Bank of Uganda loses bid to join Ham Vs DTB appeal

January 28, 2021 in Business, Financial Services, Policy by Editor

An application by the Bank of Uganda to be enjoined as amicus curiae (friend of the court), in the ongoing Ham Vs DTB case, has been denied by the court of appeal. The court cited lack of neutrality since the applicant was a regulator.

Ham Enterprises  lawyers had opposed the application, citing a press statement the Bank of Uganda published following a ruling on the matter by the High Court last October, as evidence that “BoU was providing a shoulder for DTB to cry on.”

Bank of Uganda and its legal represetatives were not immediately available to comment on the apparent setback.

The ongoing appeal by DTB follows an October 7^th, 2020 decision in which the High Court Ordered Diamond Trust Bank to pay Ham Enterprises UGX120 billion after losing the case in which the litigant argued was unlawfully withdrawn from his accounts, UGX 9.6 billion in legal fees and interest due on the sum for the ten-year period during which the contested debits were made.

The High Court based its judgement on the determination that Diamond Trust Bank Kenya had illegally carried out financial business with Ham Enterprises Limited without a license to operate in Uganda from Bank of Uganda.

The decision caused alarm in the financial industry with both the bank of Uganda and the Uganda Bankers Association (UBA) issuing press statements about the likely negative impacts of the court’s decision on Uganda’s credit rating.

In the October judgement, Court also directed Bank of Uganda which is the implementing authority under the Financial Authorities Act 2 of 2004 as amended to take “all necessary actions and measures to ensure that the provisions of the law is implemented in accordance with the intention of the law,” such as to protect the Ugandan economy from illegal hemorrhages and uncontrolled flows of financial resources and to ensure that financial institutional business in Uganda is operated within the letter of the law to protect the nascent banking business industry in Uganda.