Wakilii

Crooze FM SMC Ltd v Radio 5 FM Limited and Others (Miscellaneous Cause No. 7 of 2025)

High Court · [2025] UGHCCD 120 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by notice of motion for orders to compel share transfer following alleged share purchase agreement
Decision
Application granted with orders directing transfer of 90 shares to the applicant and directing the Registrar of Companies to effect necessary changes to the company register.

Observed later treatment

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Holding

Court held that parties are bound by the terms of their agreement. Where a share sale agreement required the vendor to transfer shares upon receipt of the first instalment, the vendor's failure to do so constituted breach of contract. Subsequent allegations of mismanagement by the purchaser were independent matters not forming part of the original agreement and could not vitiate obligations that had already accrued. The purported termination after the first instalment payment was invalid. Court ordered the 2nd Respondent to transfer the 90 shares and directed the Registrar of Companies to effect the necessary changes.

Outcome

Application granted with orders directing transfer of 90 shares to the applicant and directing the Registrar of Companies to effect necessary changes to the company register.

Facts

On 19th September 2024, the applicant (Crooze FM SMC Ltd) entered into a share sale agreement with the 2nd respondent (Bakashaba Christopher) for the purchase of 90 shares in the 1st respondent (Radio 5 FM Limited) at a price of UGX 495,000,000. The agreement provided for payment in two instalments: UGX 375,000,000 as the first instalment payable at signing, and UGX 120,000,000 as the balance within three months. Clause 2.4.2 of the agreement required the vendor to transfer the shares to the purchaser upon payment of the first instalment. The applicant paid the first instalment on 19th September 2024 and subsequently paid the balance. The 2nd respondent, however, refused to transfer the shares, claiming that he had terminated the agreement on 9th December 2024 due to alleged misappropriation of funds by the applicant. The applicant filed this application seeking orders to compel the transfer of shares.

Issues

  1. Whether the 2nd Respondent was obliged to transfer 90 shares to the Applicant upon receipt of the first instalment payment under the share sale agreement dated 19th September 2024.
  2. Whether the 2nd Respondent's purported termination of the agreement on 9th December 2024 was valid and effective.
  3. Whether allegations of misappropriation by the Applicant vitiated the 2nd Respondent's contractual obligation to transfer shares.

Orders

  • The 2nd Respondent is directed to transfer the 90 shares sold to the applicant and other necessary documentation giving the applicant such mandate as per the agreement dated 19th September 2024.
  • The Registrar of Companies is directed to effect changes in Radio 5 FM Limited transferring the 90 shares from the 2nd Respondent.
  • The Registrar of Companies is directed to amend the company register to reflect the changes made after the sale of the 90 shares to the applicant by the 2nd Respondent with the consent of the 3rd Respondent.
  • No orders as to costs.

Rules and key headnotes

Contract Law — Binding Effect of Contracts — Obligation to Perform — Accrued Obligations
Where a contract stipulates that the vendor shall transfer shares upon receipt of the first instalment payment, the vendor's obligation to transfer accrues immediately upon such payment and cannot be vitiated by subsequent events or allegations of misconduct by the purchaser unrelated to the terms of the original agreement.
Contract Law — Termination of Contract — Attempted Termination After Obligation Accrued
A party cannot validly terminate a contract after the other party has fulfilled the condition triggering an immediate obligation, where that obligation has already accrued but remains unperformed by the first party.
Contract Law — Sanctity of Contract — Courts' Role
Courts exist to interpret and enforce the obligations of parties under a contract, not to make agreements for them. Where two consenting adults freely enter into a contract, they are bound by its terms.
Company Law — Share Transfers — Judicial Orders Directing Transfer
Where a vendor has received payment for shares under a valid share sale agreement but refuses to effect the transfer, the court may order the vendor to transfer the shares and direct the Registrar of Companies to effect the necessary changes to the company register.

Legislation cited (7)

Cases cited (2)

  • William Kasozi v DFCU Bank Ltd (High Court Civil Suit No. 1326 of 2000)
  • L'Estrange v Graucob Ltd [1934] 2 KB 394

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Crooze FM SMC Ltd v Radio 5 FM Limited and Others (Miscellaneous Cause No. 7 of 2025) [2025] UGHCCD 120 (31 March 2025)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.