Uganda moves to unlock Shs 700 billion trapped in court battles

Uganda’s Commercial Court has launched an intensive two-week mediation drive aimed at resolving business disputes worth about Shs 700 billion, in what judicial officials describe as a major effort to unlock money trapped in lengthy court battles and ease pressure on the justice system.

The initiative, known as a mediation settlement fortnight, was officially launched on Monday at the Commercial Division of the High Court in Kampala by Principal Judge Lady Justice Jane Frances Abodo.

At the centre of the exercise are disputes involving bank loans and credit facilities, cases that judges say have increasingly overwhelmed the commercial justice system and strained relationships between borrowers, banks and businesses.

Judicial officials say at least 326 cases have already been scheduled for mediation during the fortnight, drawn from more than 700 banking and credit disputes identified as suitable for settlement discussions.

In practical terms, mediation is a process where conflicting parties attempt to resolve disputes through guided negotiations instead of prolonged courtroom litigation. Unlike traditional court hearings, mediation focuses on compromise and mutual agreement, often saving time, legal costs and business relationships.

Justice Abodo said unresolved commercial disputes do more than delay justice. They also affect the wider economy by locking up money that businesses, banks and investors could otherwise use productively.

“For too long our commercial courts have witnessed a steady rise in the volume and complexity of disputes, particularly those emanating from the banking and financial sector,” Abodo said.

She explained that when disputes drag on for years, businesses suffer financially, lending relationships deteriorate and both borrowers and lenders experience emotional and financial strain.

The Judiciary is now attempting to reposition Alternative Dispute Resolution, commonly known as ADR, as a central part of Uganda’s commercial justice system rather than a secondary option.

ADR refers to legal mechanisms such as mediation and arbitration that allow disputes to be resolved outside traditional courtroom trials. According to Abodo, the exercise is being implemented under the new Judicature (Court-Annexed Mediation) Rules, 2026, which introduced major reforms aimed at accelerating dispute resolution.

Under the new rules, mediation cases are expected to conclude within 60 days of referral. The Judiciary will also cover the cost of accredited mediators, removing a major financial barrier that previously discouraged some parties from pursuing mediation.

“Most importantly, any settlement agreement reached under this framework is immediately enforceable as a court order, providing the certainty and finality that parties crave,” Abodo said.

Deputy Registrar Jessica Chemeri said the Commercial Court currently has around 1,700 disputes linked to banking loans and credit facilities, with approximately 737 cases already earmarked for mediation.

“This money is locked up in disputes. Once these cases are concluded, resources are freed, businesses continue operating, and relationships are restored,” Chemeri said.

The cases lined up for the current mediation exercise are collectively valued at around Shs700 billion. To handle the workload, the Judiciary has deployed at least 20 mediators, including judges, retired judicial officers and senior lawyers trained in commercial dispute resolution.

Some sessions are being conducted from chambers and off-site locations to improve efficiency. Professor Andrew Khaukha, Executive Director of the Judicial Training Institute, said the mediation campaign followed a recent Alternative Dispute Resolution colloquium convened by Chief Justice Dr Flavian Zeija and Bank of Uganda Governor Michael Atingi-Ego.

Khaukha noted that Uganda’s Commercial Court is currently handling disputes worth more than Shs3 trillion, making faster settlement mechanisms increasingly necessary.

“Business is about maintaining relationships. The only way to preserve those relationships is to settle disputes amicably through facilitated conversations,” he said.

Commercial banks and traders have welcomed the initiative. The Uganda Bankers Association said prolonged court battles have complicated loan recovery for banks, while traders argue delayed cases threaten business survival.

“One of the challenges has been that some borrowers use courts as a tactic to evade paying loans. But mediation allows parties to sit together and agree on workable payment solutions,” said Joel Naluwairo, Senior Legal Advisor at the Uganda Bankers Association.

Kampala City Traders Association Legal Advisor Joseph Ssevume said quicker dispute resolution could help businesses remain operational while preserving relationships with financial institutions.

“Most cases take long, yet for business people, time is money,” Ssevume said.

The Judiciary hopes at least half of the disputes listed during the mediation fortnight, which runs until May 29, will be resolved successfully.

For businesses struggling with unpaid loans, court battles or damaged commercial relationships, the initiative could offer something Uganda’s justice system has often struggled to provide: faster resolution, reduced legal costs and a chance to continue doing business rather than fighting indefinitely in court.-

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