The Court of Appeal has ordered M/S Muwema & Co. Advocates to provide security of US$100,000 if it is to maintain a stay on further execution of a monetary decree obtained by Downtown Investments Ltd.
The order was issued in M/S Muwema & Co. Advocates v Downtown Investments Ltd, Civil Application No. 0844 of 2026 UGCA 238, a ruling delivered by Court of Appeal Justice John Mike Musisi on August 11, 2026.
Justice Musisi ordered that execution of the monetary component of the decree—including rent arrears, mesne profits, general damages, interest and costs—be stayed pending the hearing and final determination of Muwema & Co.’s intended appeal.
The law firm has one month from the date of the order to either deposit US$100,000 in court or lodge an unconditional bank guarantee of the same amount issued by a reputable commercial bank. Failure to comply will cause the stay to automatically lapse without further reference to the Court.
The Court declined to reverse or interfere with the eviction and repossession of the premises, noting that possession had already passed to Downtown Investments and the issue had therefore been overtaken by events.
“Execution of the monetary component” of the decree was stayed, but the order expressly does not reverse the already implemented orders for vacant possession and eviction.
The dispute stems from a lease entered into between Muwema & Co. Advocates and Downtown Investments Ltd on December 15, 2014, concerning premises on Plot 50, Windsor Crescent, Kololo.
The lease provided the law firm with an option to purchase the property. In August 2021, Muwema & Co. proposed to purchase the premises for US$1.05 million, but Downtown Investments did not accept the offer.
The law firm nevertheless maintained that exercising the option had transformed the relationship from landlord and tenant into that of intending purchaser and vendor.
Downtown Investments, on the other hand, maintained that the proposal was merely an unaccepted offer and that rent continued to accrue.
The disagreement eventually resulted in High Court Civil Suit No. 0621 of 2023.
In its February 20, 2026 judgment, the High Court held that the parties remained in a landlord-tenant relationship because the proposed purchase had not been concluded. It consequently awarded Downtown Investments US$148,300 in rent arrears, US$224,000 in mesne profits, Shs50 million in general damages, together with interest and costs, while also granting vacant possession and the right to evict.
Muwema & Co. subsequently lodged a notice of appeal and sought a stay of execution.
Justice Musisi found that the intended appeal raises substantial questions that warrant consideration by the appellate court.
Among the issues are the legal effect of the purchase option, whether the law firm’s 2021 proposal effectively terminated the tenancy, how subsequent payments should be characterized, and whether the High Court properly awarded mesne profits.
The judge, however, cautioned that the interlocutory application was not the stage to finally determine those questions.
He also found that the law firm had not demonstrated that the ordinary monetary decree would cause irreparable harm, since the sums could potentially be recovered if the appeal succeeds.
The Court was, however, concerned about threatened execution against individual partners’ properties and the continued garnishment of the firm’s operating accounts, finding that such measures could cause harm that a later refund would not fully remedy.
Muwema & Co. had argued that no security should be required because Downtown Investments had already recovered possession of the premises. Downtown Investments, meanwhile, had sought security equivalent to the entire monetary decree.
Justice Musisi found both positions disproportionate. and Instead, settled on US$100,000, noting that it represents a substantial portion of the US$148,300 rent arrears awarded by the High Court and is close to the US$105,000 commitment fee that Muwema & Co. had proposed when offering to purchase the property for US$1.05 million.
The Court stressed that the security is intended to protect Downtown Investments pending the appeal and does not amount to advance satisfaction of the decree or a determination of the merits of the appeal.
