[2025] UGCommC 154

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) CIVIL SUIT NO. 255 OF 2022 RAFIQ SULEMAN ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF** 10 **VERSUS TUGENDE LIMITED ::::::::::::::::::::::::::::::::::::::::::::::::::::::: DEFENDANT BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

#### **JUDGMENT**

#### Introduction

15 The Plaintiff instituted this suit against the Defendant for breach of a contract of employment and/or stock options, specific performance of a stock options contract, interest and costs of the suit.

#### Background of the suit

The suit is premised on the background that on 27th August, 2017, the 20 Plaintiff entered into an employment contract with the Defendant to work as its Financial Analyst. Under the contract, the Defendant offered the Plaintiff an option grant, equal to 1,000 shares of the Company stock. A third of the shares were to vest after one year of employment, with the remainder vesting in instalments every six months thereafter. Each share 25 was to be exercised at a value not greater than USD 7 per share or the local currency equivalent.

That the Plaintiff worked for the Defendant until August, 2019, when he resigned, and at the time, he was entitled to 500 shares, each estimated at USD 50 and now valued at more than USD 25,000. Further, the 30 Defendant verbally offered to buy the shares from the Plaintiff upon

5 resignation, but to date, the Defendant has refused to issue the 500 shares or pay their market value, hence this suit.

In its written statement of defence, the Defendant denied the Plaintiff's allegations, contending that the offer was available as part of the terms of employment and could only be exercised by the Plaintiff during his term

10 of employment.

That the Plaintiff was to accept the offer by paying the contractual consideration or exercise price of USD 7 per share, which he did not and thus is estopped from claiming such a right or option. That when the Plaintiff terminated his employment, the right or option of the Plaintiff to

15 acquire the said shares was forfeited.

The Defendant also averred that the Plaintiff breached the terms of the contract of employment and seeks to recover USD 5,000 (United States Dollars Five Thousand Only), being the pro rata refund for the unutilized amount spent by the Defendant in obtaining a work permit for the Plaintiff.

20 Representation

At the hearing of his case, the Plaintiff was represented by Learned Counsel Frank Twongyirwe of **M/s Natweta & Co. Advocates** and during the hearing of the Defendant's case, Learned Counsel Emmanuel Mucunguzi of **M/s Kyagaba & Otatiina Advocates (Dentons)** appeared 25 for the Plaintiff as his new lawyer. Learned Counsel Ibrahim Kagere of **M/s OS Kagere Advocates** represented the Defendant.

## The Hearing

At the hearing, the parties proceeded by way of witness statements. The 30 Plaintiff proceeded as a sole witness (**PW1**), and the Defendant also

5 presented one witness, Ms. Sylvia Katusiime Kushemererwa (**DW1**), its Human Resource Manager. Both parties also adduced documentary evidence as contained in their respective trial bundles.

The parties filed their written submissions as directed, and the Court has considered the same.

10 Issues for Determination

During scheduling, the following issues were agreed upon for resolution:

- 1. Whether the Plaintiff exercised the option to acquire the shares or paid consideration for the shares in issue? - 2. Whether there was breach of the terms of the employment contract - 15 by either party? - 3. Whether the Defendant is entitled to a refund of USD 5,000, being the money spent on the Plaintiff's work permit for the unutilized period? - 4. What remedies are available to the parties? - 20

Issue No. 1: Whether the Plaintiff exercised the option to acquire the shares or paid consideration for the shares in issue?

## Plaintiff's submissions

Learned Counsel for the Plaintiff submitted that the Plaintiff was willing 25 and ready to pay for the shares that had vested to him during the course of his employment but due to the Defendant's deliberate refusal to avail him with the applicable procedures to exercise the share purchase option, the Plaintiff has not paid the strike price.

