Kiggundu argues that DTB took funds from his account without his consent
The Court of Appeal on Wednesday ordered that sh41b case involving businessman Hamis Kiggundu aka Ham and Diamond Trust Bank (DTB) be heard afresh by the Commercial court.
In a judgment delivered by the Deputy Chief Justice Richard Buteera, Kenneth Kakuru and Christopher Madrama ruled that former Commercial Court judge Henry Peter Adonyo erroneously entered a default judgment against DTB-Kenya and DTB-Uganda.
“In conclusion the learned trial judge erred in law to strike out the written statement of defence. We accordingly allow grounds 9 and 11 of the appeal and set aside the order.'
We find that the defendant (DTB) was not heard, the rest of the order issued by the learned trial judge cannot stand and there is no need to consider other grounds of the appeal,” Madrama said in the lead judgment.
The judges said the matter should be allocated to another judge for hearing.
The judgment means that Adonyo’s decision has been set aside.
Background
On October 7, last year Adonyo ruled that DTB-Kenya illegally offered the credit facilities to Ham Enterprise Limited and Kiggs International (U) limited owned by Kiggundu since it was not licenced by BOU to conduct financial business in the country.
Adonyo faulted DTB-Uganda for acting as a collection agent for DTB-Kenya saying it was illegal, unethical, and unlawful and in breach of trust, fiduciary duty and in breach of the Financial Institutions Act, 2004 and BOU Consumer Protection Guidelines, 2011.
Consequently, the judge ordered the banks to refund sh34b and $2,346,670 at an interest rate of 8%, which he declared was unlawfully appropriated by the banks from Kiggundu’s accounts.
The court also ordered for the unconditional discharge of mortgages created over Kiggundu’s properties comprised in Kyadondo Block 248, Plot 328 land at Kawuku, FRV 1533, Folio 3, plot 36-38, Victoria crescent II Kyadondo and LRV 3176 folio 10, plot 923, Block 9 located at Makerere Hill Road and all cooperate and guarantees issued to the banks.
The court also quashed the demand notices for $4,014,444 (about sh14.8b) and $6,974,600 (about sh25.7b) which the banks had issued to Kiggundu.
The judgment followed a suit by Kiggundu and his two companies Ham Enterprise Limited and Kiggs International (U) limited accusing DTB of fraudulently siphoning over sh120b from his accounts without his knowledge and consent.
Kiggundu contends that between February 2011, and August 2018, through his companies Ham Enterprise Limited and Kiggs International (U) limited sought and was offered credit facilities by the banks for construction of commercial properties.
He argues that while still servicing his credit facilities, he carried out an audit and reconciliation of the loan accounts and found out that the banks had purportedly taken sh34b and $2,346,670 from his account without his knowledge.
Dissatisfied with Adonyo’s Judgement, DTB stopped the execution order and subsequently appealed against the decision.
