that proposed purchase price.
Downtown Investments rejected that interpretation. Without formal acceptance of the offer, the landlord maintained, there was no sale — only a continuing tenancy with mounting arrears. Demand notices followed. In June 2023, the firm made a partial payment of USD 50,000. Attempts by the landlord to regain possession in May and July 2023 were unsuccessful, leading to the court battle.
In a detailed 28-page judgment, Justice Mutesi dismantled the defense. She held that the lease had been breached through non-payment and unlawful occupation. An unaccepted offer to buy, she emphasized, does not transform a tenancy into a sale agreement. The clause granting the “first option to purchase” provided a right of first consideration — not an automatic transfer of ownership. As for the renovation expenses, the court found no sufficient evidence of prior approval, receipts, or contractual grounding to justify reimbursement or credit.
The financial consequences were steep. The court awarded USD 148,300 in rent arrears and USD 224,000 in mesne profits, calculated at USD 7,000 per month from June 2023 through January 2026. In addition, UGX 50 million was granted in general damages, with interest accruing at 6 percent on arrears and mesne profits and 13 percent on general damages. Altogether, the sum approaches UGX 1.41 billion. The firm was ordered to vacate immediately and hand over vacant possession, failing which eviction would follow.
Beyond the monetary toll, the case resonates as a cautionary tale in Uganda’s expanding commercial property sector. Prime addresses in Kololo command premium rents, and landlords are increasingly assertive in enforcing contractual terms. The judgment reinforces a core principle of contract law: rights must be expressly granted and clearly accepted. Assumptions, informal understandings, or ongoing negotiations offer no shield against explicit lease obligations.
For the law firm involved — long known for handling complex election petitions and corporate disputes — the ruling carries reputational weight. Legal observers suggest an appeal may be filed within the prescribed 30 days, potentially prolonging the dispute. Yet with the eviction order in force, practical realities loom large.