That the contract was silent on how the strike price was to be exercised, 30 and the Defendant's CEO did not reply any of the Plaintiff's requests for

- 5 information regarding the treatment of the shares. That in his reexamination, **PW1** stated that he was never given any bank details or share agreement and was informed that a policy would be put in place to guide the exercise of the option. That since the Defendant was still a start-up, the Plaintiff did not exert pressure and was acting in good faith, as he - 10 trusted the Defendant. Learned Counsel also argued that the contract states that upon vesting, the Plaintiff can purchase the vested shares at the agreed price. That the contract did not impose further conditions or limitations on the purchase of the shares.

Citing the case of *Peter Gachenga Kimuhu Vs Kenolkobil Limited*

15 *[2014] eKLR*, Learned Counsel submitted that in a case where the shares have vested, they become absolute, and a consummated benefit, fully owned by the party to whom they vest on the day they vest and cease to be held contingent upon any condition. That in the case of *Robin Tendai Vela Vs Efora Energy Limited (385/2018) [2019] ZASCA 44*, the Court 20 examined the Respondent's company share option scheme, and found that it specifically stated that if the Appellant's employment terminated for a reason not approved by the directors, their options that had not been exercised lapsed. That similarly, in the case of *Joshua Mwaniki Vs Andela Kenya Limited [2020] eKLR*, in finding that the claimant's 25 options had lapsed, the Court considered the exercise clause of the share options agreement, which stated that the employee was required to submit a written notice of exercise and pay the strike price.

To that, Learned Counsel submitted that the employment contract, negotiated and drafted by the Defendant, provided that the Plaintiff could 30 purchase the vested shares at the set strike price but did not provide how to exercise the option, nor did it limit the time to exercise the option. That

5 it did not provide that termination of the contract before the exercise of the option acted as a forfeiture or lapse of the right as alleged by the Defendant.

In conclusion, Learned Counsel submitted that as a result of the breach of the duty of good faith, the Plaintiff has not paid the strike price and that 10 the non-payment of the strike price is a direct result of the Defendant's refusal to perform its duty to provide a policy and guidelines for the payment of the strike price as per the contract.

#### Defendant's submissions

Learned Counsel for the Defendant first defined a stock option contract as 15 one whose terms and conditions must be met before a party can claim rights under such a contract. He then submitted that while the Plaintiff had the option and right under the contract to acquire the 333 shares that had vested for the period that he was an employee of the Defendant, he failed to exercise the option to acquire the said shares, by accepting the 20 offer and notifying the Defendant of his intent to exercise the option and paying the strike or exercise price while, he was still an employee of the Defendant.

That much as the Plaintiff claims that he was always willing and ready to pay the strike price for the vested shares but the Defendant was never 25 willing to issue the shares, no evidence was adduced either by way of letter, email or WhatsApp messages to show that the Plaintiff sought to exercise the option to buy the vested shares and was stopped or frustrated by the Defendant save for an email dated way after he had long terminated his employment.

- 5 That the Plaintiff also contends that he was prevented from paying for the shares because there was no policy in place or known mode of payment. Learned Counsel for the Defendant relied on **DW1's** testimony and contended that **DW1** testified and confirmed that the contract was selfexecuting in nature with no need for additional policies. That for the 10 Plaintiff to claim the shares, he had to be an employee on such a date, the shares had to be vested or available for exercise of the option, and he had to pay the stipulated exercise or strike price. That therefore, there was no policy required so as to comply with any of the stipulated conditions. Learned Counsel for the Defendant also distinguished the cases relied - 15 upon by Learned Counsel for the Plaintiff.

# Plaintiff's submissions in rejoinder

Learned Counsel for the Plaintiff reiterated his submissions above and insisted that the Defendant has not cited any law on which its argument is based. Learned Counsel relied on the cases of *Robin Tendai Vela Vs*

20 *Efora Energy Limited (supra) and Joshua Mwanika Vs Andela Kenya Limited (supra)* for the proposition that the condition that termination of the contract extinguishes the right vested in an employee or that the employee should apply in writing to exercise the option, must be provided for in the share option contract and cannot be inferred outside the 25 contract.

