The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Great Lakes Energy Company NV, a subsidiary of GL Africa Energy Limited (GLAE), has secured victory in its ongoing legal dispute with its local partners, Bryan Xsabo Strategy Consultants (Uganda) Limited, Mola Solar Systems (Uganda) Limited and Consicara Global Investors Limited over the Kabulasoke Solar Power Project in Uganda owned by Xsabo Power Limited.
Following a protracted legal battle, the High Court Commercial Division of Uganda has ruled in favour of GLE. The ruling has recognised as binding and enforceable the final award made by the London Court of International Arbitration (LCIA) and has affirmed GLE’s right to enforce the final award in Uganda – a major boost to international investor confidence.
In the final award, the LCIA found that GLE’s local partners were in breach of the project agreements by their failure to repay debt due to GLE of US$ 6.78 Million and further by GLE’s local partners’ wrongful misappropriation of substantial funds in excess of US$ 8.66 million belonging to Xsabo. The LCIA awarded GLE damages of US$ 1,188,730, as well as legal costs and the arbitration costs.
GLE applied for recognition and enforcement of the final award in Uganda which was opposed by Xsabo and its partners. The High Court has ruled in favour of GLE allowing them to enforce the final award as a judgment in Uganda.
The Kabulasoke Solar Power Project, a large-scale initiative in GLE’s portfolio, is a 90-acre solar farm approximately 100 kilometres from Kampala. Kabulasoke has been generating electricity for the Uganda national grid since 2018, contributing to Uganda’s energy infrastructure and delivering an increasingly diverse energy mix for Uganda.
Michael Kearns, Director for Great Lakes Africa said: “We are pleased with the ruling. This decision reaffirms our commitment to investing in sustainable energy solutions across Africa and Uganda. We are immensely proud that the Kabulasoke plant is playing a role in diversifying Uganda’s energy mix. Great Lakes costed the project at less $1.2 million per megawatt, far below the market rate at development in support of its sustainable energy solutions agenda.”
In the initial project agreements with Xsabo and its partners, GLE agreed to take up 60% shareholding in the project. However, Xsabo and its partners refused to honour the agreements and unilaterally revoked GLE’s initial shareholding in the Project– essentially dispossessing GLE’s stake.
GLE took the dispute to the LCIA in London, which upheld the project agreements and directed that Xsabo and its partners must enforce the LCIA’s decision with the appropriate regulatory authorities. Xsabo and its partners have not complied with the orders.
In 2023, GLE applied for recognition and enforcement of the first two partial awards from the LCIA. The High Court in Uganda allowed enforcement of part of the awards but declined to enforce a portion of the awards on grounds of public policy. GLE has filed an appeal at the Court of Appeal challenging the portion of the High Court ruling that declined to recognize the first two LCIA awards.
According to the LCIA, throughout the dispute, GLE has been subject to repeated illegal and fraudulent business practises by Xsabo and its partners. This includes the refusal to repay loans made by GLE in the millions of dollars, misappropriation of Xsabo’s funds and refusal to honour the LCIA’s order that Xsabo transfer to GLE 60% shareholding and grant GLE access and control in Xsabo’s bank accounts.
GLE has continually sought to diplomatically resolve the dispute; however, these attempts at an amicable settlement failed with Xsabo partners repeatedly not acting in good faith.
