The commercial division of the Hight court has halted the execution of the orders issued by the head of Commercial court justice Henry Peter Adonyo in a case involving businessman Hamis Kiggundu, Diamond Trust Bank (DTB)-Uganda and DTB-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 court.
“An interim order for stay of execution of the decree in high court civil suit number 43 of 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 DTB-Kenya are seeking to stay the execution of Adonyo’s orders pending the determination of their appeal.
The appeal stems from a ruling last week that saw justice Adonyo declaring the Shs 41 billion loan DTB-Kenya advanced to Kiggundu illegal 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.
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 per cent as well as paying him costs of the suit.
In August 2020, Kiggundu petitioned the Commercial court after DTB-Uganda and DTB-Kenya deducted $23 million (Shs 85 billion) and Shs 34 billion 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 Shs 41 billion from DTB-Uganda and DTB-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 Shs 39 billion 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As a result, Kiggundu petitioned the Commercial court, saying that the money that was withdrawn from his dollar and shillings accounts was in excess yet he had fully serviced the loan.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.
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