Learned Counsel argued that the above authorities serve to distinguish between the share options contracts considered by the Courts, where they are expressly provided for, and the current case where the Defendant failed to provide for the terms and is trying to import them into the agreement to 30 avoid performance of its obligations thereunder. That the Defendant's

submission that **PEX-1-PEX 4** and **DEX 2A-DEX 2B** are not admissible is

- 5 false and misleading. He added that the WhatsApp messages and emails are relevant to prove that at all times, the Plaintiff's understanding was that he had the option to trade some of his shares in consideration and, therefore, would not have to pay for the shares vested. That **DEX 2B** shows that the Defendant, through its CEO, offered that as an option to the - 10 Plaintiff. That the email is also evidence of the ambiguity of the contract. Further, that as per the case of *Gillespie Brothers & Co. Vs Cheney Eggar & Co. [1896]2 QB 59*, it is trite law that extrinsic evidence is admissible where the terms of the contract are ambiguous. - In conclusion, Learned Counsel submitted that the Plaintiff's failure to 15 exercise the right to purchase the vested shares resulted from the Defendant's bad faith conduct, which the Defendant should not be permitted to benefit from.

# Analysis and Determination

I have considered the pleadings of both parties, submissions and the 20 evidence adduced in resolving this matter.

It is now trite, under **Section 101(1) of the Evidence Act, Cap. 8,** that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts, which he or she asserts, must prove the existence of those facts. (See also **Sections 102, 103** and **104 of the**

25 **Evidence Act,** and the case of *John Bwiza Vs Patrick Yowasi Kadama Court of Appeal Civil Appeal No. 35 of 2011*). The above proof is on the balance of probabilities.

As I delve into the analysis of this issue, I am mindful that it is not the function of the Court to make contracts between parties but rather to 30 construe the surrounding circumstances so as to effectuate the intention

# 5 of the parties. (See: *Omega Bank Plc Vs O. B. C. Limited [2005] 8 NWLR (pt.928)* and *Fina Bank Ltd Vs Spares and Industries Ltd [2000] 1 EA 52)*.

**Black's Law Dictionary 9th Edition on page 1554** defines a stock option as an option to buy or sell a specific quantity of stock at a designated price 10 for a specified period regardless of shifts in market value during the period. In the matter at hand, it was **PW1's** testimony that under the contract of employment **PEX 4** dated 7th August, 2017, the Defendant offered the Plaintiff a permanent compensation package which included a share option grant equal to 1,000 shares of the Company stock, which he 15 accepted. That according to the contract, a third of the shares were to vest after one year of employment, with the remainder vesting in instalments every six months thereafter, and each share was to be exercised at a value not greater than USD 7 per share or the local currency equivalent.

**PW1** further testified that at the time of his resignation from the Company 20 in August, 2019, 500 shares estimated at USD 50 had vested. That he requested the Defendant to issue the vested shares, but the Defendant refused to issue or buy them. That, the Plaintiff and the Defendant were to have discussions on the above, but the Defendant went silent. That before coming to Court, he was always willing to pay the strike price for 25 the vested shares. He added that his resignation from the Company did not take away his contractual right to the vested shares. In proof, he relied on **PEX 6** to **PEX 10**, which are correspondences between him and the Defendant's CEO, Mr. Michael Wilkerson.

However, during his cross-examination and re-examination, **PW1** 30 conceded to have worked for only one year, one month and 22 days and that the vested shares were only 333 not 500.

- 5 In her evidence in chief, **DW1** testified that in the employment contract **PEX 4**, the Plaintiff had an option to acquire up to 1,000 ordinary shares in the Defendant Company. That the said option was subject to the terms and conditions set out in the contract, which, among others, included that; the Plaintiff had to be employed with the Defendant for the period indicated - 10 in the contract and had to remit the agreed strike/exercise price of USD 7 per share or local currency equivalent. That, when the Plaintiff ceased being an employee of the Defendant, he had been employed for one year, one month and 22 days, and at the time, only 333 shares were available to him, but he did not exercise the option. **DW1** added that the Plaintiff 15 has no legal right to claim the shares.

