Kampala, Uganda | THE INDEPENDENT | Money lenders in Uganda have petitioned the East African Court of Justice asking them to quash a recent commercial Court decision in a case involving businessman Hamis Kiggundu and Diamond Trust Bank Uganda and Kenya.
The lenders under their umbrella, Money Lenders Union Limited together with their Secretary General Male Mabirizi have filed their case before the Kampala Sub Registry of the East African Court of Justice.
They are challenging the October 7 2020 decision by the head of Commercial Court Dr Justice Henry Peter Adonyo who ordered DTB Uganda and Kenya to refund all the money that was illegally taken from Kiggundu’s accounts amounting to 34 billion shillings and 23m dollars (85 billion Shillings) immediately.
The court also ordered the two banks to return all his land titles citing that the evidence on record indicates that all the loans totaling to 41 billion shillings the businessman had obtained from the banks were fully settled at law.
The Judge also imposed an interest of eight per cent of the money as well as costs after finding that DTB Kenya which gave the loan to Kiggundu through their agent DTB Uganda did not have a license to operate in Uganda to do financial businesses in the country.
Now, in their petition to the East African Court of Justice, the money lenders argue that the decision by the Commercial Court Judge can better be described as robbery from a lender by the borrower while being supported by the court.
They contend that the decision unreasonably interferes with internal arrangements of sister-companies trading in the EA Community thereby defeating the purpose of free trading in services protected by the Common Market Protocol where Uganda is a signatory.
“The above decisions and orders are anti-East African Community and anti-Common Market as the Judge views Uganda as an island yet Uganda is a signatory to the Treaty as well as the Common Market Protocol which opened her borders to goods and services of people and entities from partner states”, reads the petition in part.
It also adds that the decision implies that Uganda has failed to protect Kenyans’ cross border investments and also restricted movement of services which infringes on the principles of The East African Community.
The lenders also fault the Judge for having denied the two banks an effective remedy in the circumstances, the lenders say is against the principles of Rule of Law.
They now want the East African court to quash the decision by the commercial court, declare that Kiggundu is still liable to pay the loans he obtained from the banks and also award them general damages for the inconveniences caused to them arising from the Adonyo decision.
The lenders also want a permanent order restraining Ugandan courts from implementing and or enforcing the decisions and orders by Justice Adonyo as they will have a great bearing to the financial and business sector.
— The Independent (@UGIndependent) October 14, 2020
Last week the bankers under Uganda bankers Association released a statement saying they were to join DTB Uganda and Kenya in appealing the decision because it sent shockwaves across the industry and stakeholders especially regarding syndicated loans.
Bank of Uganda (BOU) early Wednesday stated that foreign banks lending deposits held in jurisdictions other than Uganda are regulated and supervised by their home authorities, and it is not mandatory for a foreign bank to establish a representative office in Uganda in order to conduct lending or non-deposit-taking activity.
“Bank of Uganda’s regulatory and supervisory powers only apply to financial institution business conducted by BoU licensed entities in or outside Uganda or activity which should be licensed as such in Uganda. These powers do not extend to activities of foreign banks outside Uganda licensed by foreign regulators,” said BOU Governor Emmanuel Tumusiime-Mutebile in the statement.