The Principal Judge, Dr.Flavian Zeija has set Monday, November 2, 2020 as the date to rule on an application in which Diamond Trust Bank sought the High Court to stay the execution of the orders of the Commercial Court.
The Commercial Division of the High Court in Kampala declared illegal, the loan that businessman Hamis Kiggundu of Ham Enterprises had acquired from Diamond Trust Bank (DTB) and directed that the bank refunds the Shs120 billion allegedly deducted from Ham Enterprises’ bank accounts.
However, DTB filed an application seeking to have the orders by the Commercial Court halted.
On Monday, the bank’s lawyers led by Kiryowa Kiwanuka told court that the entire banking sector would suffer far reaching consequences if the orders to have Ham Enterprises paid Shs120 billion is executed.
“If this application is not granted, the effect of the judgment will have far reaching implications on the entire banking sector in Uganda as it nullifies all syndicated loans and lending by foreign financiers to Ugandan borrowers which losses will run in trillions of shillings with the attendant damage to the economy of Uganda by blocking foreign lending to the Ugandan enterprise,” Kiwanuka told court.
DTB lawyers also argued that their client was not given a fair hearing by the Commercial Court before giving far reaching orders that they said will see the bank suffer substantial losses by being required to pay Shs120 billion to Ham Enterprises.
“The applicant’s intended appeal raises serious questions of law and fact and the appeal has a high likelihood of success. The appeal will therefore be rendered nugatory in the event the event of execution before hearing of the appeal,” Kiwanuka said.
Ham’s lawyers disagree
In their defence, Ham Enterprises’ lawyers led by Fred Muwema told court that the claim of far reaching implications in the entire banking sector is only speculative and should not be considered by the court.
“This a case between a bank and its customer. Banks sue and can be sued and therefore, one cant make an argument that every time a bank is sued, it will have far reaching implications on the entire sector,”Muwema said.
“The ruling was against DTB and therefore other banks are not party to the suit and will not be affected.”
Ham’s lawyers also argued that there was a fair hearing by the Commercial Court which led to the ruling that saw the bank ordered to refund shs120 billion to Ham Enterprises.
“The applicants should not have sought assistance from this court in the same manner they claim is not fair. They can’t turn around to say previous proceedings of this nature were not fair.”
According to the lawyers, the orders by the Commercial Court are not executable and therefore can’t be stayed as requested by DTB.
The Principal Judge, Dr. Flavian Zeija said he would look into the submissions from both parties and deliver his ruling on Monday.