BusinessE.A Live NewsFeatures

East African Court: Seizure, Auction of Rwanda’s UTC Mall was Illegal; Rujugiro to be Compensated

The East African Court of Justice (EACJ) has ruled that the process leading up to the takeover and auction of Union Trade Centre (UTC) in Kigali by the Rwandan government was tainted by illegality, lack of accountability and transparency.

“A declaration is hereby issued that respondent’s (Rwanda) actions of taking over UTC Mall and subsequently selling it off are illegal and contravenes articles 5(3)(g)… of the treaty,” ruled the court comprising Justices Monica Mugenyi, Charles Nyawello and Charles Nyacae on November 26.

Court also directed government to pay UTC Mall proprietor, Tribert Rujugiro $500,000 in damages and also furnish him with “accountability for the rental and sale proceeds realized from the UTC Mall between 1st October 2013 to 27th September 2017.”

The EACJ ruled that “in terms of compensation, where injury to a complainant is not made good by restitution, the state responsible for a wrongful international act is obliged to pay compensation. In this case, since the UTC mall cannot be returned to the applicant (Rujugiro), we would grant the claim for compensation as provided under Article 366 (1) of the ILC Articles on State Responsibility.”

The mall was in 2017 sold by government to Kigali Investment Company (KIC) in 2017 at $6.8m.

Rwanda took over UTC, Rwanda’s largest shopping mall, in 2013 on grounds that that it owed $1.4 million in tax.

ChimpReports understands Rwanda government’s Commission of Abandoned Properties informed all UTC tenants in a letter dated Oct. 1 to deposit their rent into the Commission’s bank account, effective immediately.

The UTC, which opened in 2006, is home to 81 shops, restaurants and other retail establishments. The commercial hub, according to Rujugiro, is valued at $20 million (USD).


Rujugiro who represented UTC sued the Government of Rwanda on behalf of the Company, challenging the government of Rwanda at the East African Court of Justice (EACJ) over alleged illegal seizure and auctioning of the Mall. He lost the first round in court before lodging an appeal.

“Why else would the government seize the UTC?” Rujugiro asked in 2013.

“This is a government that has said it wants to reduce its dependency on foreign aid and grow its private sector. This is a very dangerous move and sends a terrible message to current and future investors.”

Rwanda’s defence

The Rwandan government said the mall was an abandoned property because Rujugiro, who is also the UTC’s largest shareholder, lived in South Africa then and had not paid taxes.

As at 2nd October, 2013, when government took over the UTC Mall, Rujugiro said he had never received any notification of tax arrears from Rwanda Revenue Authority (RRA).

Kigali argued that it took over neither UTC nor the UTC mall, but only assumed control and management of Rujugiro’s shares.

However, the EACJ ruled that this remained “unproven” amid Rujugiro’s “unassailable evidence” of the state’s take-over of the mall.

Kigali said the shares had been abandoned by Rujugiro given that he did not designate anyone to take control of them, hence their assumption by the state.

Tribert Rujugiro

Yet, said court, the shareholders had taken a decision to consider the option of “having recourse to courts of law if possible for purposes of safeguarding the interests of the company.”

The Rwandan government argued that its actions were grounded in due process and RRA had valid reasons for auctioning the UTC Mall.

It also argued that Rujugiro, being a shareholder, did not have the locus standi to challenge the takeover of the mall.

However, court ruled that Article 27 of the EAC treaty provides that, “any person who is resident in a partner state may refer for determination by the court, the legality of any Act, regulation, directive, decision or action of a partner state on an institution of the community.”

Court also held that the mall fetched a monthly rental in the sum of $120,000 which would translate to $5.6m from the take-over to date, which would have been sufficient to off-set the $1.1m that was allegedly due in taxes.

Rujugiro argued in court that neither RRA nor Rwanda disclosed the procedures that had underpinned the auction of the UTC mall to the Kigali Investment Company; what sale price it attracted or how the said proceeds had been utilized.

Abandoned property

The court ruled that the Commission which took over the mall is “empowered by internal law to exercise governmental authority in respect of national tax administration” – making the state liable for the Commission’s actions.

Court held that while ‘abandoned property’ in article 2(4) of Law No. 28/2004 entails property that was abandoned into the hands of persons that do not own it; in the instant case, the Commission took over the UTC mall, well knowing that its owners were resident in Rwanda.

The judges further determined that although the Rwandan law emphasises honesty and competence in the management of abandoned properties, such properties to be returned to their owners upon being reclaimed; “the circumstances surrounding the appropriation, management and disposal of the UTC mall speak to the contrary.”

The court concurred with Rujugiro, who was represented by Ugandan lawyer Francis Gimara, that  the mall “was taken over in a manner so opaque that no notice was given to its known owners; only for it to be grossly mismanaged by the Commission, resulting in its auction on account of disputed debt that could have been paid off my the mall’s income.”

Court held that free trade and right of establishment that underpin a common market would only flourish in an environment of rule of law, transparency and accountability; one that enhances and strengthens partnerships with the private sector to create a vibrant market upon which regional trade would be anchored.

“It is that spirit that article 8(1)(c) of the treaty enjoins partner states to abstain from any measures that are likely to jeopardize the achievement of the treaty’s objectives or indeed its implementation,” the judges ruled.

Court said the UTC mall did not amount to property that had been abandoned following the 1994 genocide simply because Rujugiro lives abroad and that government should not have illegally redirected the tenants’ rent elsewhere as Rujugiro had management which was known.

The judgement could encourage other businessmen who have previously accused Kigali of illegally taking over their properties to seek for restitution in courts of law.

Bad blood

Rujugiro was a strong ally and economic adviser of President Kagame during the RPF struggle and its aftermath.

The tycoon would later fall out with the establishment before fleeing to South Africa.

The state has since linked Rujugiro to dissident Rwanda army officers exiled in South Africa especially Gen Kayumba Nyamwasa and departed ex Intelligence chief, Col Patrick Karegeya.

In 2011, Rwanda National Police seized eight heavy trucks belonging to Congo Tobacco Company (CTC) in which Rujugiro is a major shareholder. The company is based in the eastern Democratic Republic of Congo (DRC).

Then police spokesperson ACP Theos Badege said the force acted on intelligence showing the trucks were supporting what he described as ‘terror activities’ spearheaded by Nyamwasa and Karegeya.

Rujugiro has since denied the accusations, saying he is a victim of a political witch-hunt.

Back to top button
Translate »

Adblock Detected

Please consider supporting us by disabling your ad blocker