The Supreme Court has ordered Vivo Energy to pay Shs 8.5 billion to Thalion International Limited, bringing to a close a decades-long legal dispute over a property located on Benedicto Kiwanuka Street in Kampala.
The origins of the case date back to 1972, when Husenali Nathu Ltd (HNL) entered into an agreement with Shell and BP Uganda Ltd (Shell BP) to develop a piece of land then known as Plot 49 South Street, which was owned by Shell BP.
According to the agreement, HNL was to construct a three-storey building on the property. The ground floor would house a Shell BP fuel station, while the upper two floors would be used as office space by HNL. In exchange, Shell BP committed to transferring the land’s ownership to HNL’s nominees, who would then sublease the ground floor back to Shell BP.
HNL completed the construction and handed over the ground floor on 22nd September 1972. However, the intended transfer of ownership was thwarted by the expulsion of Asians from Uganda under President Idi Amin. Although HNL’s nominees were Ugandan citizens, their Asian heritage led to their forced departure from the country, making the land transfer impossible at the time.
Despite this, Shell BP continued to occupy the entire property from 1972 to 1990—operating the fuel station and renting out the upper floors. The number of tenants and the rental income generated during this period became key points of contention in the legal proceedings.
Between 1989 and 1990, Amirali H. Nathu—one of the original nominees—returned to Uganda and began discussions with Shell (Uganda) Ltd, Shell BP’s successor, to resolve the dispute. After negotiations failed, HNL’s nominees filed a case in the High Court in 1993, seeking the transfer of land ownership and an accounting for rent collected.
In 2001, Shell agreed 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, disagreements over unpaid rent and compensation persisted, prompting further legal action.
In 2006, HNL’s nominees assigned their interests to Mercator Enterprises Ltd (MEL), which continued the litigation. MEL filed a High Court application seeking to recover rent and mesne profits—compensation for the unauthorized use of the property.
The Court of Appeal later awarded MEL Shs 154.8 million in mesne profits and Shs 50 million in general damages. However, the Supreme Court found this 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 ruling stated.
The Supreme Court’s final decision awarded a total of Shs 8.5 billion—comprising Shs 8 billion in mesne profits and Shs 500 million in general damages—to Thalion International Ltd, which had inherited the legal claims originally pursued by MEL.
