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City Tycoon Haruna To Pay UGX10.3 Bn After Losing Appeal Against I&M Bank
The Court of Appeal has upheld a ruling that forces businessman Haruna Ssentongo to pay over Shs 10.3 billion to I&M Bank (formerly Orient Bank), after the businessman’s appeal was dismissed. Ssentongo, who had initially sought Shs 10.4 billion from the bank, will now pay the debt along with interest and general damages.
Ssentongo’s legal battle began in 2019 when he accused the bank of breaching a loan agreement, leading him to seek the repayment of the principal loan, accrued interest, damages, and court costs. However, in December 2022, the Commercial Division of the High Court ruled against Ssentongo, instead ordering him to repay Shs 10.4 billion owed to the bank.
Not content with the High Court decision, Ssentongo took his case to the Court of Appeal, arguing that the ruling had been flawed. However, a panel of three justices — Cheborion Barishaki, Christopher Gashirabake, and Monica Mugenyi — upheld the lower court’s decision. The justices found no fault in the High Court’s award, especially concerning the interest rate applied, which they described as reasonable in light of Uganda’s economic conditions.
Justice Barishaki, delivering the lead judgment, emphasized that courts must take into account the rising inflation and currency depreciation when determining an appropriate rate of interest. “It is my considered view that, in determining a just and reasonable rate of interest, courts should take into account the ever-rising inflation and drastic depreciation of the currency,” Barishaki said. “A claimant should be entitled to such rate of interest that takes into account the prevailing economic value of money, but at the same time one which would insulate him or her against any further economic vagaries.”
The justices agreed with the High Court’s finding that Ssentongo had failed to prove his claims against the bank. “I have carefully reviewed the evidence on record and I am unable to fault the learned Judge on the order awarding costs in the consolidated suits to the respondent (the bank),” said Justice Gashirabake. “The learned Judge found that the Appellant (Ssentongo) had not proved his claims against the respondent and therefore dismissed it.”
Therefore, the Court of Appeal confirmed that Ssentongo remains indebted to I&M Bank in the amount of Shs 10,384,396,959, and that he is required to pay 12.5% interest per annum on this sum from the date the suit was filed, January 22, 2019, until the debt is settled in full.
“The appellant, Mr. Haruna Ssentongo, is indebted to the respondent, Orient Bank Limited, now I&M Bank (Uganda) Limited, in the sum of Shs10,384,396,959,” the court ruled.
Furthermore, the Court of Appeal granted I&M Bank Shs 150 million in general damages, with 6% interest per annum on the amount from the date of the judgment until full payment is made.
“This decision reinforces the bank’s position and highlights the importance of fulfilling financial agreements,” said a representative of I&M Bank after the ruling. “We welcome the judgment, and we are committed to ensuring that our legal rights are upheld.”
This decision brings to a close a long-running legal dispute, reinforcing the bank’s position and setting a precedent for future cases involving loan defaults and breach of contract claims.
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