Principal judge, Dr Flavian Zeija has rebuked one of the parties in the businessman Hamis Kiggundu-Diamond Trust Bank (DTB) case for sending him agents with financial proposals to influence his decision in the matter.
Zeija made the revelation today while issuing orders in which he stayed the execution of the Commercial court ruling directing Diamond Trust Bank Uganda (DTB-Uganda) and Diamond Trust Bank-Kenya to refund Shs 120 billion to Kiggundu. Zeija said he was extremely surprised by one of the parties he didn't name of attempting to bribe him, calling the action disgusting.
"Before I take leave on this matter, I was flabbergasted by one of the parties sending emissaries to me with financial proposals in order to influence my decision. This is disgusting to say the least,” Zeija said.
Zeija's ruling stems from the decision last month 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.
The judge also reasoned that there is a serious threat with the execution of the orders because he has already learnt that shortly when he issued an interim order staying execution last month, Kiggundu’s lawyers secretly extracted an order signed by the acting registrar Lillian Bucyana without court files yet they were already before him and he only learnt about it in the DTB application.
Like it is usually the practice to deposit monies to court involved before proceeding to appeal, the principal judge has said it’s not necessary here since the banks have the capacity to pay Kiggundu his monies should the Court of Appeal concur with justice Adonyo's decision.
He also added that there is a possibility of vacating the mortgages and it would create more hardships in case the Court of Appeal quashes the decision by the lower court.
The principal judge’s decision which is going to be in place until the determination of DTB’s appeal case was read to the parties by his private legal secretary Julius Mwesigye. But Kiggundu’s lawyers led by Fred Muwema say they are going to appeal against this decision because the principal judge's conduct in this file was wanting.
"We’re going to file an appeal against this decision in respect of the conduct of the principal judge. We think that the Court of Appeal needs to help us understand whether a principal judge can go and pick a file from a judicial officer of judges he doesn’t supervise and make a decision. Our worry is that of a principal judge can take a file and make orders in it, what about the chief justice who is the head of the judiciary? Does it mean that a chief justice can go to a file of court of appeal or High court and make orders? These are questions we also want to take on appeal," said Muwema.