Mao calls for alternatives of freeing Shs8trillion locked in commercial courts

The funds stood at Shs7 trillion in 2021.

Minister Nobert Mao was speaking during a two-day high-level National Summit on Alternative Dispute Resolution in Kampala last week. He said there is a need to embrace Alternative Dispute Resolution (ADR) to free these funds so that they can be utilised to stir growth and development of the economy.

The ADR was rolled out in 2015 to enable the population to resolve their disputes without a trial. ADRs include mediation, arbitration, and neutral evaluation.

According to industry players, ADRs facilitate sustainable growth and boost investment turnover.

Sarah Arapta, the chairperson at the Uganda Bankers’ Association said ADR "breathes new life into the financial sector, providing a beacon of hope for investors seeking resolution without the protracted delays and complexities of traditional litigation."

She said ADR supplement the existing court system as a fast, cost-efficient and less acrimonious alternative. It also provides vital assurance as the best investment destination when commercial disputes are resolved promptly to free capital for more deployment in the economy.

FOLLOW US: Business news, stories, and features every day

Judy Rugasira, managing director at a property management firm, said the real estate sector contributes 12% to the country’s GDP and as such needs quick dispute resolution to facilitate its sustainable growth, "Especially in property valuation in the banking sector."

Wilbroad Owor, the Executive Director at the Uganda Bankers’ Association said there's room to improve ADR, "We want to do business, attract investors and this is possible with a good ADR environment. We should be in alignment with international standards because investors are comfortable in areas that are internationally benchmarked."

In 2020, Francis Gimara, the former Uganda Law Society president, released a report indicating that funds locked up in commercial disputes include some cases that take as long as 15 years to be disposed of.

The trend goes even further back to 2013 when in an annual report, it was indicated that the commercial court division received 2,417 cases of which 1,747 were disposed of. It was reported that the majority of locked-up funds are from cases linked to banks.