Lokwii Tom Choudry (Tommy Choudry)

WHEN THE NETWORK HAS BARS, BUT THE LAW DRAWS THE LINE! MTN Uganda Ltd v Ezee Money Uganda Ltd [2026] UGCA 298 is a fascinating Court of Appeal decision on competition, market power and the limits of commercial muscle. The real lesson? You can defeat a statutory claim and still lose the tort case. 1/ THE BATTLE FOR THE MOBILE MONEY MARKET Ezee Money needed MTN’s telecommunications network to run its mobile money platform. MTN declined to connect it through the third-party aggregator, YO! Uganda Ltd, insisting on direct commercial arrangements. MTN also had exclusivity arrangements with its mobile money agents. The dispute escalated. Evidence showed that agents who continued serving competing platforms were harassed, equipment was confiscated, and some were temporarily detained. YO! Uganda Ltd was also induced to terminate its aggregation arrangement with Ezee Money. The High Court found for Ezee Money, awarding UGX 800 million in general damages and UGX 1.5 billion in punitive damages. MTN appealed. 2/ THE FIRST BIG LESSON: NOT EVERY BUSINESS USING A NETWORK PROVIDES COMMUNICATION SERVICES MTN’s central argument was that Ezee Money operated a payment platform, not a communications service, and therefore could not invoke the competition protections under section 53(1) of the Uganda Communications Act, The Court of Appeal agreed. Justice Geoffrey Kiryabwire reasoned that relying on telecommunications infrastructure does not transform a financial transactions business into a communications service. Ezee Money facilitated payments and money transfers; it was not, on the evidence, in the business of disseminating or interchanging audio, visual or data content as contemplated by the Act. The Court consequently set aside the findings that MTN had breached the statutory duties under sections 53(1) and 56. Why this matters: A business cannot assume that operating through a regulated industry automatically brings it within every protection created by that industry’s legislation. The statutory definition and the nature of the claimant’s actual business matter. 3/ BUT HERE IS WHERE MTN’S VICTORY STOPS! MTN succeeded on the statutory competition-law issue. It did not escape liability altogether. The Court upheld the separate common-law tort of wrongful interference with contractual relations. This distinction is the heart of the judgment: the failure of one cause of action does not necessarily destroy another legally independent cause of action arising from the same facts. Even if the exclusivity arrangements were not expressly prohibited by legislation during the material period, that did not give MTN a licence to enforce them through unlawful means. Harassment, confiscation of property and physical restraint could not be justified merely by pointing to a commercial agreement. In other words, a contract may give a business contractual rights; it does not confer a private police force. 4/ THE MOST IMPORTANT PRINCIPLE: LAWFUL OBJECTIVES DO NOT SANITISE UNLAWFUL METHODS The Court distinguished the underlying exclusivity agreements from the means used to enforce them. That is a critical distinction for commercial law. A business may have a legitimate interest in protecting its investment, brand, agents and commercial arrangements. But the legitimacy of that objective does not automatically legitimise every method adopted to achieve it. The Court found that MTN had induced YO! Uganda Ltd to terminate its aggregation arrangement with Ezee Money and upheld liability for wrongful interference. This is not a blanket ruling that exclusivity agreements are unlawful. Nor does it mean that every commercial decision that disadvantages a competitor amounts to a tort. The crucial question is whether the legal elements of the particular cause of action are established, including the requisite unlawful interference and resulting damage. 5/ MARKET DOMINANCE: A LESSON IN LITIGATION STRATEGY The judgment also contains a useful procedural lesson. MTN attempted to retreat from the admission of its dominant position in the joint scheduling memorandum, arguing that counsel had made a mistake. The Court was not persuaded that MTN could simply disown that agreed position at trial. It upheld the trial judge’s treatment of dominance as an agreed fact. There is, however, an important nuance: the Court’s reasoning on estoppel was not that every statement in a scheduling memorandum automatically creates an estoppel. Rather, it considered the effect of the parties’ agreed position in the context of the proceedings. The practical lesson for advocates: Scheduling memoranda are not decorative paperwork. An admission made at the pre-trial stage can materially shape the evidence a party presents, the case it prepares and the arguments it can credibly advance later. 6/ THE UGX 2.3 BILLION QUESTION: COMPENSATION IS NOT A LICENCE TO GUESS The Court reduced the damages dramatically: 1. General damages: UGX 800 million → UGX 200 million. 2. Punitive damages: UGX 1.5 billion → UGX 100 million. The total fell from UGX 2.3 billion to UGX 300 million. Why? The Court accepted that Ezee Money had suffered substantial business harm, including a reported 79% drop in transactions, 65% of service centres becoming inactive, increased operating costs and reputational damage. But the Court also criticised the trial judge’s reliance on internet financial reports about MTN that had been rejected in evidence. Rejected evidence cannot legitimately become the foundation for assessing damages. That is a vital evidential lesson: the seriousness of a defendant’s conduct does not relieve a claimant of the need for a sound evidential basis for the remedies awarded. Punitive damages may serve a deterrent function, but their amount must still be justified by the evidence and circumstances of the case. 7/ A PROCEDURAL WARNING FOR APPELLATE ADVOCATES The Court also struck out MTN’s generic ground alleging that the trial judge had failed to properly evaluate the evidence. Relying on Rule 86(1) of the Court of Appeal Rules and Attorney General v Florence Baliraine [2013] UGCA 9, the Court emphasised that grounds of appeal must identify the specific errors complained of. Simply alleging that a judge “failed to properly evaluate the evidence” is not enough. An advocate must identify what was wrongly decided and the order sought. An appeal is not a second invitation to tell the entire story. It is a challenge to identifiable errors in the decision below. 8/ THE FINAL TAKEAWAY This judgment is significant because it refuses to collapse three separate questions into one: Does the claimant fall within the protection of the statutory competition regime? Did the defendant independently commit a recognised common-law tort? What damages are justified by the evidence? Ezee Money failed on the first question but succeeded on the second. It retained liability-based relief, but its damages were substantially reduced on the third. That is the real lesson in MTN Uganda Ltd v Ezee Money Uganda Ltd [2026] UGCA 298: the boundaries of a statute may limit a claim, but they do not automatically immunise independently unlawful conduct. Commercial power can be considerable. Legal accountability, however, is not determined solely by who owns the network. Case: MTN Uganda Ltd v Ezee Money Uganda Ltd, Civil Appeal No. 66 of 2016, [2026] UGCA 298 (22 October 2026). #CompetitionLaw #CommercialLaw