The Supreme Court has ordered Vivo Energy to pay Thalion International Limited Shs 8.5 billion in profits following a decades-long dispute over a property on Plot 49 Benedicto Kiwanuka Street.
The case originated from a 1972 agreement between Hasanali Nathu Limited (HNL) and Shell and BP Uganda Ltd, predecessors to Thalion and Vivo Energy respectively.
According to the court document, “Shell and BP Uganda Ltd (Shell BP) entered into a contract for the development of a piece of land then known as Plot 49 South Street, Kampala owned by Shell BP.”
HNL was to construct a building with a fuel station on the ground floor and office units on the upper floors, with Shell BP agreeing to transfer ownership of the land to HNL’s nominees.
Despite HNL fulfilling its obligations, the suit land was not transferred until 2001, following a consent order.
However, disputes persisted over the rent collected by Shell (later Vivo Energy) from the property between 1972 and 2001. Thalion, as HNL’s successor, sought profits and damages, arguing that Vivo Energy wrongfully withheld possession and failed to account for rents.
The Supreme Court found the Court of Appeal’s earlier award of Shs 154,795,381 as profits to Thalion was “extremely low and unfair in the circumstances.
Justice Musota, in the lead judgment, noted: “The Court of Appeal ought to have considered the evidence as a whole instead of selectively choosing one part of the evidence of the offending party.”
The court rejected Vivo Energy’s valuation reports, which were “riddled with errors,” and adopted Thalion’s valuation.
The court awarded Shs 8 billion in mesne profits, citing the respondent’s “dishonest and untransparent defences” and refusal to settle accounts.
Additionally, Shs 500 million was awarded as general damages due to the “inconvenience of pursuing its money for 30 years.”
The Supreme Court also dismissed Vivo Energy’s cross-appeal, which argued the property was expropriated during the 1972-1973 Asian exodus under Idi Amin’s regime.
“The learned Justices of Appeal neither erred in law or fact in holding that a property was not subject to expropriation,” the court ruled.
Thalion International was awarded costs for the appeal and proceedings in the lower courts.
