Court quashes Igara Tea board, orders fresh elections within six months
BUSHENYI, August 21, 2026 — The High Court in Bushenyi has quashed the sitting Board of Directors of Igara Growers Tea Factory Limited [IGTF], declaring all corporate acts undertaken by the board after August 2025 null and void.
In a judgment delivered electronically by Justice Amos Kwizera, the court ruled in favour of small shareholders of the company [applicants], led by Willis Bashasha, Asuman Batangaya, Ronald Rwankangi and Hannington Katarikwe, ordering the company to convene an extraordinary general meeting [EGM] within six months to elect a lawfully constituted board.
Origin of the legal battle and URSB intervention
The legal dispute arose from a petition filed on October 18, 2025, by smallholder tea farmers and shareholders of the company challenging the legality of the sitting board.
The petitioners cited widespread financial distress, operational mismanagement, unremitted statutory deductions for employees, unpaid green-leaf suppliers and alleged attempts by the outgoing board to prevent the holding of elective annual general meetings [AGMs].
Although the court initially dismissed the petition in May 2026 on the grounds that administrative remedies had not been exhausted, the shareholders subsequently petitioned the Uganda Registration Services Bureau [URSB].
While the administrative review at URSB was pending, the disputed board convened an AGM on June 24, 2026, to confirm newly elected zonal directors.
In a digital ruling issued on July 10, 2026, URSB Registrar Daniel Nasasira referred the matter back to the High Court for an authoritative determination of the validity of the board’s mandate.
“Having carefully considered all the evidence placed on record, notwithstanding the expiry of their mandate, the persons purporting to act as directors of the Company proceeded to convene and conduct the Annual General Meeting of June 24, 2026, without any recourse whatsoever to a court of competent jurisdiction,” Nasasira observed in his ruling.
“The authority of those purporting to convene those meetings was not only actively disputed among the membership but had, on the face of the registered resolution, already lapsed.”
Court dismisses preliminary objections
Before considering the substantive legal questions, Justice Kwizera dismissed a preliminary objection raised by the respondent’s counsel, Innocent Ngoboka of M/s KTA Advocates.
Ngoboka argued that the Registrar of Companies lacked jurisdiction under Sections 169 and 170 of the Companies Act because the four primary applicants held only 5.98 per cent of the company’s shares.
Counsel Kelvin Balyebuga of M/s Hove and Quill Advocates, representing the applicants, countered that the application before URSB was supported by 382 shareholders holding 117,869 shares.
He argued that the Registrar had merely referred a disputed question of law to the High Court rather than ordering a full statutory investigation.
Overruling the objection, Justice Kwizera said the complaints before URSB went beyond an ordinary corporate governance dispute.
“The complaints presented before the Registrar were not confined to the validity of the Board’s tenure or to an ordinary dispute concerning the election of directors,” Justice Kwizera said.
“They included allegations concerning the irregular deduction and non-remittance of employees’ statutory deductions, deductions from employees’ wages which were allegedly not remitted to respective cooperative societies, irregularities in the nomination, vetting, and election of the Board, and failure to pay suppliers of green leaf despite receipt of proceeds from tea sales.”
Court declares board’s mandate expired
The central issue before the court was whether the board’s tenure expired on August 31, 2025.
Justice Kwizera examined a special resolution passed at the company’s EGM on January 31, 2025, and rejected the board’s argument that the resolution merely directed it to commence an election process while its tenure remained protected under Article 77 of the 2011 Articles of Association.
The judge said the board could not selectively rely on provisions of the Articles of Association when convenient while disregarding resolutions previously passed by the company’s general meeting.
“In my view, a party cannot approbate and reprobate in relation to the same instrument,” Justice Kwizera ruled.
“Where the members, having been properly called upon to determine the continuation of the Board, expressly stipulated that the Board was to continue until August 2025, I find it difficult to give that language any meaning other than its literal and plain meaning which limited the mandate of the Board to a specific period of time. The phrase ‘until August 2025’ is temporal and unequivocal.”
The court consequently invalidated all board decisions taken after the August 2025 deadline, including the contested June 2026 AGM.
“The mandate of the Respondent’s Board of Directors, as authorised by the resolution passed at the Extraordinary General Meeting held on January 31, 2025, expired at the end of August 2025,” Justice Kwizera ruled.
“Any acts undertaken by persons purporting to exercise the powers of the Board solely by virtue of that mandate after August 2025 are, to that extent, without authority and therefore null and void.”
