The tallest hotel in Kampala, Pearl of Africa Hotel is up for sale, Court bailiffs announced on Monday.
The five-star hotel which sits at an altitude of 1240 meters above mean sea level, on the leafy Nakasero Hill in Kampala, is owned by businessman Muhammed Hamid, 47
The hotel spans 32,000 square meters and comprises 23 floors, 296 rooms, 37 suites, 2 restaurants, 3 bars, 9 meeting rooms, 15th-floor executive lounges, and a business center with all top-class 5-star amenities.
In a public notice published in Ugandan newspapers on Monday, September 25, Armstrong Limited, government Court Bailiffs, auctioneers, and debt collectors on orders of M/S MMAKS Advocates and ENSafrica Advocates representing Industrial Development Corporation of South Africa Ltd said the hotel will be up for public auction on October 26, 2023 unless the hotel “pays to us the entire outstanding decretal sum (including interest) and our fees and costs before the fall of the hammer at the auction.”
The auctioneers intend to recover a Shs 611 billion debt which Aya Investments owes to the South African lender.
The money is part of the financing contract signed between AYA and the South African entity to finance the construction of the hotel in 2007.
AYA had argued in court that the lender made it hard for them because it would delay the availability of the money, which delayed the project’s completion.
Hamid also cited disputes with the Uganda Revenue Authority on what taxes to pay but also admitted that it was going to be tough completing the construction in time, especially due to Uganda’s landlocked nature.
However, the Court of Appeal recently ruled that the struggling businessman could not appeal the decision, reasoning that courts of law cannot meddle in lawful arbitration processes.
The ruling meant that Aya Investment Limited was restricted from appealing to any higher Court in the matter where the commercial court endorsed the payment of Shs 611b arbitral award to IDC of South Africa Limited.
The Bruce Collins QC Tribunal of South Africa on September 11, 2021, ordered Aya to pay the amount to IDC as an arbitral award.
It comprises a Shs 305b unpaid principal sum that the South African firm passed to the Ugandan businessman 10 years ago according to available documents.
Documents on the court record show that the IDC had applied to the Commercial Court to have the award registered as a decree of the High Court in Uganda.
The development was allowed by Justice Stephen Mubiru, locking the Ugandan businessman in the dispute with the South African company.
Hamid’s efforts to use local courts to frustrate the South African lender are yet to bear fruit as his hotel business continued to collapse.
