Court of Appeal Ruling in DTB-Ham Court Battle
Court of Appeal quashes Commercial Court judgement, orders immediate retrial
The Court of Appeal in Kampala has ruled that an earlier ruling made by Justice Henry Peter Adonyo of the Commercial Court was made in error without considering all the evidence. Three Justice of the Court of Appeal unanimously ordered for an immediate retrial of the case by the Commercial Court.
Justice Adonyo had ruled in favour of the applicant businessman Hamis Kiggundu who petitioned court challenging the decision by DTB Uganda and DTB Kenya to refund more than UGX120bn they had taken from his DTB Uganda Bank Account, on grounds that he had failed to pay a loan that was advanced by DTB Kenya.
Delivering their ruling on Wednesday afternoon, the justices led by Deputy Chief Justice Richard Buteera, along with Justices Kenneth Kakuru and Christopher Izama Madrama faulted Commercial Court Judge, Henry Peter Adonyo for failing to hear and determine the case based on its merit and instead relied on a mere point of law arising from the proceedings.
Their lordships noted that this principle only applies in the event that the defendant fails to file his defense to the suite which they said wasn’t the case in the matter before court because DTB filed a written defense adding that the judge never addressed his mind before awarding Kiggundu UGX 120billion.
It’s therefore, upon that submission that the justices ordered the matter to return to another Commercial Court Judge for retrial and directed Kiggundu to pay costs of the appeal to the two banks represented by lawyer Kiryowa Kiwanuka.
“One party cannot benefit from an illegal contract. Question of whether a foreign bank can lend money in Uganda is based on law and fact and the judge should have heard the case fully,” ruled justice Kakuru.
The court’s decisions arise from an appeal filed by DTB Kenya and DTB Uganda challenging Commercial court compensation order on the grounds that the Judge didn’t address his mind to the evidence on record relating to breach of contract, fraud and statutory issues.
Shortly after the ruling, Kiggundu’s lawyers led by Fred Muwema told journalists that they will proceed to the Supreme Court, East African Court of Justice and Kenyan Courts to challenge the issues arising from their case.
A clear insight into the Appeal
It stems from the October 2020 decision by Commercial Court Judge Henry Peter Adonyo ordering DTB Uganda to refund all monies deducted from Kiggundu’s accounts in a case involving a syndicated banking agreement between DTB Uganda and DTB Kenya.
The banks reportedly deducted the money from Ham Enterprises Ltd and Kiggs International Ltd, which belong to Kiggundu without his consent.
According to the evidence before the court, between 2011 and 2016, Kiggundu secured loans worth more than UGX120 billion from DTB Uganda and Kenya through Ham Enterprises Ltd and Kiggs International Ltd to finance his real estate business.
However, the banks served Kiggundu with documents indicating that he had failed to service the loans to the tune of UGX39 billion in lines with their agreement and threatened to take over his collateral.
This prompted Kiggundu to petition the commercial court, saying that the money withdrawn from his dollar and UGX accounts was in excess despite paying back his loan in full.
Through his lawyer Fred Muwema, Kiggundu asked the court to strike out the defenses of both banks and order them to refund the money illegally withdrawn from his account. Justice Adonyo then ruled in Kiggundu’s favour and dismissed the bank’s defense and ordered them to refund the monies withdrawn from the city tycoon’s account with the interest of 8percent and costs of the suit.
Dissatisfied with the decision, the banks petitioned Principal Judge Dr. Flavia Zeija where they secured an order for stay of execution of the commercial court orders meaning that Kiggundu cannot commence the recovery of the said monies before they petitioned the appellant Court.