The Supreme Court has ruled that the $11m loan that Diamond Trust Bank (DTB) extended to businessman Hamis Kiggundu was legal.
This is according to the judgement signed by Chief Justice Owiny-Dollo and dated June 6, 2023.
The judgement is also supported by Supreme Court Justices Stephen Musota, Mwondha JSC, Percy Night Tuhaise and Mike Chibita.
Kiggundu petitioned the Supreme Court to block their judgment in the case in which he wants to recover Shs120bn from Diamond Trust Bank Uganda and Diamond Trust Bank Kenya.
In his Tuesday ruling, CJ Owiny-Dollo threw out Kiggundu’s petition.
“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,” Dollo ruled.
He went on: “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.”
He went on: “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.”
In October 2020, Commercial Court Judge, Henry Peter Adonyo, ruled in favour of Kiggundu, ordering DTB Uganda to refund all funds deducted from his accounts after it was alleged that these deductions were made without his consent.
According to Supreme Court, the trial judge 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.”
Find the full ruling here.
