The Supreme court generally mishandled the Ham vs DTB Civil Appeal No. 13/2021 when it delivered its judgment on June 6, 2023.
This judgment was against the public policy of Uganda. In the handling of the case, the court intentionally set up its ladder against the wrong wall and it ended up resolving the wrong problem.
There are two imaginary problems which influenced the Supreme court decision. The first imaginary problem was that Ham is using legal technicalities to avoid paying his debts said to be owed to DTB. The second imaginary problem was that the High court decision which was made in favour of Ham outlawed syndicated lending transactions between foreign banks and Ugandans.
We note that an unusual dissonance greeted the delivery of what should have been a landmark judgment in guiding the prudential regulation of the banking sector. This muted reception of the decision is caused by the court’s failure to yield to the true facts of the case.
The court also completely misdirected itself on the sovereignty of the Ugandan law when it declared incredibly, that there is no law which stops a foreign bank from lending in Uganda and that any transaction it carried out was legal per excellence.
By subscribing to a deregulation of foreign led financial transactions conducted in Uganda, the judgment consigned itself into an irretrievable legal absurdity.
ORIGIN OF THE DISPUTE
Ham’s dispute with DTB Uganda started in 2019 when he conducted an audit of his bank accounts and discovered that DTB had over a long period of time stolen the equivalent of Shs 123bn from his accounts. Ham sent his audit findings to the bank in November 2019 and requested for a meeting to reconcile accounts.
At that time Ham had an existing credit facility with DTB Uganda and Kenya amounting to $10m. This facility had been contracted in 2017/2018. Ham was however surprised when DTB turned down the audit meeting request and instead started taking enforcement measures to recover the $10m facility.
Ham run to court in early 2020 to report the stealing of money from his accounts and also to raise the issue of the illegal lending transaction of DTB Kenya which was done without prior approval of the central bank as required by the Financial Institutions Act 2004 (as amended).
The dispute would not have escalated to the courts if DTB had acted reasonably and sat down with its customer to look into the audit queries he had raised. On the facts, it is Ham who demands money from DTB, not vice versa.
DECISION OF THE HIGH COURT
After hearing the arguments of the parties, the High court declared that the $10m credit facility was illegal for want of regulatory approval. The illegality attached to the $10m credit transaction and not Ham’s claim of Shs 123bn which court ordered to be refunded. Secondly, court refused to order the audit of the $10m credit transaction since it had already been declared to be an illegality.
The above decision gave rise to the second imaginary problem which relates to the alleged outlawing of syndicated loansbytheHighcourt. For the record, the High court did not make any order in its decision, outlawing syndicated lending transactions between a foreign bank and any Ugandan.
The only inference which can be drawn from the High court decision is that any lending by a foreign bank in Uganda required the prior approval of the Central Bank.
SMUGGLING OF THE SYNDICATED LOAN ISSUE IN THE CASE
The syndicated loans was never part of the DTB appeal lodged in the Court of Appeal nor was it part of Ham’s appeal lodged in the Supreme court. Anyone reading the file causally would have established that there was no syndicated loan arrangement between Ham and the DTB banks.
In simple terms, a syndicated loan is an arrangement where two or more lenders come together to raise a loan to a customer by issuing the loan under the name of one of the lenders who is licensed to operate in the territory of the borrower.
In our case, DTB Kenya issued a direct credit facility of $4.5n by issuing offer letters on the 23rd of October 2017 and August 24, 2018 for $4m and $0.5m respectively. There was no syndicated loan offered by the DTB to Ham and each Bank made a separate loan offer.
In April 2023, the Commercial court of Tanzania sitting at Dar es Salaam delivered an instructive judgment on the legality of a loan issued by a foreign bank and an alleged arrangement of syndication in the case of Kilimanjaro Oil Ltd vs KCB (Tanzania) Ltd and KCB (Kenya) Ltd Commercial Case No. 7/2020.
In that case, KCB (Kenya) Ltd issued a loan of $15m directly to the plaintiff and KCB (Tanzania) Ltd, its subsidiary was the arranger/intermediary. The plaintiff challenged the legality of the transaction on the ground that it was procured in contravention of the banking and foreign exchange laws of Tanzania. The bank’s plea that this was a syndicated loan was rejected and court nullified the loan transaction for want of regulatory approval.
