Fred Muwema has come up with flowery legal arguments to mask his latest troubles. However, here are authorities to prove that his arguments are out of depth.
In the matter of Downtown Investments Ltd v M/S Muwema & Co Advocates (HCCS No. 0621 of 2023), Muwema’s exposition on the “option to purchase” (OTP) overlooks critical nuances in Commonwealth contract law, rendering his assertion of a unilateral, binding equitable interest untenable.
While acknowledging the OTP’s historical roots in London & Southwestern Railway Co v Gomm (1882) 20 Ch D 562, where Jessel MR described it as conferring an equitable interest, this principle applies only to options with certain, irrevocable terms.
Here, the lease clause provided a fixed price of USD 2,000,000 only within the first 12 months (expiring December 2015). Thereafter, the price was to be “determined by the market,” lacking any specified valuation mechanism or independent appraiser.
Under English law, adopted in Uganda via the Judicature Act (Cap 13), options must exhibit certainty of essential terms to be enforceable. In Sudbrook Trading Estate Ltd v Eggleton [1983] AC 444, the House of Lords held that an option with flawed price-determination machinery could be salvaged by court intervention. However, absent any machinery—as in this case—the clause devolves into an unenforceable agreement to agree.
Similarly, in Walford v Miles [1992] 2 AC 128, Lord Ackner emphasized that a duty to negotiate in good faith is inherently uncertain and unenforceable, aligning with the court’s finding that no binding sale contract materialized despite the defendants’ 2021 offer of USD 1,050,000, which elicited no counter from the plaintiff.
This OTP more closely resembles a right of pre-emption or first refusal, not a true option. In Pritchard v Briggs [1980] Ch 338 (Court of Appeal), pre-emption rights create no immediate proprietary interest until the grantor elects to sell, distinguishing them from options that bind unilaterally.
Australian authority in Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 reinforces that where price depends on future agreement, no equitable interest vests until terms crystallize.
Uganda’s Contracts Act (Cap 73), Section 10, requires contracts to be formed with free consent and lawful consideration. Here, the post-2015 vagueness precluded formation, as Justice Mutesi rightly held:
“Upon invocation… the Plaintiff was under the obligation to negotiate,” but failure to do so did not retroactively create a vendor-purchaser relationship.
Muwema’s reliance on Kabiito Karamagi v Yanjian Uganda Co Ltd (Misc Appl No 1202/2021) for caveatable interests assumes a valid OTP. But without certainty, no such interest arises.
The court’s refusal to enforce the sale preserved the landlord-tenant dynamic, justifying arrears (USD 148,300), mesne profits, and eviction for trespass post-termination. This OTP, unexercised within the fixed-price window and unresolved thereafter, imposed no compulsion to sell, upholding contractual sanctity over speculative equities.
If you would like your article/opinion to be published on Uganda’s most authoritative news platform, send your submission on: [email protected]. You can also follow DailyExpress on WhatsApp and on Twitter (X) for realtime updates.