Court orders fresh elections
To restore lawful corporate governance at the tea factory, the High Court invoked Section 138 of the Companies Act and ordered that an EGM be convened within six months for the election of a new board.
The court also directed the Registrar of Companies to provide the assistance necessary to facilitate compliance with the order.
“Pursuant to Section 138 of the Companies Act, it is hereby ordered that an Extraordinary General Meeting of the members of the Respondent be convened within a period of not more than six [6] months from the date of this ruling for the purpose of holding an election and putting in place a duly constituted Board of Directors,” Justice Kwizera ordered.
“The Registrar of Companies is directed to provide such assistance and support as may be necessary to facilitate compliance with and implementation of this order.”
The court further ordered that each party bear its own legal costs.
Court rejects selective reliance on company bylaws
In his detailed analysis, Justice Kwizera further held that the company could not alternate between general meeting resolutions and the Articles of Association depending on which position served its interests.
“The Respondent cannot, on the one hand, rely upon a resolution to disregard the said Articles to contend that the tenure of the Board was unlimited and, on the other hand, disregard a resolution and uphold the provisions of the same Article relating to retirement and election when they do not support the Respondent’s position,” he said.
“I therefore find that the Respondent’s own conduct and the resolutions adopted by its members demonstrate that the continued tenure of the Board was subject to the governance arrangements and directions adopted by the members from time to time.”
The judge said the January 31, 2025, special resolution imposed a clear deadline of August 2025, after which the board’s authority to manage the company’s affairs under that resolution ceased.
“In the circumstances, I find that the resolution of January 31, 2025, imposed a limitation upon the continuation of the Board, namely, until August 2025,” Justice Kwizera said.
“The authority conferred by the resolution was not open-ended. Accordingly, upon the expiry of August 2025, the Board ceased to have authority derived from that resolution to continue managing the affairs of the Respondent.”
He added that subsequent actions, including the purported zonal elections in September 2025 and the later confirmation of directors-elect, were undertaken after the board’s mandate had expired.
Court invokes Companies Act to facilitate EGM
The court also addressed the challenge of convening a lawful meeting in circumstances where there was no certified membership register and no duly constituted board capable of calling the meeting.
Justice Kwizera invoked Section 138 [1] of the Companies Act, which empowers the court to order a company meeting to be called, held and conducted in a manner it considers appropriate where it is impracticable to convene the meeting under the company’s normal procedures.
“The present circumstances fall squarely within the purpose of Section 138,” the judge said.
“The Court has found that the Respondent has no duly constituted Board capable of exercising the ordinary powers necessary to convene and conduct the meeting required to regularise the governance of the company.”
He said the appropriate remedy was therefore to facilitate the lawful constitution of the board through a meeting convened under the supervision and authority of the court.
Applicants welcome ruling
Reacting to the judgment, Willis Bashasha, a lead applicant and Director of the NRM Manifesto Implementation Unit, described the ruling as a victory for smallholder tea farmers across Greater Bushenyi.
“It is the farmers of tea that have won the case, not me as an individual,” Bashasha said following the ruling.
“It’s not my personal win; it’s fulfilling to serve humanity. Next is the opportunity to sort the longstanding issue of governance. However, this should come with a forensic audit to determine how we got here to avoid future pitfalls.”
Leonard Beinomugisha, Chairperson of Igara Tea Growers, acknowledged the court’s decision and said he would review the detailed judgment.
“The ruling is a ruling, and I don’t think it will interfere with the decisions we took,” Beinomugisha said. “You just read the ruling so that you can report very well.”
Historical context: Igara’s evolution as an economic pillar
Incorporated on August 12, 1969, under Ugandan law, Igara Growers Tea Factory Limited is a public enterprise owned by more than 7,000 smallholder tea farmers distributed across five operational zones in south-western Uganda.
The factory was established as part of the post-independence government’s poverty-reduction efforts of the 1960s. It initially operated under the Uganda Tea Growers Corporation [UTGC], established by an Act of Parliament in 1966 to process green leaf produced by smallholder farmers in Bushenyi, Buhweju and Sheema districts.
Following decades of operational decline during the political instability of the 1970s, the factory underwent extensive rehabilitation under a European Union-funded 10-year project launched in 1989.
Between 1995 and 2000, as part of the central government’s wider privatisation programme, Igara, together with sister factories Mabale, Mpanga and Kayonza, was fully divested and sold to local smallholder tea farmers, establishing full community ownership.
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