During her cross-examination, **DW1** testified that at the time the Plaintiff joined the Defendant Company, they did not have an employee share option policy, and that the offer given to the Plaintiff was unique, and from the contract, it was self-executing and that there was no need for the policy 20 for only one individual.

During the trial and as reflected in their submissions, the parties agreed that the Plaintiff worked for only one year, one month and 22 days, and that during that period, only 333 of the 1,000 shares vested in the Plaintiff and were to be purchased at the agreed price of USD 7 per share as was

25 provided in **PEX 4**, the employment contract.

Having considered the pleadings, evidence and submissions of both parties, I have noted that each party has its interpretation of the clause that provides for the share option. Whereas the Plaintiff argues that the agreement did not limit the time for purchasing the shares, the Defendant 30 insists that the vested shares were to be paid for during the employment

5 period and that failure to exercise the option deprived the Plaintiff of a legal right in the said shares.

In the case of *Andrew Akol Jacha Vs Noah Doka Onzivua Civil Appeal No.1 of 2014*, **Hon. Justice Stephen Mubiru,** guided that to ascertain the intention of the parties to a contract, the words used by the parties 10 should be given their ordinary meaning in their contractual context. That the Court should construe the contract with a business-like intention or a commercial sense. To that, the Learned Judge quoted the case of *Multi-Link Leisure Developments Ltd Vs Lanarkshire Council [2011] 1 All ER 175*, in which **Lord Hope** held that:

15 "*The Court's task is to ascertain the intention of the parties by examining the words they used and giving them their ordinary meaning in their contractual context. It must start with what is given by the parties themselves when it is conducting this exercise. Effect is to be given to every word, so far as possible, in the order* 20 *in which they appear in the clause in question. Words should not be added which are not there, and words which are there should not be changed, taken out or moved from the place in the clause where they have been put by the parties. It may be necessary to do some of these things at a later stage to make sense of the* 25 *language. But this should not be done until it has become clear that the language the parties actually used creates an ambiguity which cannot be resolved otherwise*."

In the instant case, according to **PEX 4**, the employment contract, the Plaintiff's permanent compensation package included an option grant to 30 shares. The clause states that:

5 "*You will receive an option grant equal to 1,000 shares of the Company's common stock (the "shares"). One-third of the shares will vest after the first year of employment, with the remainder vesting in equal instalments every six months thereafter over the remaining 2 years, provided you are an employee of the Company on such date* 10 *that the shares vest. The exercise or "strike" price will be no greater than \$7 per share, or local currency equivalent*."

My interpretation of the above clause is that the Plaintiff was granted an option to acquire 1,000 shares and the said shares, were conditional to the extent that, they were availed to the Plaintiff provided he was an 15 employee of the Defendant on the date they vested at an exercise or strike price, not greater than USD 7 before owning the same. Therefore, the contract was self-executing.

As portrayed above, 333 shares had vested in **PW1** by the end of his employment with the Defendant, and it was also agreed that the same were 20 to be purchased.

During his cross-examination, **PW1** confirmed that he understood what the clause meant, and when asked whether he wrote to the Defendant to exercise the option to acquire the shares and pay the exercise price, he replied that he did not recall.

25 **PW1** also testified that a call option was an option to buy shares. During his cross-examination, when asked whether he paid for the 333 shares, **PW1** confirmed that the money was not paid. In his re-examination, he reasoned that he was unable to pay because there was no policy in place governing the share option. He added that he could have purchased the 30 shares had he been availed with a share purchase agreement. **PW1** further

5 testified that he followed up the payment in vain, as evidenced by **PEX 6** to **PEX 10**.

