Uganda’s Court of Appeal has ordered the prominent law firm Muwema & Co. Advocates to deposit $100,000, or provide an equivalent unconditional bank guarantee, within one month, as a condition for blocking Downtown Investments Ltd from collecting on a decree worth close to $400,000. The ruling, delivered by Justice John Mike Musisi, puts a temporary lid on what has become one of Kampala’s more intriguing commercial property fights, but it does so at a price, and that price is non-negotiable.
The Stay and What It Covers
Justice Musisi’s order stays execution of a February High Court judgment that went firmly against the law firm. That judgment included $148,300 in rent arrears, $224,000 in mesne profits, Shs50 million in general damages, plus interest and legal costs. Together, those figures push the total exposure for Muwema & Co. well into the territory of serious financial pain.
The stay is broad. It also covers attachment proceedings, garnishee orders and taxation proceedings, giving the firm breathing room while it prepares an intended appeal. But the protection is conditional and time-limited. If the $100,000 security is not furnished within the stipulated month, the stay automatically lapses, and Downtown Investments would be free to enforce the full decree.
As Justice Musisi explained in his ruling, the security arrangement, as reported by Chimpreports, is designed to preserve both parties’ positions without pre-determining the merits of the appeal or giving Downtown an advance taste of its money. It is a balancing act the court is clearly intent on maintaining.
How This All Began: A Lease in Kololo
The roots of this dispute go back to December 2014, when Muwema & Co. signed a lease for office premises at Plot 50, Windsor Crescent in Kololo, one of Kampala’s most coveted addresses. The rent was set at $5,500 plus VAT, payable a year in advance. That arrangement was fairly standard. What made it unusual was a clause tucked into the lease giving the law firm the first option to purchase the property.
Under that clause, the firm could buy the property for a floor price of $2 million during the first year of the lease. After that window closed, the purchase price would be determined by market value. It is the kind of option clause that looks attractive on paper and can become genuinely complicated when the parties stop agreeing on what it actually means.
The $1.05 Million Offer That Changed Everything
Fast forward to August 2021. Muwema & Co. submitted a purchase offer of $1.05 million for the property, proposing to pay a 10% commitment fee of $105,000 and finance the remaining balance through a bank. Downtown Investments’ then-managing director acknowledged the offer but made clear it fell short of expectations. No agreed price followed. No formal acceptance was ever recorded.
That single exchange has since become the fault line of the entire dispute. Muwema & Co. takes the position that by exercising its purchase option, it ceased to be a tenant at all, effectively stepping out of the landlord-tenant relationship and into the shoes of an intending buyer. If true, that argument would make any subsequent rent demands legally hollow.
Downtown Investments sees it differently. A proposal is not acceptance, and an unaccepted offer leaves the lease intact. Rent, in Downtown’s view, kept accruing the entire time, and the firm’s failure to pay it is precisely what triggered the High Court suit filed in 2023.
What the High Court Decided
When the matter reached the High Court, Downtown Investments sought rent arrears, eviction, mesne profits and damages. Muwema & Co. counterclaimed, pushing for a court order compelling Downtown to honour what it considered a valid exercise of the purchase option. The High Court sided with Downtown in its February judgment, awarding the landlord the full suite of monetary reliefs that now sit at the heart of the appeal.
The February ruling did not just create a financial liability. It sent a signal about how courts are likely to treat disputed option clauses in commercial leases, particularly when the option exercise does not result in a concluded contract. Property lawyers across Kampala will be watching the appeal closely.
Why This Case Matters Beyond the Courtroom
Strip away the legal jargon and what you have is a story about the gap between intentions and binding agreements. The option clause gave Muwema & Co. a right, but exercising a right requires more than writing a letter and naming a price. Commercial property transactions in Uganda, as elsewhere, require offer, acceptance and agreed terms. When one of those elements is missing, the law tends to fill the silence in ways neither party expects.
For businesses operating in Kampala’s premium commercial property market, the case is a sharp reminder that lease clauses, especially purchase options with escalating price mechanisms, need to be drafted with precision and triggered with equal care. A clause that looked like a bargain in 2014 has, twelve years later, produced litigation worth hundreds of thousands of dollars.
For Muwema & Co., the next thirty days are critical. The firm must come up with $100,000 in cash or a bank guarantee to keep the appeal alive and the enforcement machinery paused. It is a significant sum, but the alternative, allowing Downtown to proceed with attachment and garnishee proceedings against a law firm, would carry consequences that go well beyond the financial.
What Comes Next
With the security condition set, the appeal now needs to be formally filed and prosecuted. The core question before the Court of Appeal will likely centre on whether the August 2021 offer constituted a valid exercise of the purchase option and, if so, what legal effect that had on the continuing lease obligations. Those are not easy questions, and the answers could reshape how similar clauses are interpreted across Uganda’s commercial property landscape.
For now, the matter rests in a kind of financial suspension. Downtown Investments holds a decree but cannot yet touch it. Muwema & Co. has a window to appeal, but only if it pays for that window within the month.
The Kololo property at the centre of all this sits quietly at Plot 50, Windsor Crescent, presumably still in use. Somewhere between a $2 million floor price and a $1.05 million counteroffer, two parties found a gap wide enough for years of litigation to walk through. The question worth sitting with is this: when does a right of first refusal stop being a privilege and start being a liability?
