MBALE – The Supreme Court in Kampala delivered its judgment in which it ruled that the credit facilities offered to businessman Hamis Kiggundu and his two companies Ham Enterprise Limited and Kiggs International (U) Limited by Diamond Trust Bank Uganda and Diamond Trust Bank Kenya were legal.
In a twist of events, all five justices of the Supreme Court including the Chief Justice Alfonse Owiny-Dollo, Lady Justices, Faith Mwondha, Percy Night Tuhaise, Justice Mike Chibita, and Stephen Musota opined that the case be heard afresh in the High Court Commercial Division of course by a different judge.
The grievances between the parties stemmed from a loan obligation that was allegedly given to Ham by Diamond Trust Bank Uganda and Diamond Trust Bank Kenya.
The loan was not paid back according to the terms of the loan agreement. Diamond Trust Bank Uganda exercised its mandate under the loan agreement and deducted money from the account of Ham Kigundu without his knowledge and consent. It appears he understood why the bank took such an action but nonetheless, he sought legal redress.
Diamond Trust Bank Uganda further threatened to seize the mortgaged properties prompting Ham to file a suit in an attempt to stop the process arguing that the withdrawn funds exceeded the outstanding loan amount, as he had already made full repayment, a claim that was disputed by the bank. Having made amendments to the pleadings and in effect raising a new cause of action, the court entered judgment in favour of Ham but his victory was short-lived as the Diamond Trust Bank appealed to the Court of Appeal which reversed the proceedings and ordered a retrial of the matter.
Ham’s grievance is alleged to have originated from a syndicated banking agreement with Diamond Trust Bank Kenya and Diamond Trust Bank Uganda. The High Court ruled in favour of Kiggundu on grounds that the facilities of 120 Billion extended by Diamond Trust Bank Kenya to Kiggundu were illegal and hence unenforceable for the reason that the Diamond Trust Bank Kenya had no license from Bank of Uganda to conduct financial institutions business in Uganda. In fact Diamond Trust Bank Kenya had admitted that it neither had a License to conduct any banking operations in Uganda nor did Diamond Trust Bank Uganda have the Authority to conduct Agency Business on behalf of Diamond Trust Bank Kenya in total disregard to the dictates of the law.
Being dissatisfied, Ham went to the highest temple of “Justice” but did not get much, as the Supreme Court confirmed the court of appeal decision with minor modifications; the Supreme Court like it had been anticipated faulted the High Court Judge’s decision. In a 55-page judgment, the Supreme Court gave a detailed explanation as if they were re-examining and evaluating all the evidence on the record as an appellate court would do.I loved the arguments which will go a long way in pushing Parliament to create some safeguards to protect future transactions involving foreign funds.
It is a known fact that many financial institutions in Uganda rely on borrowed money in order to lend to eligible customers. No wonder the interest rates are always high. If the decision of the Hugh court was left to stand, it would have far-reaching consequences on the financial sector. The Bank of Uganda as well as the government would not allow such a precedent to prevail. Am sure the government is already mooting plans to table new laws in that regard to protect future borrowing from foreign entities.
Earlier, Ham and his Lawyers had filed an application asking the Supreme Court to pronounce itself on the illegalities that had been admitted by Diamond Trust Bank Kenya but Justice Percy Tuhaiseremained steadfast and dismissed the same on grounds that the issue had been accommodated in their judgment. True to their promise, their decision partially agreed with Kiggundu that the Court of Appeal erred in law and fact when it failed, neglected, and or refused to pronounce itself on the issue of illegality. My guts tell me that somebody is playing games having used another as a proxy.
I feel somebody wants to use the due process of the law to grab a public property like Nakivubo Stadium by way of a purchase through public auction when the Diamond Bank chooses to foreclose if at all it was used as collateral for the hefty sums.
At the lower court level, Ham Kiggundu had raised seven grounds of appeal but the Supreme Court chose to address the two principal ones; whether it was right for the Court of Appeal not to address the illegality issue and whether the process was illegal or not. In his judgment, Owiny-Dollo ruled that the Court of Appeal ought to have addressed and determined the issue of illegality of the credit facilities, which was raised before it. However, the two issues that the Supreme Court dealt with were the crux of the dispute and in one way or another, their decision sealed the fate of the remaining five issues. I don’t see how the High Court will adjudicate upon this matter without pouring cold water on the Supreme Court decision.
The Justices also that Diamond Trust Bank Kenya did not receive or hold any deposits in Uganda, and indeed it did not advance the impugned credit facilities to the Kiggundu and his companies out of any such deposits since it had no authority to carry out financial institution business in Uganda. The Supreme Court also found that Diamond Trust Bank Kenya did not advance the credit facilities directly to Kiggundu as these were instead routed through the Diamond Trust Bank Uganda.
Surely with all that reasoning of the Supreme Court, what else do they expect a High Court Judge to do with the retrial? Save for taxation, it appears nothing has been left for the High Court as all the important issues have been dealt with in depth. Certainly, no judicial officer at a rank of a High Court Judge would want to entertain issues that have the effect of pouncing holes in what the Supreme Court has already decided. It appears to me that the High Court is going to find itself stuck between a rock and a hard place as the arguments arising out of the hearing will amount to an attempt to overturn what a superior court has already decided.
With all this confusion at play, Diamond Trust Bank Uganda is working in overdrive to secure a hearing date at Commercial Court for retrial. On the other hand, Ham’s Lawyers are determined to seek redress at the Constitutional Court on whether the Supreme Court’s refusal to entertain the application on admission was not a violation of Ham’s right to a fair hearing. Ham knows as much as I do that the same Judges who sit at the Court of Appeal are the very Judges who constitute a constitutional court. I personally do not see how these Judges are going to interfere with the decision of their superiors.
The Constitutional Court will without having to appear to undermine the final appellate Court create an impression in their ruling that the Supreme Court had the power to overlook the application because the issues therein were eventually answered in the final judgment. In other words, Ham should not sit back and imagine the Constitutional Court will vary or contradict the Supreme Court Judgment. Matters are made worse that all the possible issues for determination by the High Court have been answered in the affirmative and in favour of Diamond Trust Bank. If I were Ham, I would concentrate on a safe landing instead of buying time; all the securities that he gave to the bank are going back to the real owners.
The reaction of Ham in when he failed to block the delivery of the Supreme Court judgment and heaped the blame on Kiryowa and Karugire spoke a different language, whatever he was venting left many wondering if his fight was with a different person and not Diamond Trust Bank. Many Ugandans must be wondering how a case could have been filed in 2022 and was heard by the Court of Appeal and Supreme Court before the end of 2023. Some undercover beneficiary is watching from the peripheral and pushing from behind the scenes but one day, I repeat one day, it will all come out.
Am reminded of a crude Luganda saying “Ekibi kigwana wala”
Wadada Rogers is a commentator on political, legal and social issues. Wadroger @yahoo.ca
