Judge Patricia Basaza Wasswa ruled the 63 Bridge International Academies provided unsanitary learning conditions, used unqualified teachers and were not properly licensed.
The ruling is a blow to Bridge International which has expanded rapidly since its inception in 2008 offering cheap, standardised, technology-driven education in developing countries in Africa and Asia.
Under the Bridge International model teachers read scripted lessons word-for-word from a tablet computer that also records student attendance and assessments. Gates' and Zuckerberg's foundations are among the company's high-profile backers.
The school authorities have however said they will challenge the court ruling,
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