Kampala, Uganda | URN | The Supreme Court has given its judgment in the Ham Enterprises and Hamis Kiggundu vs Diamond Trust Bank (DTB) case. Court says the loan to Hamis Kiggundu was legal.
Businessman Hamis Kiggundu popularly known as Ham had petitioned the Supreme Court in Kampala asking them not to deliver their judgement as planned, in the case in which he wants to recover $11m (approximately 120 billion shillings) from Diamond Trust Bank Uganda and Diamond Trust Bank Kenya. The court threw out his petition.
The judgment stems from a series of legal proceedings initiated by businessman Hamis Kiggundu against Diamond Trust Bank (DTB) Uganda and DTB Kenya. The case originated from a syndicated banking agreement between Ham Enterprises Limited and Kiggs International Limited, and the two banks.
In October 2020, Commercial Court Judge Henry Peter Adonyo ruled in favor of Kiggundu, ordering DTB Uganda to refund all funds deducted from his accounts. It was alleged that these deductions were made without Kiggundu’s consent.
The Supreme Court has reversed that, saying “no law was brought to this Court’s attention that forbids foreign financial institutions from extending credit facilities to any financial institution or person in Uganda. If anything, in furtherance 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.
In the case of Uganda, such international financial business transactions are certainly neither governed by the Financial Institutions Act, 2004, as amended, nor the Financial Institutions (Agent Banking) Regulations, 2017, made pursuant thereto.”
The Supreme court ruled that the trial judge therefore erred in holding that the credit agreements between the parties hereto were clothed with illegality.
“Accordingly, the claim impugning the legality of the credit– facility contracts between the parties hereto is disallowed.”