Principal Judge, Dr Flavian Zeija issued the interim orders on Tuesday in the presence of the bank's lawyer Kiryowa Kiwanuka and Usama Sebuufu. Kiggundu’s lawyer who has since been served wasn’t present in the court.
The head of Commercial Court Justice Henry Peter Adonyo delivered the ruling on Wednesday.
Court Commercial Division has halted the execution of the orders issued by Justice
Henry Peter Adonyo in a case involving businessman Hamis Kiggundu, Diamond
Trust Bank Uganda and Kenya.
Principal Judge, Dr Flavian Zeija issued the interim orders
on Tuesday in the presence of the bank's lawyer Kiryowa Kiwanuka and Usama
Sebuufu. Kiggundu’s lawyer who has since been served wasn’t present in the
"An interim order for stay of execution of the decree
in high court civil suit number 43of 2020 and MA number 654 of 2020 doth issue
pending the determination of the main application for stay of execution",
reads the order in part.
According to the order, the costs of the suit will be determined in the main
application, in which DTB Uganda and Kenya are seeking to stay the execution of
Justice Adonyo's orders pending the determination of their appeal.
The appeal stems from a ruling last week that saw Justice Adonyo
declaring the Shillings 41 billion loan DTB Kenya advanced to Kiggundu since
the bank isn’t licensed to operate in Uganda. He also noted that DTB Kenya didn’t
seek permission or clearance from the Central bank to conduct business in
Uganda, which is contrary to the laid down procedures.
Justice Adonyo also noted that DTB Uganda acted like an
agent for DTB Kenya contrary to the Financial Institutions Act 2004. He
directed both banks to return Kiggundu’s land titles and all the monies confiscated
from his accounts with an interest of eight percent as well as paying him costs
of the suit.
Background to the Case
In August 2020, Kiggundu petitioned the Commercial court after DTB Uganda and
DTB Kenya deducted U$ 23 million (85 billion Shillings) and 34 billion
Shillings from the accounts of his companies Ham Enterprises and Kiggs
International Uganda Limited without his knowledge and consent.
According to documents before the court, between 2011 and 2016,
Kiggundu acquired loans totalling to 41 Billion Shillings from DTB Uganda and
Kenya through both companies to finance his real estate business.
He mortgaged his properties on Makerere Hill, Kawuku,
Kyadondo and Victoria Crescent Road among other plots of land as collateral for
the loans. However last year, the banks served Kiggundu with documents
indicating that he had failed to meet his loan obligation worth 39 billion Shillings
in accordance with their agreement and threatened to take over his collateral.
As a result, Kiggundu petitioned the commercial court,
saying that the money that was withdrawn from his dollar and Shillings accounts
was in excess yet he had fully serviced the loan. Through his lawyers of
Muwema and Company Advocates, Kiggundu asked court to declare that all the
loans he obtained have been serviced fully and order the banks to refund the
money taken from his accounts.