DTB gets suspended sentence in 1.2 billion shillings lawsuit against Ugandan
- Kenyan multinational banking firm DTB Group won the first round in its bid to enforce the recovery of loans worth 1.2 billion shillings from Ugandan businessman Hamis Kiggundu.
- The Kampala Court of Appeals on Wednesday overturned the High Court’s orders declaring the loans granted to Mr. Kiggundu illegal because some of them came from Kenya.
Kenyan multinational banking firm DTB Group won the first round in its bid to enforce the recovery of loans worth 1.2 billion shillings from Ugandan businessman Hamis Kiggundu.
The Kampala Court of Appeal on Wednesday overturned the High Court’s orders which declared the loans granted to Mr. Kiggundu illegal because some of them came from Kenya.
The lender has provided several credit facilities denominated in US dollars and Ugandan shillings to Mr. Kiggundu and his companies Ham Enterprises Limited and Kiggs International (Uganda) Limited.
The loans were made by subsidiaries of DTB, Diamond Trust Bank (Uganda) Limited and Diamond Trust Bank (Kenya) Limited.
However, the businessman defaulted and sought protection from the Ugandan High Court, which issued a shocking ruling on October 7, 2020, calling the loans illegal and effectively giving Mr. Kiggundu a pass. free.
Judge Henry Peter Adonyo said DTB Kenya was neither licensed nor regulated in Uganda and therefore syndicated loans were illegal.
DTB appealed the decision and was granted a stay yesterday after the Kampala appeals court overturned orders made by the lower court.
“I am of the opinion that the appellant’s appeal succeeds in large part with an order setting aside the judgment and the orders of the learned trial judge with costs,” said Christopher Madrama, a member of the three-judge bench, in the judgment rendered yesterday.
The High Court is now expected to resolve the dispute between DTB and the businessman.
Judge Madrama said the appeal was successful because DTB demonstrated that his written defense was unfairly sent by the High Court.
The Court of Appeal’s findings gave the bank the opportunity to build a strong case against the allegation that the loans are illegal and should not be repaid.
“A loan agreement with a foreigner or a foreign entity, whether the contract is performed in Uganda or outside Uganda, would be enforced by a Ugandan court in accordance with the terms of the agreement between the parties,” the judge said. Richard Buteera.
He added that he was not aware of any law prohibiting a Ugandan citizen or foreigner residing in Uganda from borrowing or repaying money borrowed from a foreigner or foreign institution unless the transaction involves the perpetuation of a criminal offense.