SOVEREIGNTY OF THE UGANDAN LAW
Under the principle of the sovereignty of laws, a country’s legislature passes laws for the governance and regulation of any matter conducted in that contrary.
If any person, local or foreign, is involved in any regulated matter in that country, that person is subject to the laws of that country to the extent that they are involved in the regulated activity.
It is, therefore, repugnant to the sovereignty of our national law for the Supreme court to have ruled that the Financial Institutions Act, which is the substantive law regulating banking business in Uganda, does not apply to foreign banks conducting the same business in Uganda.
Under Article 79 of the Constitution, it is only parliament which has the power to make laws on any matter for the peace, order, development and good governance of Uganda. These laws are made to govern all persons that dwell and operate in Uganda, whether local or foreign.
We take the view that the Supreme court had no power to usurp the power of parliament and start discriminating between foreign and local banks in respect of a statute of general application relating to the banking sector. (See Article 21 of the Constitution).
DENIAL OF A FAIR HEARING
Whereas there was no evidence of loan syndication, the Supreme court still allowed DTB to smuggle a ground of foreign loan syndication into Ham’s appeal.
This was allowed in violation of the rules of the court which required DTB to have submitted a cross-appeal or notice of affirmation of the decision of the court of Appeal before introducing new matters. (See Rules 87 and 88 of the Judicature (Supreme court Rules) Directions S. 113 – 11).
Whereas the court allowed DTB to flout its rules and seek orders outside the appeal, the same court could not allow Ham’s request to be heard on a formal application for judgment against DTB in respect of the admitted grounds of appeal (see Order 13 r. 6 Civil Procedure Rules).
It also refused to entertain an application to adduce additional evidence from the Central Bank of Kenya indicating that DTB Kenya had illegally conducted banking business in Uganda (see Rule 30 the Judicature (Supreme court Rules) Directions (supra).
The public policy of Uganda does not allow the courts to selectively apply their rules and the law to favour one party against the other nor does it allow the courts to deny a litigant access to the courts to plead his or her case. The Supreme court judgment in Ham vs DTB was issued in contravention of the constitution and its constitutionality shall be challenged.
Despite the court indicating that the application for judgment on admission would be considered in the final judgment, it made no mention of this application in the said judgment. What is odd is that the application to adduce additional evidence is pending ruling even if the court has issued its final judgment. This is a real mockery of the administration of justice.
THE SOCIO-ECONOMIC IMPLICATION OF THE JUDGMENT
It is ironic that the Supreme court decision is promoting a shadow banking system at a time when Uganda is struggling to get off the grey list of the Financial Action Task Force (FATF), an international watchdog which monitors countries with significantly weak anti-money laundering and terrorist financing enforcement regimes.
Whereas supporters of the Supreme court decision would like us to believe that the decision is endeared to international practice of foreign lending which will increase foreign cash inflows, studies show that grey-listing may lead to a decline of foreign capital inflows, downgrading of the country’s credit rating while increasing the cost of doing business in the respective country.
The latter occurs partly due to the attendant high costs on electronic and financial transfers of commercial banks, large costs on processing letters of credit, etc.
Logic would have dictated that allowing unregulated foreign banks to engage in predatory practices which compete against the regulated banks can only increase the fragility of the financial system. Syndicated loans are regulated financial transactions everywhere in the world. The Supreme court had no legal basis for ruling otherwise.
ABDICATION OF DUTY BY BOU
The BoU has abdicated its statutory duty by declaring that it does not regulate lending obtained from foreign banks since they do not take deposits from the Ugandan public.
However, one of the key functions of the Bank of Uganda is to maintain monetary stability. (See S. 4 Bank of Uganda Act Cap 51). One wonders how BoU maintains the monetary stability of the country when it refuses to monitor the external cash inflows from foreign sources.
Why should BoU, as a regulator of the banking industry, work so hard to constantly devise means of ensuring that some players in the Banking industry operate outside the rule book? It is the duty of BoU to ensure prudence of the monetary and fiscal policy of the country. It appears, however, that BoU has joined hands with the Supreme court to take us in the opposite direction.
CONCLUSION
In conclusion, though the Supreme court judgment is dangerous, it will remain largely irrelevant to the gainful regulation of commercial banking and the practice of the law in Uganda. No serious bank will be motivated to engage in illicit money transfers and come out to openly acknowledge it, because of this judgment.
