The Court of Appeal will tomorrow (Wednesday) deliver its decision over a case in which DTB Limited is challenging last year’s High Court orders that outlawed the loan advanced to businessman Hamis Kiggundu through his Ham Enterprises.
Court of Appeal judges led by Deputy Chief Justice Richard Buteera will deliver its judgement in the ongoing session.
After hearing the case early this year, the judges said that they will deliver their decision notice.
Other judges are Kenneth Kakuru and Christopher Madrama.
DTB Uganda and DTB Kenya went to the Court of Appeal against Ham Enterprises, Kiggs International Limited and Mr Kiggundu following an October 12 2020 judgment of the Commercial Court which ordered the bank to refund US$23.2m and UGX34 billion to Mr Kiggundu.
Through their lawyers, the banks are seeking to reverse the High Court judgment reasoning that transactions were lawful.
They also say that DTB in Uganda acted lawfully and that it was not an agent for their Kenyan counterparts.
But Ham Enterprises, through their lawyers, instead asked the Court to uphold the judgment citing illegalities committed by the bank.
They also accuse the bank of withdrawing UGX120 billion from his accounts without his consent.
DTB is represented by Kiryowa Kiwanuka of K& K Chambers while Ham Enterprises is represented by Fred Muwema of Muwema and Company Advocates.
Justice Henry Peter Adonyo of the Commercial Court had ruled that the money was illegally drawn from Mr Kiggundu’s accounts for repayment of loans the bank lent to him illegally.
The court also ordered the bank to return all property that Mr Kiggundu had mortgaged for the loan.
Robinah Siima, FINCA Uganda CFO: Quiet Discipline and the Evolution of Finance to Strategic, Human ImpactBut Principal Judge Dr Flavian Zeija halted the implementation of the orders reasoning that the case involves a substantial amount of money where if the refund is not halted, the possibility of losing the mortgages is very high which would create hardships should the Court of Appeal overturn the lower court’s decision.
“The applicants are banks with an international presence and given the amounts that they lent to the respondents, they are liquidated enough to meet the obligations under the decree should the appellate court confirm the judgment entered against the respondents by this court,” Justice Zeija noted.
The Principal Judge reasoned that if the Commercial Court orders were not stayed, the banks could suffer irreparable damage because Mr Kiggundu only needed to extract the court judgement and serve the registrar of land titles and have the mortgages released.
He said the decision of the High Court Commercial Division has far reaching implications on the banking industry in as far as it declares syndicated loans illegal.
Currently, Ham Enterprises cannot commence the recovery process of the aforementioned money from the bank as earlier ordered by Justice Adonyo until the pending appeal against his orders has been concluded by the Court of Appeal.
Court also ordered all parties to address issues which includes on to weather an illegal contract can sustain a suit, can a judge originate a final judgement and decree while filing their written submissions.
Earlier orders
Justice Peter Adonyo had ordered Ham Enterprises to recover UGX34 billion and US$23.2 million being monies that were deducted by the banks from Ham’s accounts.
He also declared that DTB Kenya is not licensed to conduct financial business in Uganda and therefore the loans given to Ham Enterprises were irregular, null and void.
The court also cancelled the mortgages and ordered the banks to return the property to Ham reasoning that the loan transactions were illegal.
The properties which Ham Enterprises provided as security for the loans include several properties at Kyadondo, Kawuku, Victoria Crescent 11 and Makerere Hill Road.
