Sh41b DTB loan to Ham is legal — Supreme Court
Jun 13, 2023
On Tuesday, the Supreme Court noted that the $11m (about sh41b) credit facility that was extended to Ham Enterprises Ltd, was legal.
Businessman Hamis Kiggundu. File photo
By Michael Odeng and Farooq Kasule
Journalists @New Vision
The Ham-DTB fight has been sent to the High Court, with the Supreme Court ruling that the dispute must be critically analysed on facts.
On Tuesday, the Supreme Court noted that the $11m (about sh41b) credit facility that was extended to Ham Enterprises Ltd, was legal. Ham later remitted the money to Kiggs International Uganda Ltd.
The two companies are owned by businessman Hamis Kiggundu.
Accordingly, the dispute has been sent to High Court for trial on facts, minus the issue of illegality, which has been exhaustively determined by the Supreme Court.
“The issue of illegality having been resolved in this appeal, High Court Civil Suit No. 43 of 2020, between the parties hereto, which was the genesis of the appeal to the Court of Appeal, and ultimately to this court, is remitted back to the High Court for trial before another judge; basing only on issues of fact arising from the pleadings,” Owiny-Dollo ruled.
Other justices on the panel are Faith Mwondha, Mike Chibita, Stephen Musota and Percy Tuhaise.
The judges ruled that the syndicated credit facility executed between DTB Uganda and DTB Kenya is lawful because neither the Financial Institutions Act of 2004, as amended, nor the Financial Institutions (Agent Banking) Regulations, apply to them.
Subsequently, the justices disallowed claims by Kiggundu impugning the legality of the credit facility contracts between the parties.
Accordingly, the justices ordered Kiggundu to pay DTB 50% of the costs in the Supreme Court and Court of Appeal.
The justices noted that no law was cited or brought to the attention of court, which forbids the creation of the impugned syndicated agency relationship entered into by DTB Uganda and Kenya.
Similarly, the justices observed that no law was brought to the court’s attention that forbids foreign financial institutions from extending credit facilities to any financial institution or person in Uganda.
The justices further noted that in the continuity of international trade and investment, financial institutions the world over are known to engage in global financial business transactions by dealing with, or through, financial institutions based in other jurisdictions.