I have looked at the said exhibits, which are emails and WhatsApp messages from the Plaintiff to Mr. Michael Wilkerson dated 9th August, 2019, 28th January, 2020, 30th January, 2020, 18th February, 2020 and 10 17th October, 2022, which were sent after the Plaintiff had ceased being an employee of the Defendant. Given the above evidence, it is my finding that the Plaintiff did not exercise the option to pay for the vested shares during his employment with the Defendant.

This, therefore, raises the question as to whether the shares in issue could 15 be purchased after the termination of the contract. According to the Defendant's argument, the shares vested in the Plaintiff were only available during the term of employment. However, the above argument was disputed by the Plaintiff, who insisted that the contract was silent as to when the vested shares could be purchased; hence, he could purchase 20 the same even after his resignation.

I have considered the clause in issue as stipulated in **PEX 4** and find that, though it is clear about the time when the shares were to vest and be acquired, the clause is vague regarding the time limit for payment of the vested shares to the extent that each party has chosen an interpretation

25 in its interest.

However, I have taken into account the fact that the Plaintiff's employment was terminated on 1st December, 2018, upon executing a consultancy agreement with the Defendant as evidenced by **PEX 5**. The said agreement terminated the employer-employee relationship between the parties and 30 maintained the Plaintiff as an independent consultant. According to **PEX**

- 5 **6**, vide an email, the Plaintiff voluntarily terminated his consultancy agreement with the Defendant and requested the Defendant to purchase the shares in issue from him. **PEX 9** confirms that the Plaintiff sought to exercise the option in July, 2019, seven months after the termination of the employment contract on 1st December, 2018. Therefore, in my 10 considered view, given the Plaintiff's conduct and the failure to exercise his share option or pay for the vested shares during his employment amounted to forfeiture of the said shares. I have also considered the authorities relied upon by Learned Counsel for the Plaintiff, in support of the argument. The case of *Peter Gachenga Kimuhu Vs Kenolkobil* - 15 *Limited (supra)* is distinguishable from the case at hand. In that case, the claimant had documentation showing that he had been allocated the shares in issue/ESOP units and the said shares had been paid for under salary expenses. In the case at hand, the Plaintiff did not pay for the shares in issue, nor did he adduce any documentation to prove that the shares in - 20 issue had actually been allocated to him. Also, in the case of *Robin Tendai Vela Vs Efora Energy Limited (supra)* cited with approval in the case of *Joshua Mwaniki Vs Andela Kenya Limited (supra)*, it was held that:

*"… the Appellant's options (share options) had not been exercised at the moment of resignation and therefore they lapsed."*

25 Therefore, in light of the above authorities, and considering that the Plaintiff had not exercised his share option at the time of his resignation, and, further, that the Plaintiff also never paid for the shares at the strike price, I find the said share option to have lapsed.

Consequently, issue No.1 is answered in the negative.

## 5 Issue No. 2: Whether there was breach of the terms of the employment contract by either party?

## Plaintiff's submissions

Learned Counsel relied on **Section 32(1) of the Contracts Act, Cap. 284,** which imposes an obligation on the parties to a contract to perform their 10 respective promises, and **Section 34** of the same, which stipulates that failure to perform as per the contract amounts to a breach. For the definition of breach of contract, Learned Counsel relied on the **Black's Law Dictionary 8th Edition** and the case of *Nakawa Trading Co. Ltd Vs Coffee Marketing Board Civil Suit No. 137 of 1991.*

15 Relating the above to the facts of this case, Learned Counsel submitted that it is agreed that the Plaintiff was employed as a Financial Analyst by the Defendant and that it was also an unequivocal term in the contract that as part of his compensation package, the Plaintiff was entitled to an option to purchase 1,000 shares at a discounted exercise/strike price of 20 USD 7 per share, as soon as they vested following the terms of the contract.

Further, that during the period that the Plaintiff was employed by the Defendant, 333 of the 1,000 shares had vested in him. That during the pendency of the contract, the Plaintiff on several occasions engaged the Defendant on the purchase of the vested shares, but this was always 25 deferred allegedly on grounds that there was no policy and that the alleged policy was being prepared by the Defendant's internal Management.

