In a decisive legal intervention, the Court of Appeal presided over by Justice Monica K. Mugenyi, (sitting as a Single judge) has issued an interim restraining order against Cairo International Bank, preventing the sale of properties owned by Biyinzika Enterprises Limited.
This judicial move marks a significant development in an ongoing dispute, safeguarding the assets of the enterprise from imminent sale by the bank.
The Court of Appeal’s injunction stands as a crucial safeguard for Biyinzika Enterprises Limited, preserving its properties from being auctioned off by Cairo International Bank. This legal restraint follows a contentious dispute between the bank and the enterprise, with the court’s decision signalling a temporary but crucial pause in the bank’s attempts to liquidate the properties.
The ruling that took place on Thursday provides a reprieve for Biyinzika Enterprises Limited, allowing for a more deliberative legal process to unfold and potentially reach a resolution between the conflicting parties.
Biyinzika Enterprises, a renowned company specializing in poultry feed production, hatching chicks, and various other ventures, found itself entangled in a financial ordeal with debts exceeding Shs20 billion owed to both DFCU Bank and Cairo International Bank. As the company encountered business stagnation, its financial liabilities surged, leading to substantial indebtedness to the banks.
In a bid to manage its financial strain, Biyinzika Enterprises approached the bank, proposing to pay interest for an extended period of eight months and requesting an additional year to stabilize their loan repayments. However, the substantial arrearage prompted Cairo International Bank to take steps towards auctioning the company’s valuable properties as part of debt recovery measures.
Against this backdrop, Cairo Bank initiated the advertising of Biyinzika’s properties in newspapers signalling an intent to proceed with the auction. In response, Biyinzika sought recourse by applying for an injunction in the Commercial Division of the High Court. However, their attempt to halt the bank’s actions was met with disappointment as Justice Harriet Grace Magala dismissed the injunction, thereby permitting the auction of Biyinzika’s substantial properties to satisfy the outstanding Cairo Bank loan.
In a strategic move to safeguard their assets from imminent auctioning, Biyinzika Enterprises pursued legal recourse in the Court of Appeal. Their plea for intervention met success, as the Court of Appeal granted a much-needed relief, halting the impending sale of their properties, and thereby offering a reprieve from the looming threat to their valuable assets.
In her ruling, Justice Mugenyi alluded that although it has been proposed that one of the properties has already been sold, there is nothing on record to suggest that full payment therefore has been effected. To avert any further alienation of the mortgaged properties, and insofar as the properties listed in Annexure J as due for the Respondent’s possession are the subject of contention on appeal, it seems to her that it would serve the interests of justice in this matter that the current status quo is preserved until the substantive application for a temporary injunction has been heard and determined.
“In the result, an interim order is hereby issued restraining the Respondent Bank, its agents, employees, assignees or any persons claiming or deriving authority therefrom from taking any steps, actions or otherwise taking possession or selling the following mortgaged properties pending the determination of Civil Application No.1226of2023,” she said.
As of now, the court has restrained the bank from selling or advertising; Bulemezi Block 795 Plot 8, Land at Buswagiro, Nakaseke District; Bulemezi Block 44 Plot 59, Land at Namusansula, Luwero District; Bulemezi Block 194 Plot 67, Land at Kasambya, luwero District; Leasehold Register Volume 1904 Folio 20 Plot 131, Ntinda Road, Kampala; Leasehold Register Volume 1571 Folio 25 Plot 135, Ntinda Road, Kampala, and Leasehold RegisterVolume 1109 Folio 9 Plot 133, Ntinda Road, Kampala.