The High Court’s Commercial Division has ruled in favour of KCB Bank Uganda Limited in a high-stakes debt recovery case, ordering two former executives of Great Lakes Coffee Company Limited to pay over USD 1.1 million.
Hon. Lady Justice Susan Odongo dismissed an application by Great Lakes Coffee Co. Ltd, Andreas Nicolaides, and Stamos Konstatinos seeking unconditional leave to defend a summary suit filed by the bank.
The judge found that the applicants had failed to raise any bona fide triable issues, clearing the way for immediate judgment.
Background of the Dispute
KCB Bank sued the coffee company and its two directors to recover USD 1,104,419 allegedly owed under credit facilities.
The 2nd and 3rd applicants had personally guaranteed the debt in agreements signed on 27 July 2022.
The defendants argued that the company’s financial troubles stemmed from being placed under receivership by Bank of Africa in March 2023, and that a separate case challenging that receivership was still pending.
Court’s Reasoning
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Citing Ugandan contract law, the court stressed that guarantor obligations crystallise immediately upon such default unless the guarantee states otherwise.
“The applicants have not denied the debt,” the judge noted, adding that their defence appeared aimed solely at delaying payment — precisely what the summary procedure rules are designed to prevent.
Orders and Implications
The court entered judgment against the guarantors for USD 1,104,419, with contractual interest of 10.5% p.a. from 29 February 2024 until full payment, plus legal costs.
The decision sends a strong signal to corporate guarantors that personal commitments to secure company loans remain enforceable, even in the face of third-party receiverships.
