Karuma: the rock in the ground is not a separate asset

Nine landowners at Nora Kamdini in Oyam District won UGX 9.3 billion in the High Court over land taken for the Karuma hydropower project. On appeal in January 2022 that award was quashed and replaced with UGX 203.2 million in general damages.[1][2]

The 98% reduction turned on a single valuation question, and the answer the Court of Appeal gave to it is one every valuer working on quarry, aggregate or borrow-pit land in the region should know.

What the High Court had allowed

The claim arose from land of roughly 8.109 hectares and 6 hectares acquired in 2011–2012 for the project, and was brought in 2015 against the Attorney General and Sinohydro Corporation Limited by Paul Peter Etot, Deo Okello, Kiden Santa, John Paul Omara, Francis Chira, Isaac Otim, Steven Etot, Albert Elwa and Ruth Etot.[1]

Justice Andrew Bashaija awarded UGX 9.3 billion, built as three components: about UGX 1.2 billion for the value of the land, UGX 8.3 billion for rock deposits, and UGX 1 billion in costs.[1] The rock — quarried aggregate, on land beside a major civil-works site — was worth roughly seven times the land it sat in.

The holding

Rocks, sand and clay constitute part of the land and ought not to be valued and compensated separately.

Justices Madrama, Mulyagonja and Mugenyi rejected the separate-valuation methodology outright.[1][2] The principle is orthodox once stated — compensation for compulsory acquisition is for the interest in land, and unextracted minerals are part of that interest, not a second asset sitting on top of it. Value them separately and you count the same thing twice: once as land with development potential, and again as the product that potential would yield.

The practical consequence for a RAP is a rule about what an asset inventory is allowed to enumerate. Standing crops and trees are separately compensable under PS-5[6] because they are severable products of the land with their own maturity and yield. Rock, sand, murram and clay in situ are not. A census that lists "rock deposit" as an affected asset with a quantity and a rate has created an entitlement the law does not recognise, and it will either be paid in error or become a dispute the project loses control of. If the land's mineral potential genuinely affects its worth, that belongs in the land valuation as highest-and-best-use evidence — one number, defensible on comparables.

The second holding, which the project lost

The claimants did not leave empty-handed, and the reason matters more than the sum. The government had already paid about UGX 813 million during the acquisition. The Court awarded general damages for the constitutional breach: compensation should occur before possession, and it had not.[1]

Article 26(2) of the Constitution conditions compulsory deprivation of property on prompt payment of fair and adequate compensation[5]prior to the taking. Karuma is authority that breaching that sequence is independently actionable — the State cannot cure a premature entry by paying later and calling the account square. Damages follow the breach even where the substantive valuation claim fails.

Read the two holdings together and the shape of the case is unusual and instructive: the claimants were wrong about the money and right about the process, and the project was right about the money and wrong about the process. Both sides lost the part of the case their own records could not support.

The part the courts did not reach

Litigation over nine landowners' aggregate is not the main resettlement story at Karuma. Reporting over the following years describes displaced households still awaiting relocation roughly a decade after the taking, including families living beneath high-voltage transmission lines for want of a safer alternative, and a group of affected persons petitioning the President over rates and delay.[3][4]

That is the ordinary asymmetry. A claim large enough and legible enough to attract counsel reaches the Court of Appeal and produces a reported holding. A resettlement commitment to relocate a household produces no cause of action anyone will fund, and so it produces no judgment — only years. The project's own register is the only instrument that was ever going to track the second class, which is precisely why closure of a RAP cannot be defined as the absence of live litigation.

What the register had to carry

• An asset taxonomy with legal backing. Every category in the inventory should trace to the provision that makes it separately compensable. Anything that cannot — rock, sand, clay, murram in situ — belongs in the land valuation, not as a line item.
• Possession date against payment date, per parcel, with the evidence of each. This is the field that decides Article 26(2) exposure, and Karuma shows it generates liability independently of whether the amount was right.
• Highest-and-best-use reasoning recorded once, with the comparables relied on — the approach Guidance Note 5 sets out for exactly this class of dispute[7] — so that a mineral-bearing parcel is valued higher on evidence, rather than valued twice on a theory.
• Relocation commitments tracked separately from payments, with an owner, a due date and a closure document. A household owed a house is invisible in a disbursement report.

What this case does not establish

No free full-text copy of the Court of Appeal judgment could be retrieved — ULII's document URLs refuse automated requests — so the holdings above are taken from two independent contemporaneous reports of the decision rather than from the judgment itself, and the case number is not stated in either.[1][2] Anyone relying on the rock-valuation or possession-before-payment points in advice should read the judgment. The accounts of continuing resettlement delay are advocacy and news reporting, attributed here rather than adopted as findings; this article had no access to any project register. Nothing here is legal advice on Ugandan compulsory acquisition.