The High Court Commercial Division has ordered Mr Tasty Limited, a fast-food company, to pay Shoprite Checkers (U) Limited Shs39.5 million in damages and repair costs following a fire that destroyed its rented premises at Shoprite Kampala.
Justice Susan Abinyo ruled that Mr Tasty breached the lease agreement by failing to obtain insurance cover as required under the contract.
The court ordered the company to pay Shs19.557 million, being the cost of repairs to the premises, and Shs20 million in general damages.
The court also awarded Shoprite interest at 17% per annum on the repair costs from the date the suit was filed until full payment, and six per cent per annum on the general damages from the date of judgment until payment in full. Mr Tasty was further ordered to meet the costs of the suit.
The dispute arose from a lease agreement under which Mr Tasty rented Shop No. 6 at Shoprite Kampala on Plot 2 Ponsonby 1, 3 and 5 Ben Kiwanuka Street for three years at a monthly rent of USD 5,482.35.
On July 2, 2018, a fire broke out at the premises, destroying Mr Tasty’s stock and equipment, including fridges, deep freezers, billing machines, CCTV equipment and food warmers.
The Uganda Police Directorate of Fire Prevention and Rescue Services investigated the incident and attributed the fire to a short circuit.
Shoprite subsequently took possession of the premises and undertook repairs. Mr Tasty later notified the company that it would vacate the premises, arguing that the fire had frustrated the lease and made it impossible to continue operating from the premises.
Shoprite, however, sued for rent arrears, repair costs and other remedies, arguing that Mr Tasty had breached the lease by failing to insure the premises and by leaving before the expiry of the agreed term.
In her judgment delivered on August 3, 2026, Justice Abinyo found that Mr Tasty had breached the lease agreement by failing to obtain the required insurance.
“This Court finds that the Lessee had to take out an insurance cover, however this was not done by the 1st Defendant. Accordingly, this Court finds that failure by the 1st Defendant to take out an insurance cover under clause 39 of the Lease Agreement was breach of an obligation by the 1st Defendant under the said agreement,” she said.
On the repair costs, the judge relied on Clause 24.3 of the lease, which required the tenant to pay costs incurred by the landlord in carrying out necessary repairs.
“For the above reasons, the 1st Defendant is held liable for the costs incurred by the Plaintiff in the repairs of the suit premises pursuant to Clause 24.3 of the Lease Agreement,” Judge Abinyo held.
However, the court rejected Shoprite’s claim for USD37,466.42 in rent arrears, ruling that the company had failed to prove that the fire was caused by Mr Tasty’s fault.
The judge noted that the police fire report attributed the incident to a short circuit and that Shoprite had not independently investigated the cause of the fire.
“For the foregoing reason, this Court finds that the Plaintiff did not adduce any evidence to prove that the fire outbreak was solely due to the Plaintiff’s fault so as to render the 1st Defendant liable in rent arrears during the repairs of the suit premises,” Justice Abinyo ruled.
The court also found that Shoprite had not properly pleaded negligence against Mr Tasty and therefore could not base its decision on an unpleaded issue.
The judgment was entered against Mr Tasty Limited and its Managing Director, Hassan Ashraf Kalair, who had signed the lease as guarantor.
