OPINION: This is the implication of the May 5th Court of Appeal decision on the regulation of cross-border financial services The October 2020 Commercial Court ruling in the case of Ham Enterprises & Others vs. DTB Uganda and DTB Kenya (High Court Civil Suit No. 43 of 2020) sent cold shivers down the spine of the financial services. The decision had a net effect of declaring syndicated lending by foreign funders illegal putting at risk both existing and potential multibillion-dollar portfolios. But following an appeal by the two banks, the Court of Appeal has dismissed the decision of Justice Henry Peter Adonyo and order a retrial by another judge. In this opinion, contact Blaisie. N. Paulsen, a partner at Byenkya, Kihika & Co. Advocates and a seasoned lawyer with over 25 years of experience in the field of banking and finance, shares her opinion on what the ruling means for cross-border lending to Ugandan based entities.
In 2020 the borrower, Ham Enterprises applied to the high court of Uganda for orders among others that the lending by Diamond Trust Bank Kenya (“DTBK”), a Kenyan bank to the borrower Ham Enterprises (a Ugandan entity) was illegal on the basis that the Kenyan Bank engaged in financial institution business without due authorization and permission from the Bank of Uganda (“BoU”).
The trial
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