The High Court has significantly raised the fees awarded to a Kampala-based law firm for defending a Libyan investment company in a prolonged dispute over debt recovery commissions.
The decision by Justice Bonny Isaac Teko, originates from a 2011 civil suit where Southern Investments Limited sued the Libyan Arab Foreign Investment Company (LAFICO) for $9.5 million Shs 36 billion) in unpaid commissions. The claim stemmed from an agreement to assist in recovering debts owed by the Ugandan government to Libya.
KSMO Advocates, a Kampala-based firm hired by LAFICO to defend the case, successfully managed the matter but faced challenges in securing payment. After submitting a bill of costs, the court official responsible for reviewing legal fees approved only Shs 112 million for “instruction fees.” KSMO argued this was unjustly low because it had disregarded the legal guidelines for calculating fees based on the case’s value.
In their appeal, KSMO cited the Sixth Schedule of the Advocates (Remuneration and Taxation of Costs) (Amendment) Regulations 2018, which establishes a tiered percentage scale for instruction fees in high-value cases.
For a suit valued over Shs 100 million, fees begin at 15% on the first Shs 2 million, decreasing gradually to 2% on amounts exceeding Shs 100 million. Applying this to the Shs 36 billion claim, the firm calculated they were entitled to Shs 729.22 million.
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Justice Teko concurred, describing the original amount as “manifestly low” and a failure to adhere to the law.
“The taxing master erred in awarding costs as they did not follow the prescribed computation as provided under the regulations,” Teko wrote.
The court noted that LAFICO did not respond to the appeal, leaving KSMO’s claims uncontested. Under Ugandan law, unreplied affidavits are accepted as true if they stand as valid evidence. The costs of the appeal were awarded to KSMO.
Legal experts believe KSMO’s victory could establish a precedent for similar taxation appeals, potentially influencing how foreign clients settle bills in local courts. .
