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Kampala/Bushenyi
Justice Stephen Mubiru on April 21, 2025, delivered a judgment by the Commercial Division of the High Court ordering MTN Uganda to pay VAS Garage Limited over Shs. 11.3 billion in damages for breach of contract, unfair competition, and conversion of proprietary data.
VAS Garage, a licensed value-added services (VAS) provider, in 2014 entered into a Content Provision Agreement (CPA) with MTN Uganda to supply mobile content through UCC-approved shortcodes 6666 and 0800206666.
Under the terms of the agreement, VAS Garage would market, manage and deliver content to MTN subscribers, while MTN would handle billing and remit 40% of collected revenue to the plaintiff.
VAS Garage developed and deployed a content delivery platform, incurring promotional expenses of over Shs. 300 million, and built a subscription database of MTN users who had opted in to receive its services. However, in 2015, MTN unilaterally deleted the plaintiff’s profiled database, citing a directive from the Uganda Communications Commission (UCC) to implement a “Do Not Disturb” (DND) solution aimed at curbing unsolicited messages.
Justice Mubiru found that the deletion was not authorized by the regulator and violated the terms of the CPA noting that MTN Uganda Limited wrongfully ‘expired’ VAS Garage’s subscription databases.
The court further faulted MTN for what it termed unfair competition, noting that while the telecom expelled third-party providers from its billing ecosystem, it continued to operate its own VAS platform, MTN Play, under more favorable terms.
“The defendant misused its dominant position as the custodian of the plaintiff’s keywords and databases to unfairly drive the plaintiff out of business,” Justice Mubiru ruled.
MTN’s defence, which included claims that the dispute was already resolved through the UCC process and that the case was time-barred, was dismissed.
The court awarded VAS Garage Shs. 1.26 billion in interest on unpaid invoices, Shs. 300 million for marketing expenses incurred during the disputed period, Shs. 8.37 billion as loss of income for 29 months of disrupted services, and Shs. 1.39 billion in general damages for conversion and unfair competition.
The judgment also included a certificate of costs for two legal counsel and ordered interest of 19 percent per annum on all monetary awards from the date of judgment until full settlement.
This brings the total judgment award to Shs. 11,328,293,339, excluding the interest which continues to accrue. The court also ordered MTN to pay the full costs of the suit.
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