The Commercial court on January 27 issued a week’s ultimatum to lawyers representing Dei Minerals International and its managing director Mathias Magoola to explain why their client has not remitted $72,437,850 (approx. Shs 268 billion) in legal fees to former Urban Development minister and Kampala lawyer Isaac Musumba.
The money is 30 per cent of the decretal sum of $211,459,500 – Magoola and his Dei Minerals International earned from VIDEOCON INDUSTRIES LTD, a UK-India-based firm for breach of contract; when VIDEOCON refused to return DEI’s mining licenses. DEI lost the licenses, the mines and all income they would have earned from them.
The Commercial court has given Dei and Magoola one week to provide a detailed report on how far they have gone to execute the judgement. Court also wants to know why the law firm; M/S Isaac Isanga Musumba & Co. Advocates has not been paid its legal fees of US$ 72,437,850, which is 30 percent of the decretal sum for representing DEI INTERNATIONAL LTD and Mathias Magoola in this case.
“The matter is adjourned to 9th/February/2022 at 11am to provide a detailed report on the progress of the execution process in London,” Commercial court deputy registrar Dr. Agnes Nkonge said on January 27.
The order comes after Gilbert Nuwagaba, the lawyer representing the former minister (Isaac Musumba) appeared in court together with his client seeking orders compelling VIDEOCON INDUSTRIES LTD Lawyer John Kabandize to show cause why Musumba should not recover his legal fees.
This is based on a consent order the parties entered on 11th/July/2019 before Justice David Wangutsi with parties agreeing that M/S Isaac Isanga Musumba & Co. Advocates is entitled to the said amount, which is about Shs 268 billion.
“And that VIDEOCON lawyers had to deploy their best efforts to recover the decretal amount from the Judgement Debtor and shall keep the respondents [Isaac Musumba] informed and notified of the progress of recovery and matters related in the UK Court,” the consent order reads in part.
However, counsel Kabandize’s feedback tendered in court on Thursday was not satisfactory. He said the matter in which they are seeking to recover the decretal sum was filed in the UK and was still ongoing. He said nothing has been recovered yet. However, Musumba’s lawyer Gilbert Nuwagaba didn’t believe that Counsel Kabandize was telling the truth.
“For the last two years they have kept quiet on the lawyer’s fees for doing work; so, execution has to go on,” Nuwagaba demanded.
Registrar Nkonge asked if the two lawyers had been in touch and whether she should stand it over and give them time to talk. But Counsel Nuwagaba nudged court to demand proof from Counsel Kabandize showing that money has not been paid.
“There’s no document on progress from the case in UK; your client has an obligation to pay lawyer’s fees,” Nuwagaba said.
It is against this background that the presiding registrar adjourned the matter for mention on February 9 to give the judgement debtor’s lawyer benefit of doubt.
“Let’s give him a week to give the Ugandan Court progress of the UK case, we give him a benefit of doubt,” Nkonge ruled.
In 2006, DEI MINERALS INTERNATIONAL LTD and its managing director Matthias Magoola applied and obtained two mining licenses; Kirwa Wolfram mines located in Kisoro district and Mwerasandu Tin mines located in Ntungamo district.
He also acquired a location license in respect of Mwerasandu Tin mines, which he later surrendered to government to pave way for the transfer of licenses to Videocon Natural Resources PLC. So, in that very year 2006, agents of Videocon Industries Ltd, an Indian Company, approached Magoola and made proposals for a joint venture.
They entered into a memorandum of understanding and agreed to form a new company floated in London so as to enable the new entrants to get shares. The parties also agreed that on the incorporation of the new company; Videocon Natural Resources PLC, Magoola would transfer the licenses to Videocon Industries Ltd plus 99 percent of DEI Minerals International Ltd shares to the new company while Videocon was to inject US$ 100 million in the project.
However, Videocon Industries Ltd failed to inject the US$ 100m, which rendered the operations of the mines impotent. They were in breach of their contractual obligations and it was Videocon’s duty to return Dei Minerals International Ltd and Magoola Matthias to their original position before they entered into business with Videocon Industries.
This meant that the plaintiffs (DEI and Magoola) had to recover their mining licenses that had been cancelled by government.
