The Big Story: Making Sense of Tycoon Hamis Kiggundu`s tricky Case against Diamond Trust Bank Uganda, Kenya

For the very first time, the mighty Investigator picks interest in the tricky case where city businessman, Hamis Kiggundu dragged Diamond Trust Bank (DTB) to High Court, floored them in the first round at the Commercial Division before they trotted to the Court of Appeal, for fear of the worst.

Whereas piles of paper rims, ink, time and money have been spent in this matter, the only ground in favor of Kiggundu is the illegality in the entire arrangement. For the sake of the ordinary mind, we strive to localize the much-used legal terms, for many resolved court cases go without properly being stylized in lay man`s conception.

For starters, one doesn`t graduate from Kampala`s LDC and cross over to Nairobi to start their legal trade without a practicing license from Kenya. It is from such illegalities that Hon. Justice Dr. H.P Adonyo derived the desire to find DTB Uganda and DTB Kenya, guilty before handing the victory to Hamis Kiggundu on Oct. 7^th2020 at Commercial Division in Kampala.

Whereas it is true that Kiggundu, somewhere around 2011 walked into DTB Uganda and successfully negotiated a loan in Billions, it is equally true that the same was legally contested by the former. This was upon the Bank taking it in their hands to draw, as recovery, some billions from Ham`s Accounts without his consent.

It is at this time that Kiggundu decided to take on DTB, not only contesting the illegal removal of his dimes but again, challenging the stance where, DTB Uganda used DTB Kenya to lend him the money. Using this as the main ground among others, Kiggundu`s brainy lawyers of Muwema & Co. Advocates dragged DTB to Court.

According to Section 117 of the Financial Institutions Act, “A foreign bank may, in such form and such manner as shall be prescribed by the Central Bank by statutory instrument apply to the Centra Bank for permission to establish a representative office in Uganda to engage in such limited activities, excluding the taking of deposits as the Central Bank may approve.”

And basing on the above among others, Justice Adonyo ruled thus; “From the above, I would tend to agree with the submission of the Applicant that indeed the 2^nd Respondent [DTB Kenya] not only appointed the 1^stRespondent [DTB Uganda] to be its agent in Uganda but that [they] carried out financial business transactions on behalf of the 2^nd Respondent in contravention of the law both in Uganda which acts are illegal and would call for it being penalized since it pleaded and attached no license authorizing it to transact business on behalf of the 2^nd Respondent…”

Hon. Justice Adonyo added; “Arising from the determination as I have made above, I would answer this issue in affirmative that indeed the 1^st Respondent acted as an agent of the 2^nd Respondent when it carried out the impugned financial business transaction without first obtaining a license from Bank of Uganda in contravention of the law which act is criminal and illegal.” He then passed his ruling in favor of Hamis Kiggundu.

Probably in the know that they committed an offence which might turn grave against the entire banking industry in the country, and knowing that in Uganda, such offences are committed by the banks against innocent and unsuspecting Ugandans, DTB never wanted to pose this precedent themselves, lest they be eye-cornered by other banks.

The DTB lawyers of K&K Advocates (Karugire and Kiryowa) elected to challenge the ruling by filing an Application to Court of Appeal. Their claim amongst others was that the trial Judge (Adonyo) had thrown out their defense, claiming it wouldn`t stand in the place of the already determined illegality under which the transactions were made.

“This application is allowed with costs to the Applicants. The joint written statement of the Respondents filed in HCCS No. 43 of 2020 which is a perpetuation of illegalities is hereby struck out,” Adonyo had ruled. But DTB objected and filed an Appeal before three Justices namely; Kenneth Kakuru, Richard Buteera and Christopher Madarama.

At the Court of Appeal, the trio Justices concurred with DTB that indeed, the trial Judge was in error to throw out the defense. They all centered on the act as one of the reasons for their judgement of the matter, ignoring in entirety, the illegalities Adonyo cited. They agreed to grant DTB a victory before they ordered that the matter be taken back to the High Court and be re-heard.

In his ruling, Adonyo had ordered that an independent auditor be appointed by the Institute of Certified Public Accountants of Uganda to determine the issue relating to the 1^st Respondent`s loan accounts as raised in the plaint and to furnish the Court with an audit and reconciliation report in respect of the disputed claims in issue.

Basing on the above, Justice Kenneth Kakuru argued that the trial Judge had read the stashed defense and shouldn`t have thrown it out. “It is apparent to me that the learned trial Judge had issued the above order on the basis that the plaintiffs now respondents had raised valid claims in the plaint that required determination on one hand and that the defendants now appellants also had raised a valid defense.”

In his judgement, Justice Christopher Madrama ordered thus; “In conclusion, the learned trial Judge erred in law, to strike out the written statement of defense and I would accordingly allow grounds 9 and 11 of the Appeal and set aside the order striking out the written statement of the defense.”

On his side, Justice Richard Buteera ruled thus; “It is clear from the above quoted order [about appointing an auditor – Ed] of the trial that the claims which are the subject matter of the dispute were not liquidated. It was therefore an error of the learned trial Judge to strike out the written statement of defense and enter judgement for the plaintiffs…”

The trio went on to hold that DTB`s Appeal succeeds “with an order of setting aside the judgement and orders of the learned trial Judge with costs.” They also issued an order to remit “the suit to the High Court to be fixed before another trial judge for determination after hearing from both parties.”

But hold it there! The Ham Kiggundu lawyers have sworn upon their living God never to kowtow in the Court of Appeal poohoo. They have instead applead to the Supreme Court with interesting grounds, seeking the most top Court to find all the three Judges` submissions and judgements wanting… Watch this space…

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Stanley Ndawula: Stanley Ndawula is a two and a half decades’ seasoned investigative journalist with a knack for serious crimes investigations and reporting. He’s the Founding Editorial Director and CEO at The Investigator Publications (U) Limited