The Industrial Court has dismissed an application by Crown Beverages Limited, the makers of Pepsi products in Uganda, seeking to stop two former employees from enforcing a Shs622.2 million compensation award, exposing the company’s failure to complete critical legal procedures in its attempt to challenge the ruling.
The Industrial Court has dealt a legal setback to Crown Beverages Limited after dismissing its application for a stay of execution of a Shs622,247,371 award granted to former employees Ketra Aguti and Dickson Asiimwe.
In a ruling delivered on October 29, 2026, the court, presided over by Head Judge Justice Linda Lillian Tumusiime Mugisha, found that the beverage company had failed to satisfy fundamental legal requirements for obtaining a stay of execution pending appeal.
More significantly, the court faulted Crown Beverages for failing to approve a draft decree prepared following the original judgment, ruling that the omission left the company without a legally valid decree upon which to base its appeal.
The decision means Crown Beverages’ application to stop enforcement of the award has been dismissed with costs.
Shs622 million award triggers legal battle
The dispute arises from Labour Dispute Reference No. 215 of 2020, in which the Industrial Court on February 27, 2023, ruled in favour of Aguti and Asiimwe, awarding them a combined Shs622,247,371.
Dissatisfied with the decision, Crown Beverages moved to challenge the award, arguing that the judgment raised substantial questions of law that deserved reconsideration by the Court of Appeal.
The company subsequently approached the Industrial Court seeking orders to suspend execution of the award until the appeal was determined.
Through its company secretary, Melvin Mpambara, Crown Beverages argued that allowing the former employees to collect the money before the appeal was heard would expose it to substantial and irreparable financial loss.
The company also claimed that its appeal had reasonable prospects of success and that the former employees might be unable to refund the money should the Court of Appeal eventually overturn the award.
Crown Beverages offered to provide a bank guarantee of Shs200 million as security for the performance of the decree.
However, the former employees strongly opposed the application.
Former employees expose financial struggles
Aguti and Asiimwe told the court that granting Crown Beverages a stay would prolong the financial difficulties they had allegedly suffered following the dispute.
Aguti disclosed that she was facing a loan recovery case in the Commercial Court, Civil Suit No. 75 of 2023, with commercial interest and penalties continuing to accumulate.
She argued that the compensation awarded by the Industrial Court was necessary to address her financial obligations and that delaying payment would cause her further hardship.
She also undertook to refund the money should Crown Beverages eventually succeed on appeal.
Asiimwe, on the other hand, told the court that he was unemployed and had no source of income following the circumstances surrounding his separation from the company.
He further claimed that his financial position had deteriorated, his credit rating at the Credit Reference Bureau had been damaged, and he was struggling to provide for his family.
He disclosed that Standard Chartered Bank had sued him in Civil Suit No. 201 of 2023 over outstanding loan obligations, with interest and penalties continuing to accumulate.
Both respondents maintained that Crown Beverages had failed to demonstrate that paying the award would cause it substantial financial loss.
Court exposes critical legal mistake by Crown Beverages
In dismissing the application, the Industrial Court focused on whether Crown Beverages had fulfilled the legal conditions for obtaining a stay of execution pending appeal.
The court identified four key requirements, including filing a notice of appeal, demonstrating a likelihood of success, proving that substantial loss would arise if execution proceeded, and filing the application without unreasonable delay.
Although the court acknowledged that Crown Beverages had lodged a notice of appeal with the Industrial Court, it found no evidence that the notice had been filed with the Court of Appeal registry.
Consequently, the company had not satisfied the first requirement.
But the most significant finding concerned the company’s failure to approve the draft decree prepared after the February 2023 judgment.
According to the ruling, Aguti’s lawyers had prepared and forwarded a draft decree to Crown Beverages on March 3, 2023, for approval.
However, the company failed to approve it, explaining that its lawyer, Oscar Kihika, was unavailable at the time.
The court rejected this explanation, observing that Crown Beverages had instructed a law firm rather than an individual lawyer and could not use the absence of one advocate as justification for failing to undertake an essential legal procedure.
“We are not satisfied that this was a justifiable reason for not taking this essential step of approving the decree,” the court held.
The judges emphasised that instructions are given to a law firm and not necessarily to an individual advocate, meaning another lawyer within the firm could have handled the matter.
Court declares appeal legally defective
The Industrial Court went further to explain that an appeal lies against a decree or order rather than the judgment itself.
Under Order 21 Rule 7(2) of the Civil Procedure Rules, a draft decree must be approved by the parties before it is submitted to the registrar for signing and sealing.
The court found that the draft decree in the dispute had neither been approved by the parties nor signed and sealed by the registrar.
It consequently declared the document legally incomplete and unenforceable.
The ruling stated that the draft decree could not provide a valid basis for an appeal.
“It is glaringly clear that the Applicant, having omitted an essential step in preparing the extraction of the decree by failing to approve the draft decree, had no decree upon which to base an appeal,” the court ruled.
This finding became central to the determination of the application.
Shs200m guarantee also questioned
The former employees also challenged Crown Beverages’ proposed Shs200 million bank guarantee, arguing that it was inadequate to secure the full award.
Their lawyer, Brian Emurwon, told the court that the total amount due under the decree had exceeded Shs800 million, with monthly interest reportedly accruing at more than Shs5 million.
He argued that the proposed guarantee could not adequately protect the respondents’ interests if the company eventually lost its appeal.
The respondents further maintained that Crown Beverages had failed to provide convincing financial evidence demonstrating that payment of the award would cripple its operations or cause substantial loss.
Application dismissed with costs
Ultimately, the Industrial Court concluded that Crown Beverages had applied for a stay of execution prematurely because there was no valid decree on record and, consequently, no execution proceedings or imminent execution that could justify the application.
The court noted that even if the application had been filed without unreasonable delay, the absence of a valid decree rendered it premature.
“The application lacks merit and is dismissed with costs,” the ruling concluded.
The decision was delivered by email circulation on October 29, 2026, under the leadership of Justice Linda Lillian Tumusiime Mugisha, with panelists Harriet Mugambwa Nganzi, Fidel Ebyau and Francis Xavier Mubuuke agreeing.
The ruling does not determine the substantive merits of Crown Beverages’ challenge to the original Shs622.2 million award. However, it represents a significant procedural setback for the company in its attempt to prevent the former employees from pursuing enforcement of the Industrial Court’s decision.