That it was **PW1's** testimony that he was always ready and willing to pay the strike price, but the Defendant had no policy to purchase the same, and despite repeated promises, the policy was never availed during the 30 pendency of the contract. Learned Counsel referred to **DW1's** testimony

- 5 during cross-examination wherein she stated that the contract did not state how or when the strike price was to be paid, nor did it state that the right in shares vested would be forfeited upon termination of the employment contract. That, **DW1** also confirmed that the Defendant did not have a policy to guide the Plaintiff on how the share purchase option - 10 could be exercised.

Owing to the above, Learned Counsel invited the Court to consider **PEX 6- PEX 9** as evidence demanding that Mr. Michael Wilkerson, the Defendant's CEO, performs the obligations under the contract, which demands were ignored. That, though in its defence the Defendant argued that its refusal 15 to perform its promise under the contract is because the offer was only available as part of the terms of the employment contract and could only be exercised while in the Defendant's employment and that at termination of the employment contract, the Plaintiff forfeited the right to acquire the vested shares; Learned Counsel disputed the same arguing that it is false 20 and contrary to the evidence on record as per **PEX 1-PEX 4**, **PEX 6- PEX 9** and **DEX 2A-DEX 2D**.

On whether the Plaintiff breached the non-disclosure, non-solicitation and non-compete terms of the contract, Learned Counsel submitted that the Defendant did not adduce any evidence at trial to prove any of the above 25 breaches. That in the case of *Kamo Enterprises Limited Vs Krystalline Salt Limited SCCA No. 8 of 2018*, the Court held that a party alleging a claim against another must adduce evidence to prove the veracity of that claim. That therefore, since the Defendant did not adduce any evidence to that effect, then, their claim fails.

30 In summation, Learned Counsel submitted that by failing to have the policy and not availing the procedures to exercise the share option, the

5 Defendant breached the contract by denying the Plaintiff access to the shares vested in him as part of his employment compensation package, for which he was entitled.

## Defendant's submissions

Learned Counsel for the Defendant first defined breach of contract as per 10 the **Black's Law Dictionary 8th Edition page 563** and the case of *Ronald Kasibante Vs Shell Uganda Ltd HCCS No. 542 of 2006*.

That in the instant case, the Defendant did not breach any term of the contract executed with the Plaintiff. That it was confirmed by the Plaintiff during cross-examination that he was paid full salary during the duration 15 of employment and that he willingly terminated his contract. That whether the Plaintiff accepted the share option and exercised it on the vested shares or not did not in any way affect the employment contract as the share option contract was a separate contract within the employment contract, though the share vesting was contingent on the Plaintiff's 20 continuous employment with the Defendant.

Learned Counsel further contended that the Plaintiff cannot legally claim that the share option was part of the consideration payable for his service to the Company as otherwise, there would have been no requirement for the strike price for the vested shares if he had wished to acquire them.

25 That, as per **Section 6(b)** and **6(c) of the Contracts Act**, failure to accept an offer by fulfilling the condition precedent revokes the offer. That the Plaintiff did not exercise the option to acquire the 333 shares that had vested by the time of his termination of employment with the Defendant and the Defendant was under no legal obligation to effect the transfer of 5 the 333 shares and as such, no breach of the employment contract or even the share option contract by the Defendant was occasioned.

#### Plaintiff's submissions in rejoinder

In rejoinder, Learned Counsel for the Plaintiff reiterated his submissions and added that **PEX 1**- **PEX 5** and **DEX 2A and DEX 2B** show that the 10 shares vested to the Plaintiff were part of his compensation package for his services to the Defendant. That the Defendant was obligated to ensure that the Plaintiff realised the benefit. That in failing to do so, the Plaintiff was denied a benefit under the agreement, hence in breach thereof. That the Plaintiff fulfilled all the conditions precedent to the acquisition of the 15 shares.

