High Court Orders MTN Uganda To Pay Ugx11.3 Billion In Landmark Ruling Over Contract Breach & Unfair Competition

By Spy Uganda

In yet another blow to its corporate image, MTN Uganda has been ordered by the Commercial Division of the High Court to pay over Shs. 11.3 billion to VAS Garage Limited in damages, following a damning judgment for breach of contract, unfair competition, and data conversion. The ruling, delivered on April 21, 2025, by Justice Stephen Mubiru, is a potent reminder that even corporate giants must answer to the law.

This latest verdict adds to a growing list of legal and regulatory setbacks faced by MTN Group across Africa, signaling persistent governance and ethical concerns within its operations.

Deal Gone Sour

The legal conflict began in 2014 when VAS Garage, a licensed provider of value-added services (VAS), entered into a revenue-sharing agreement with MTN Uganda. Under the contract, VAS Garage would manage and deliver mobile content to MTN subscribers, with MTN responsible for billing and remitting 40% of the collected revenue.

But in 2015, MTN deleted VAS Garage’s subscriber database, allegedly acting on a directive from the Uganda Communications Commission (UCC). However, both the UCC and the court later clarified that the deletion was unauthorized and in breach of the agreement. The judge ruled that MTN’s actions amounted to a “wrongful expiry” of proprietary subscriber data, and the company unfairly pushed VAS Garage out of the market while bolstering its own VAS platform—MTN Play.

A Pattern Of Controversy

MTN’s courtroom loss in Uganda is not an isolated incident. The telecom heavyweight has weathered multiple storms across the continent, often accused of regulatory breaches, monopolistic behavior, or unethical business practices:

• Nigeria, 2015: MTN Nigeria was slapped with a $5.2 billion fine by the Nigerian Communications Commission (NCC) for failing to disconnect unregistered SIM cards—a penalty later reduced to $1.7 billion after intense legal and diplomatic negotiations. The debacle led to the resignation of the Nigerian CEO and sparked national debates over corporate responsibility.
• South Africa, 2022: MTN faced a backlash and class-action threats when thousands of consumers complained about unauthorized VAS billing—mirroring some of the same issues seen in the Uganda ruling. The company was accused of auto-subscribing users to premium services without clear consent.
• Afghanistan, 2019: The company was named in a U.S. lawsuit alleging it paid protection money to terrorist organizations, including the Taliban, to maintain operations in unstable regions. Though MTN denied wrongdoing, the reputational damage lingered.

These cases—among others—reflect a troubling trend where MTN has been repeatedly accused of exploiting its dominant market position while engaging in questionable practices to protect or grow its revenue.

Justice Mubiru’s ruling in Uganda could serve as a turning point for smaller players in the telecom ecosystem, reinforcing their right to operate without being edged out through unfair competition. The court awarded VAS Garage damages for lost income, unpaid invoices, marketing expenses, and general harm—including interest and legal costs, raising the total payout above Shs. 11.3 billion.

Notably, the judgment emphasized that even in the absence of a functioning Communications Tribunal, the courts have the authority to provide remedies—a crucial precedent in Uganda’s regulatory landscape.