The legal troubles surrounding prominent Kampala law firm M/S Muwema & Co Advocates have deepened after the Court of Appeal ordered the firm to provide US$100,000 (about Shs370 million) as a condition for stopping further execution of a High Court decree arising from its bitter fight with Downtown Investments Ltd over prime Kololo premises.
The order offers the law firm temporary protection from attachment, garnishee and taxation proceedings, but it comes with a significant financial burden and does not reverse the firm’s eviction from its former offices.
The Court of Appeal ruling means Muwema & Co Advocates must now find or secure the equivalent of about Shs370 million within one month or risk losing the protection it has obtained.
Justice John Mike Musisi, sitting as a single Justice of the Court of Appeal, ruled that the firm’s intended appeal raises genuine legal questions deserving consideration by a full appellate panel, but he was equally critical of the firm’s position on the alleged purchase of the disputed property.
The ruling follows a High Court judgment that left the law firm facing a financial decree approaching US$400,000, including US$148,300 in rent arrears, US$224,000 in mesne profits, Shs50 million in general damages, interest and costs.
The dispute centres on the firm’s former offices at Plot 50, Windsor Crescent, Kololo, which it occupied under a lease with Downtown Investments.
The latest decision does not clear Muwema & Co Advocates of the liabilities imposed by the High Court. Instead, it merely pauses execution of the monetary component while the firm’s intended appeal proceeds.
A costly property battle
The dispute began with a lease signed on December 15, 2014 between Downtown Investments and Muwema & Co Advocates.
The agreement provided for annual rent of US$5,500 plus VAT, payable one year in advance, with a 10 per cent rent revision after the first 24 months.
The agreement also contained an option allowing the law firm to purchase the property.
That purchase option would later become the centrepiece of the firm’s defence against Downtown Investments’ claim for unpaid rent and possession of the property.
The relationship deteriorated after the original five-year lease expired in December 2019 without a formal renewal.
The parties nevertheless continued their relationship, with the High Court treating the tenancy as continuing under the existing terms.
Then, on August 2, 2021, Muwema & Co Advocates offered to purchase the property for US$1.05 million.
The offer proposed a 10 per cent commitment fee of US$105,000, with the balance expected to come through bank financing.
But the landlord did not accept the offer.
According to the Court of Appeal record, Downtown Investments’ then-Managing Director acknowledged the proposal but considered the amount below the company’s expectations and indicated that he would consult other stakeholders.
No accepted counter-offer, agreed valuation or concluded sale agreement was subsequently produced before his death in December 2021.
That failure to conclude the transaction has now become one of the most damaging aspects of the firm’s case.
Muwema’s argument: tenancy had ended
Muwema & Co Advocates has maintained that its August 2021 letter amounted to an exercise of the purchase option.
The firm’s position is that once it exercised the option, the landlord-tenant relationship effectively ended and the parties became intending purchaser and vendor.
That argument is crucial because it determines whether the firm remained liable for rent after August 2021.
The High Court rejected the firm’s position.
It held that the option did not allow Muwema & Co Advocates to dictate the purchase price or compel Downtown Investments to accept its US$1.05 million proposal.
The High Court found that the proposed transaction remained subject to negotiation and free consent and that the offer had never been accepted absolutely and unconditionally.
As a result, the court concluded that the tenancy continued and rent remained payable.
The Court of Appeal has now indicated that this question is arguable—but it has also pointed out weaknesses in the law firm’s case.
Justice Musisi said the appeal will have to determine whether Clause 5 created a genuine option capable of unilateral exercise, a right of first refusal or another preferential right.
The appellate court will also have to determine whether the relationship could have changed before the purchase price and other terms had been settled.
Court raises questions over US$105,000 commitment fee
One of the sharpest observations against Muwema & Co Advocates concerns the US$105,000 commitment fee contained in its own purchase proposal.
The Court of Appeal found that the firm had not demonstrated that the proposed commitment fee was ever paid.
Nor had it shown that a market valuation was jointly adopted, that a purchase price was agreed or that Downtown Investments accepted the offer.
Justice Musisi observed that if the firm regarded itself as an intending purchaser rather than a continuing tenant, one would reasonably have expected it to tender the commitment fee it had itself proposed.
That observation could become important when the substantive appeal is heard.
For now, however, the Court has deliberately stopped short of deciding whether the firm’s interpretation of the purchase option is ultimately correct.
The US$130,000 payment controversy
The law firm’s fight over the property is also tied to disputed payments.
Muwema & Co Advocates argues that payments made after it expressed its intention to purchase the property should have been treated as payments towards the purchase rather than rent.
The High Court disagreed.
The Court of Appeal noted that payment instruments presented in the proceedings described the payments as rent or rent instalments rather than the proposed commitment fee or payments towards an agreed purchase price.
The appellate judge nevertheless said the proper characterization of those payments remains a matter for the substantive appeal.
The issue is significant because the High Court ultimately found US$148,300 in rent arrears outstanding.
Muwema & Co Advocates has challenged that finding.
High Court judgment triggered eviction
The February 20, 2026 High Court judgment was a major setback for the law firm.
