In a highly anticipated decision in SCCA 13 of 2021 Ham Enterprises Ltd & 2 others vs Diamond Trust Bank (U) Ltd & another, Uganda’s Supreme Court ruled on Tuesday 14th June 2023 that a syndicated loan facility arranged between a local bank Diamond Trust Bank Uganda Limited and a foreign bank for benefit of  Ugandan borrowers, Ham Enterprises Ltd & Kiggs International (U) Ltd is lawful and does not contravene the Financial Institutions Act 2004. Additionally, the court ruled that no legal provision forbids foreign financial institutions from extending credit facilities to any financial institution or person in Uganda.

As a consequence, the apex court affirmed the decision of the Court of Appeal that overturned a high court judgment that had found that such syndicated facility offended the Financial Institutions Act 2004. However, the Supreme Court faulted the Court of Appeal for unlawfully rejecting the Respondents’ amended plaint raising a defence of illegality and ruled that the amendment was regular. However, the amendment largely raised a plea of illegality of the loan facility that the supreme court has ruled does not have merit.

The decision of the court, written by Chief Justice Alfonse Owiny-Dollo, is unanimous as the other four justices entirely agreed with him. See full Judgment:

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