The High Court in Mbale has ordered MTN Uganda Limited and ATC Uganda Limited to pay outstanding rent for land in Bulambuli District covering the period between 2013 and 2019, after finding that the companies breached a lease agreement with the estate of the deceased landowner.
In a judgment delivered electronically on October 19, 2026, Justice Lubega Farouq ruled that the companies failed to prove that rent paid into a joint bank account held by the deceased landlord and his son had been authorised by the landowner.
The court directed the respondents to pay rent for the seven-year period within three months, either into the bank account specified in the original lease agreement or an account provided by the administrator of the deceased’s estate.
The judge also awarded the appellant costs of the appeal and the proceedings in the lower court.
The dispute arose from a lease agreement signed on January 2, 2012, between the late Kamungotini Abudu and MTN Uganda for a 20-metre-by-20-metre piece of land at Kapkweni Village, Bulegeni Town Council, Bulambuli District, where a telecommunications mast was to be installed.
Under the agreement, the annual rent was fixed at Shs5 million, payable at the beginning of each year. The initial lease period was 10 years, with provision for renewal for four additional periods of five years each.
However, Kitweyo Muhammed, the administrator of Abudu’s estate, sued MTN in the Sironko Chief Magistrate’s Court, alleging that the company had failed to pay rent between 2013 and 2019 despite repeated reminders.
MTN denied liability, arguing that it had transferred its interests, rights and obligations under the lease to ATC Uganda, which took over ownership and operation of its telecommunications masts, including the installation on the disputed land.
ATC told the court that it acquired the mast on June 20, 2013, and had paid the annual rent for 2013 to 2019 into a joint Equity Bank account held in the names of Abudu and his son, Mafabi Levi.
The company argued that the account change had been requested by Abudu in a letter dated October 17, 2012, reportedly because of his deteriorating health. The payments were therefore made in accordance with what the companies said were the landlord’s written instructions.
Abudu died on October 28, 2012, less than two weeks after the date on the purported account-change letter.
The dispute escalated after Kitweyo obtained letters of administration in 2019 and demanded payment of rent. ATC said it subsequently paid him rent for 2020 and 2021.
The company also told the court that access to the mast had been obstructed by Mafabi, prompting discussions over the administration of the deceased’s estate. According to ATC, an arrangement was reached under which the two brothers would each receive 50 per cent of the annual rent.
The trial magistrate dismissed the suit after finding that the appellant had failed to prove his case on a balance of probabilities. Dissatisfied with the decision, Kitweyo appealed to the High Court.
In resolving the dispute, Justice Farouq examined whether the companies had breached the lease by transferring their interests without notifying the landlord and by paying rent into an account whose change had not been sufficiently established.
The judge found that although clause 16.1 of the lease allowed MTN to transfer or assign its rights and obligations without obtaining the landlord’s consent, it required the company to notify the landlord within a reasonable period.
The court established that ATC acquired the mast in June 2013, but there was no evidence that MTN informed Abudu or his legal representative about the transfer within a reasonable time.
Justice Farouq said the failure to notify the landlord amounted to a breach of the lease agreement.
The court also questioned the authenticity of the letter allegedly authorising the change of bank account. The judge noted that the court record contained different versions of the letter, with some bearing Abudu’s thumbprint while others did not. The documents also contained differing details, and the respondents had not adequately explained the discrepancies.
The judge further observed that the letter was dated October 17, 2012, while Abudu died on October 28 of the same year. Given his reported poor health, the court said there was no evidence establishing that he personally submitted the request or that the companies took steps to confirm that he had authorised it.
The court also found no evidence showing that the contents of the English-language letter had been read or interpreted to Abudu, or that he understood and approved its contents.
Justice Farouq ruled that the respondents had failed to discharge their burden of proving that Abudu had authorised the change of account. Consequently, the payments made into the joint account between 2013 and 2019 could not be treated as rent paid in accordance with the lease.
The judge said the companies could pursue Mafabi for a refund of the money deposited into the joint account if they wished.
The court, however, rejected the appellant’s argument that the trial magistrate’s failure to visit the disputed property had occasioned a miscarriage of justice, noting that the case concerned breach of contract rather than a boundary dispute.
It also observed that the original 10-year lease expired in January 2022. Justice Farouq said the estate’s administrator, in consultation with the other beneficiaries, would have to enter into a fresh lease agreement with ATC if they wished to continue the arrangement.
The judge ultimately allowed the appeal on the key grounds concerning the transfer of the lease and the payment of rent, declared that the respondents had breached the agreement and ordered payment of rent for 2013 to 2019 within three months.
The ruling brings to the fore the importance of verifying changes to payment instructions and complying with notification requirements when transferring contractual obligations, particularly where land agreements involve deceased property owners and their estates.
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