Uganda’s Court of Appeal has upheld a High Court ruling compelling Imperial Royale Hotel Ltd, owned by businessman Karim Hirji, to refund Shs 5.4 billion to the government for breach of contract related to the 2007 Commonwealth Heads of Government Meeting (CHOGM). The court found that the hotel failed to deliver accommodation and conference facilities as agreed under its contract with the Ministry of Foreign Affairs.
A three-judge panel — Justices Moses Kazibwe Kawumi, Irene Mulyagonja, and Oscar John Kihika — unanimously dismissed the hotel’s appeal. The ruling confirmed that the government had paid for rooms and facilities that were not ready in time for the high-profile summit, holding the hotel liable for refunding the money with 12 percent annual interest from the date of the original filing.
Court Finds Breach of Contract by Imperial Royale
In his detailed 32-page judgment, Justice Kawumi stated, “The evidence showed that the hotel was not ready to receive any guests before November 18, 2007, which amounts to a breach of the agreement.” He emphasized that Imperial Royale failed to fulfill its obligations under the USD 2.56 million (Shs 9.5 billion) contract signed in June 2007.
The judgment also included Shs 800 million in general damages, with 23 percent interest, plus costs incurred in both the High Court and Court of Appeal.
Audit Report Exposes Contract Failures
The court relied heavily on findings from Messrs Johnson & Nyende Certified Public Accountants, who had been hired by the ministry to audit the project. The auditors reported that hotel facilities remained incomplete until mid-November 2007 — weeks past the deadline. Justice Kawumi ruled that this constituted a clear breach, stating that “the government paid for guaranteed rooms which were never available within the agreed period.”
Hotel’s Defense Rejected
Imperial Royale’s reliance on a 24 October 2007 occupation permit was dismissed as lacking “evidential value.” The court also rejected the hotel’s claim that security cordons had delayed completion, and determined that an email from Karim Hirji could not serve as formal notice of readiness.
Justice Kawumi concluded that all grounds of appeal had failed, ordering the hotel to bear costs in both courts. Justices Mulyagonja and Kihika agreed with his reasoning.
Final Liability and Implications
Unless overturned by the Supreme Court, the ruling means that Imperial Royale Hotel, part of Karim Hirji’s Imperial Group, remains liable for over Shs 6 billion in total, including interest and accumulated costs since 2009.
The verdict reinforces judicial accountability for government contracts and highlights the courts’ growing insistence on strict compliance with procurement agreements involving public funds.
