Gym equipment belonging to the defunct Aya Hotel faces attachment and possible sale to recover a debt of approximately Shs259 million owed to an insurance company.
The equipment on the hotel premises was recently cleared for attachment after the Kampala Central Police Station received a court warrant authorising a bailiff to seize and sell movable property belonging to Aya Investments Ltd.
‘Attached here is a copy of a court decree and warrant of attachment and sale of movable property in execution granted by the High Court of Uganda at Kampala (Commercial Division) to Basaija David, a court bailiff, with instructions to attach the property of Aya Investment Ltd,’ the police notice reads in part.
The development follows a dispute arising from insurance policies that Aya obtained from Sanlam General Insurance between 2018 and 2019.
According to lawyers from Irumba and Co Advocates, who represent Sanlam, an earlier attempt by court bailiffs to attach the property about two weeks ago was unsuccessful after the hotel requested a meeting with the bailiffs.
The lawyers said the meeting, reportedly scheduled for last Thursday, failed to take place.
‘We are left with no option but to go back and attach the equipment because Sanlam wants to recover its money,’ Mr Kassim Kyagulanyi, the court bailiff tasked with executing the attachment, said on Tuesday.
He noted that the initial attempt to execute the warrant was complicated by tight security at the Aya premises.
Court records show that Aya obtained several insurance policies from Sanlam, including workers’ compensation and fidelity guarantee coverage.
Sanlam later sued the hotel over its alleged failure to pay insurance premiums amounting to about Shs178 million, despite repeated demands and reminders.
On June 23, 2022, Justice Jeanne Rwakakooko ordered Aya to pay Sanlam $38,773 and Shs33 million.
However, Sanlam later stated that efforts to execute the judgment and recover the money had yielded no results.
The insurer subsequently sought enforcement of the court decree, culminating in the warrant authorising the attachment and sale of Aya’s movable property.
Liquidation attempt
In 2023, Sanlam filed an application before the Commercial Court seeking a declaration that Aya was unable to pay its debts under Section 3(1)(b) of the Insolvency Act, 2011, and requested that the court facilitate the appointment of a liquidator.
Liquidation involves the realization of a company’s assets to settle its liabilities before the company is eventually wound up.
Aya Hotel, once one of Kampala’s most prominent luxury hotels, has faced severe financial difficulties for several years.
In 2023, newspaper advertisements warned that the 296-room hotel could be auctioned over an outstanding loan acquired by businessman Mohammed Hamid from the Industrial Development Corporation of South Africa.
Auctioneers from Armstrong Limited had advertised the property for sale, describing the hotel as a 23-story facility sitting on approximately 32,000 square meters of land.
The hotel was initially constructed as Hilton Kampala ahead of the 2007 Commonwealth Heads of Government Meeting (CHOGM) hosted by Uganda.
It was part of efforts to expand Kampala’s hotel room capacity to 4,000 ahead of the summit, at a time when the country faced a shortage of accommodation for thousands of delegates and visitors.
The facility was later rebranded as Aya Hotel, but it has since fallen into disuse, with its once-prominent status in Kampala’s hospitality industry significantly diminished.