#### Analysis and Determination

**Section 9(1) of the Contracts Act** defines a contract as an agreement made with the free consent of parties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally 20 bound.

While relying on **Section 91 of the Evidence Act**, **Hon. Lady Justice C. K. Byamugisha** (as she then was) in the case of *William Kasozi Vs DFCU Bank Ltd HCCS No. 1326 of 2000,* stated that:

"*Once a contract is valid, it creates reciprocal rights and obligations* 25 *between the parties to it. I think it is the law that when a document containing contractual terms is signed, then in absence of fraud or misrepresentation the party signing it, is bound by its terms*."

**Section 32 of the Contracts Act** obligates each party to a contract to perform their respective promises. On the other hand, breach of a contract

5 was defined in the case of *Meridiana Africa Airlines (U) Ltd Vs Avmax Spares (EA) Ltd HCCS No. 111 of 2017* to mean a violation of any agreedupon terms and conditions of a binding contract, and this includes circumstances where an obligation that is stated in the contract is not completed on time. That it is the failure, without legal excuse, to perform 10 any promise that forms all or part of the contract, which includes failure to perform in a manner that meets the standard of the industry.

In the matter at hand, the Plaintiff avers that the Defendant breached the contract by refusing to have in place the policy and availing procedures for the exercise of the share option. Also, that the Defendant breached the 15 contract by denying the Plaintiff access to the shares vested in him as part of his employment compensation package, for which he was entitled. On the other hand, the Defendant disputes the breach, contending that the Plaintiff is not entitled to the above shares as he did not purchase them during his employment period.

20 As earlier resolved, the contract, **PEX 4,** was self-executing, therefore, it was not mandatory for the Defendant to have a policy in place for the same to be implemented. This was also confirmed by **DW1**, who, during her cross-examination, informed the Court that there were other employees that were offered the same share option, and no policy was ever enacted 25 since the contracts were self-executing.

Regarding the averment that the Defendant denied the Plaintiff access to the shares vested in him for which he was entitled, as stated above in the resolution of issue No. 1, given the conduct of the Plaintiff and since the Plaintiff neither exercised the option nor paid for the shares, he forfeited 30 the same. The Plaintiff did not express any interest in the vested shares or

effect payment for the shares while in the employment of the Defendant

- 5 and only contacted the CEO about the shares after he had voluntarily terminated his contract. In the circumstances, I find no evidence against the Defendant that hindered the Plaintiff from exercising the option of acquiring the vested shares. Accordingly, I find the Defendant not in breach of the terms of the employment contract. - 10 As to whether the Plaintiff breached the non-disclosure, non-solicitation and non-compete terms of the employment contract, the Defendant did not lead any evidence to the above allegation. As rightly submitted by Learned Counsel for the Plaintiff, a party alleging a claim against another must adduce evidence to prove the veracity of that claim, or their claim - 15 fails. Therefore, the Defendant's claim against the Plaintiff fails.

Accordingly, issue No. 2 is answered in the negative.

Issue No. 3: Whether the Defendant is entitled to a refund of USD 5,000 being the money spent on the Plaintiff's work permit for the unutilized period?

### Plaintiff's submissions

Learned Counsel for the Plaintiff submitted that it is an agreed fact that the Plaintiff was employed by the Defendant, who applied for his work permit following **Sections 48 and 49 of the Uganda Citizenship and**

25 **Immigration Control Act, Cap. 313** and the **4th Schedule Part A, paragraph 8**. That the Defendant paid the required application fee of USD 5,000.

Learned Counsel further submitted that it is the employer's duty to report to the Immigration Authorities within seven days where its employee in 30 respect of whom a work permit was issued, ceases to be an employee as

- 5 provided under **Regulation 21 of the Uganda Citizenship and Immigration Control Regulations, 2004**. That the above was admitted by **DW1** during her cross-examination when she stated that the work permit was applied for under the Company code and the employer had the duty to report the cessation of employment. - 10 That therefore, the fees claimed by the Defendant are statutory fees paid to the Government of Uganda before the issuance of a work permit, and the employment contract did not provide for a refund of the work permit fee. In conclusion, Learned Counsel submitted that the claim is baseless.

