KAMPALA: Court of Appeal judge, Kenneth Kakuru has rebuked one of the parties in the businessman Hamis Kiggundu-Diamond Trust Bank (DTB) case for sending him emissaries with financial proposals to influence his decision in the matter.
Kakuru made the revelation yesterday while issuing orders to the two parties to file submissions on the matter and address specific matters in the case following Commercial court ruling that directed Diamond Trust Bank Uganda (DTB-Uganda) and Diamond Trust Bank-Kenya to refund Shs 120 billion to Kiggundu.
Kakuru directed the lawyers and their clients to stop sending emissaries to him to influence his judgement.
He said “this matter had been raised by the Principal Judge and he was raising it again. They should allow the courts to perform their duties.” He warned.
The Judge also dismissed application for leave to appeal against the stay order as well as the Appeal against the Stay order filed by Ham Enterprises on grounds that the appeal was already in motion and had been fixed for hearing.
Kakuru’s warning stems from the decision taken last year by Commercial court judge Dr Henry Peter Adonyo that ordered DTB-Uganda to refund all monies deducted from Kiggundu’s accounts in a case involving a syndicated banking agreement between DTB-Uganda and DTB-Kenya.
Kiggundu, through his companies; Ham Enterprises and Kiggs International, had sued DTB-Uganda, accusing the banks of illegally taking away more than Shs 120 billion from his bank account in Uganda without consent while he was serving his loans with the same banks.
Justice Adonyo agreed with Kiggundu and ruled that the credit facilities offered by DTB-Kenya to Kiggundu were illegal since DTB Kenya is not licensed to carry out the financial institution business in Uganda.
Adonyo also ordered the banks to return the properties that Kiggundu had mortgaged, refund of the monies the banks had deducted illegally from his accounts. The judge also awarded costs to Kiggundu and imposed a 6 per cent interest on the monies among other several declarations.
But the banks through their lawyers led by Kiryowa Kiwanuka, petitioned the principal judge asking him to issue staying orders such that they do not implement justice Adonyo’s decision. Kiwanuka argued that if the application is not granted, the banks would suffer substantial loss by being required to pay Shs 120 billion and approximately Shs 9.6 billion in interest on top of releasing the securities deposited with the bank.
Kiwanuka also noted that the decision would to have far-reaching implications on the entire banking sector in Uganda if the implementation is done before their appeal, which has high chances of success is not yet determined.
In his ruling, Zeija noted that the orders need to be stayed because justice Adonyo issued orders in favour of one party in a transaction that he found illegal but made no mention of the sums Kiggundu had borrowed.
Here, Dr Zeija said it important to stay the implementation so that the Court of Appeal can first determine whether the transaction was illegal since it remains an issue of contention in as far as the Contract Act of 2010 is concerned. He said this is because the records show that the banks received independent advice from lawyers before signing the agreements.
Justice Zeija also said the Court of Appeal also needs to first answer the question of agency banking – whether foreign banks that are not trading in Uganda are required to obtain a license from Uganda to execute a contract. The principal judge explained that Bank of Uganda recently released a statement indicating that a license was not required in the transaction under dispute, adding that the Court of Appeal has to first determine whether Bank of Uganda was right or not.
However, yesterday justice Kakuru reasoned that the application by Bank of Uganda to be admitted as Amicus Curiae was disallowed on grounds that BOU isn’t not a neutral party and gave a ruling that they don’t pass the test for Amicus Curiae. They however advised them to join the case as an Interested Party, make an application by 3rd February, other parties respond and they go back to court on 17th February for the hearing of the application.