Apart from the financial awards, the court ordered vacant possession and gave Downtown Investments the right to evict the firm.
The firm subsequently filed a Notice of Appeal and sought a stay of execution.
But while the legal battle was unfolding, Downtown Investments regained possession of the premises on March 6, 2026.
Muwema & Co Advocates described the repossession as a summary and unlawful eviction.
Downtown Investments rejected that characterization, maintaining that it lawfully exercised its right of re-entry under the Landlord and Tenant Act, 2022 and that police and Local Council officials were present during the process.
The Court of Appeal has expressly declined to resolve that dispute in the current application.
This means that even though Muwema & Co Advocates has now secured a stay of monetary execution, it will not be returning to its former Kololo offices as a result of this ruling.
The Court was categorical that possession had already passed and could not be restored through a prospective stay order.
Partners’ property and bank accounts become flashpoint
The latest Court of Appeal intervention was triggered in part by further execution measures against the law firm.
Muwema & Co Advocates told the court that Downtown Investments was pursuing attachment and sale of properties belonging to individual partners and had obtained a garnishee order nisi affecting the firm’s operating accounts.
The accounts identified in the proceedings were held at DFCU Bank, KCB Bank and ECO Bank.
The law firm argued that freezing its operating accounts could paralyse its practice and that attachment and sale of individual partners’ property could cause harm that could not easily be repaired even if the appeal eventually succeeded.
The Court of Appeal accepted this part of the firm’s argument.
Justice Musisi drew a distinction between ordinary recovery of money and the forced sale of specific property.
He found that the threatened sale of identified properties belonging to individual partners had a degree of finality that could not necessarily be cured through a later refund.
The judge similarly found that freezing the firm’s operating accounts could threaten the continued operation of the professional practice in a way that money paid back later would not fully remedy.
It was this narrower form of potential harm that ultimately justified the stay.
But court refuses to shield Muwema from the debt itself
Despite granting protection against further execution, the Court of Appeal rejected the suggestion that Muwema & Co Advocates had demonstrated irreparable harm merely because it might have to pay the money awarded by the High Court.
Justice Musisi said monetary decrees ordinarily do not amount to irreparable harm because money can be recovered if an appeal succeeds, particularly where the judgment creditor is capable of refunding it.
The court found that Downtown Investments’ ability to refund the money had not been seriously challenged.
The judge also noted an apparent inconsistency in the firm’s position: Muwema & Co Advocates had previously characterized some of the disputed payments as money owed to it as part of a purchase transaction, yet was now arguing that repayment of money would cause irreparable harm.
The court therefore refused to halt execution simply because of the rent arrears and mesne profits.
Its intervention was limited to the threatened attachment of specific properties and the freezing of the firm’s operating accounts.
Shs370 million hurdle for Muwema
The reprieve comes at a price.
The Court of Appeal ordered Muwema & Co Advocates to provide US$100,000 as security.
The amount is deliberately substantial but falls short of the entire monetary decree.
Justice Musisi said requiring the entire decretal sum could impose a disproportionate burden on the firm and potentially stifle its appeal.
At the same time, allowing the firm to completely avoid security would expose Downtown Investments to the risk of further delay in recovering the fruits of its judgment.
The US$100,000 figure was also notable because it closely mirrors the US$105,000 commitment fee Muwema & Co Advocates had proposed when offering to purchase the property.
The firm must provide the security within one month, either through a court deposit or an unconditional bank guarantee.
If it fails to comply, the stay automatically lapses.
The legal firm’s biggest battle is still ahead
The Court of Appeal’s decision is therefore a mixed outcome for Muwema & Co Advocates.
On one hand, the firm has avoided immediate execution of a financial decree approaching US$400,000.
On the other, it remains out of the disputed Kololo property and remains exposed to the underlying High Court judgment unless its appeal succeeds.
More importantly, the Court of Appeal has not endorsed the firm’s claim that exercising the purchase option automatically transformed it from tenant into purchaser.
Instead, the judge expressly said that unresolved issues surrounding the option, the disputed payments and the mesne profits must be determined in the substantive appeal.
For Muwema & Co Advocates, the immediate task is therefore twofold: raise the US$100,000 security and prosecute the appeal.
The firm’s failure to meet the security requirement could see Downtown Investments resume execution.
If the appeal eventually fails, the High Court’s financial awards will remain enforceable.
If Muwema succeeds, however, the appellate court could make consequential and restitutionary orders concerning money paid during execution and the parties’ respective contractual rights.
For now, the prominent law firm has secured breathing space—but not victory.
Its former Kololo offices remain in Downtown Investments’ possession, the High Court’s monetary judgment remains intact, and the firm’s claim that its purchase option ended its tenancy is still awaiting a final answer from the appellate courts.
The Court of Appeal has merely ensured that, while that battle continues, the dispute does not escalate into the forced sale of the partners’ identified properties or the crippling of the firm’s operating accounts.
The Court’s latest ruling was delivered on August 11, 2026, in M/S Muwema & Co. Advocates v Downtown Investments Ltd, Civil Application No. 0844 of 2026, and is now the latest chapter in one of Kampala’s most closely watched commercial property disputes.