# Defendant's submissions

- 15 Learned Counsel for the Defendant submitted that it is undisputed that the Plaintiff came to work for the Defendant on a 3-year work permit from September, 2018 to August, 2021. That the work permit was at a nonrefundable fee of USD 5,000 paid to the Government of Uganda. - However, that in 2019, the Plaintiff unilaterally terminated his agreement 20 with the Defendant and started working with Watu Credit Limited using the same work permit. Learned Counsel contended that ordinarily, the Plaintiff could have returned the Defendant's property, including the work permit, at the termination of the agreement. That, therefore, the Defendant is entitled to a refund of USD 3,333 for the unutilised period of the work 25 permit.

# Plaintiff's submissions in rejoinder

Learned Counsel for the Plaintiff reiterated his previous submissions and emphasized that the Defendant had the authority to have the said permit revoked but it did not and therefore, the Plaintiff is not liable to refund the 30 fees paid to Government for the permit.

#### 5 Analysis and Determination

# **Regulation 21(1) of the Uganda Citizenship and Immigration Control Regulations** provides that;

"*Where the holder of an entry permit class G ceases to engage in the employment in respect of which the entry permit was issued,* 10 *the employer specified in the entry permit shall, within seven days from the date on which the holder ceases to engage in the employment, inform the immigration authority of the cessation of that employment*."

The Defendant herein, who was the Plaintiff's employer, claims a refund of 15 USD 3,333 from the Plaintiff, being the unutilized money for the work permit.

I have considered the above provision and the agreements in issue to establish whether the said money was to be refunded upon termination of the contract by the Plaintiff. However, the agreements do not provide for a

20 refund of the fee used to obtain the work permit at the termination of the contracts.

**PEX 4** and **PEX 5**, the contract of employment and consultancy agreement, respectively, do not provide for any refund of the money upon termination of the contracts. I have also observed that **PEX 5** emphasized

25 that the Plaintiff was working as an independent consultant with no employer-employee relationship between him and the Defendant yet the Defendant never sought for a refund or raised the above claim.

In the circumstances, I find the Defendant's claim baseless.

Accordingly, issue No.3 is answered in the negative.

# 5 Issue No. 4: What remedies are available to the parties?

In his plaint, the Plaintiff sought judgment against the Defendant for;

- a) Breach of contract of the employment and/or stock options. - b) Specific performance of the contract of stock options. - c) Interest at a commercial rate of 25%. - 10 d) Costs of the suit.

# Analysis and Determination

Having found issues No.1 and 2 in the negative, the prayers sought under paragraphs a), (b) and (c) above, therefore, fail.

# 15 Costs

**Section 27(2) of the Civil Procedure Act, Cap. 282** provides that costs of any action, cause or other matter or issue shall follow the event unless the Court shall, for good reason, otherwise order. Further, in the case of *Uganda Development Bank Vs Muganga Construction Co. Ltd [1981]* 20 *HCB 35,* **Hon. Justice Manyindo** (as he then was) held that:

> *"A successful party can only be denied costs if it is proved, that but for his or her conduct, the action would not have been brought. The costs will follow the event where the party succeeds in the main purpose of the suit."*

25 In light of the resolution of the issues above in the negative and the prayers by the Plaintiff and the Defendant in respect of the share option and refund of visa fees, as well as the nature of the employment contract that the parties signed, it is fair in my opinion for each party to meet their costs of the suit.

- 5 Accordingly, the following orders are issued: - 1. *High Court Civil Suit No. 255 of 2022* is hereby dismissed. - 2. Each party shall meet their costs of the suit.

I so order.

Dated, signed and delivered electronically via ECCMIS this **16th** day of 10 **April, 2025**.

Patience T. E. Rubagumya **JUDGE** 16/04/2025