The High Court in Kampala has ruled that Port Bell Supermarkets Ltd cannot pay its debts and granted orders for its liquidation. The ruling means the company’s remaining assets will be sold to settle creditors owed more than Shs10 billion.
The decision was delivered on June 24, 2026 by Hon. Justice Collins Acellam of the Civil Division, following a petition by Allan Luwaga, the company’s Administrator.
The petition was filed under the Insolvency Act, Cap 108, seeking orders to transition Port Bell Supermarkets from administration into liquidation and to appoint Luwaga as liquidator.
Justice Acellam said the petition raised one key issue: whether the company should be liquidated and whether Luwaga should be appointed liquidator.
Court documents showed the company’s liabilities stood at approximately UGX 10,001,804,190. The only remaining merchantable stock was valued at just UGX 10,453,477.
“The disparity between the Company’s liabilities and realizable assets is not merely substantial; it is overwhelming. Such a financial position is wholly inconsistent with the prospect of commercial rehabilitation,” Justice Acellam ruled.
He added that the administration process did not result in a viable rescue plan. “The evidence demonstrates that the administration process did not culminate in a viable administration deed capable of restoring the Company to financial viability. The record shows that the Administration Deed executed during the administration process lapsed upon expiry of the prescribed period.”
Port Bell Supermarkets Limited was incorporated in Uganda in October 2016 and operated as a supermarket chain with branches in Kitintale, Kireka. Over time, the company accumulated substantial debt to trade creditors, financial institutions, and other stakeholders.
As financial difficulties worsened, insolvency proceedings commenced under Company Cause No. 21 of 2025. To preserve value for creditors, the company was placed under administration — a legal mechanism meant to allow rescue or restructuring before liquidation.
Ronald Mutumba was first appointed Administrator and an Administration Deed was executed in August 2025. After Mutumba’s resignation, shareholders appointed Allan Luwaga as incoming Administrator on October 10, 2025. Court then directed Luwaga to review the prior administration, account for the company’s affairs, and engage creditors.
Reports filed by Luwaga painted a grim picture. Liabilities exceeded Shs10 billion while assets were negligible, damaged, expired, or encumbered by a floating charge in favor of Diamond Trust Bank, the principal secured creditor.
Stock verification exercises revealed most inventory had expired or deteriorated. The remaining stock was worth a fraction of the debt and was itself subject to DTB’s charge. The company had no meaningful income stream or unencumbered assets to support restructuring.
Creditors’ meetings during administration concluded that the process had reached its limit. A stakeholders’ meeting directed by court resolved that the company be liquidated and that Luwaga be appointed liquidator.
Justice Acellam noted there was no evidence that continued administration would produce better returns than liquidation. He found no legal basis to depart from Section 154(2) of the Insolvency Act.
“For those reasons, this issue is resolved in favour of the Petitioner,” the judge ruled.
Allan Luwaga was represented by M/s Escala Advocates.
With liquidation now ordered, a liquidator will take control, realize the company’s assets, and distribute proceeds to creditors according to priority under the Insolvency Act.