Secondly, no serious court (including the Supreme court itself ) can allow to continue flouting its rules of procedure and the established principles of law. Any court which chooses to do that will cease to function as a court of law.
Thirdly, no serious lawyer in Uganda can risk his client’s case (whether local or foreign) by casually defying the court’s rules of procedure and the governing law of Uganda. We cannot just mourn the passing of this Supreme court decision; we shall challenge it.
The authors are Counsel for Ham Enterprises (U) Ltd, Kiggs International (U) Ltd and Hamis Kiggundu, The observer
Majaliwa said that the government has directed all schools to continue providing education to students from the pre-Primary level to Form Six about the consequences of engaging in immoral behaviours.
Dar es Salaam. The government has said that it will take strict action against all those who are proven to encourage and engage in acts that violate the Tanzanian society’s moral code, while stressing that the issue should not lie on its shoulders alone but requires cooperation to stop such acts.
Speaking while closing the 11th session of the 12th parliament in Dodoma on Wednesday, Prime Minister Kassim Majaliwa, along with many other issues, echoed about the moral decay that has been discussed since The Citizen published the investigation of the erosion of morals in schools early this year.
In The Citizen’s investigation titled: ‘There’s more to students’ failure than meets the eye’, the causes of massive failure in examinations in Mburahati and Mbagala secondary schools were revealed, with the main factors being indiscipline and moral decay among students. In the report, students under the age of 18 were identified as engaging in prostitution and others in homosexuality. This level of moral decay has prompted debate as it goes against Tanzania’s culture.
On Wednesday, when he adjourned parliament’s meeting until August 2023, Mr Majaliwa noted that, “Let me reiterate that this issue is not the government’s alone; we need the cooperation of every Tanzanian in stopping those actions that threaten the welfare of the workforce in this country.”
“We have to protect our future generations against foreign cultures that endanger the well-being and development of the Tanzanian society,” he said.
In another step, he said that the government has directed all schools to continue providing education to students from the pre-Primary level to Form Six about the consequences of engaging in immoral behaviours.
“The issue should go hand in hand with strengthening gender desks so that they can provide services to our children,” he said, adding that the government had continued to encourage community participation in condemning moral violations.
“I strongly urge my fellow Tanzanians to work together to raise our voices so that we can put an end to immorality that has a big impact on our current and future generations,” he said.
He further exuded confidence that the government, in protecting the morality and personalities of Tanzanians, has taken effective measures to control the promotion and spread of actions that are against the traditions and customs of the country.
According to him, the law review commission has already reviewed some laws, gathering opinions from various stakeholders to work on them.
The aim of the review was to identify areas of weakness that contributed or provided loopholes for the spread of such practices.
In addition, the government has developed national methods to deal with the challenge by involving all important stakeholders from the Mainland and the Zanzibar Islands, he noted. By Jacob Mosenda, The Citizen
The government is likely to take the case to the UK Supreme Court, further putting on hold any deportation plans.
The UK Court of Appeal has deemed the government's plan to send asylum seekers to Rwanda as unlawful, citing concerns about Rwanda's asylum system and the risk of deportation to unsafe countries.
The government is likely to take the case to the UK Supreme Court, further putting on hold any deportation plans. The Court of Appeal on Thursday ruled that the UK government's plan to send asylum seekers to Rwanda was unlawful as the African nation could not be considered a safe third country.
Three judges in London said that "unless deficiencies" in Rwanda's asylum system were corrected, "removal of asylum seekers to Rwanda will be unlawful."
They agreed with migrants and campaigners who brought the case that the UK government could not guarantee that asylum seekers sent to Rwanda would not be deported to the country from which they were fleeing.
"The deficiencies in the asylum system in Rwanda are such that there are substantial grounds for believing that there is a real risk that persons sent to Rwanda will be returned to their home countries, where they faced persecution or other inhumane treatment," said the judges.
A majority of judges were not convinced by Rwanda's assurances, saying that although made in good faith the evidence they presented "does not establish that the necessary changes had by then been reliably effected or would have been at the time of the proposed removals.
"In consequence, sending anyone to Rwanda would constitute a breach of Article 3 of the European Convention on Human Rights" which states that no one shall be subjected to torture, inhuman or degrading treatment or punishment, they added.
The Rwandan government told AFP that it remained committed to the plan.
"While this is ultimately a decision for the UK's judicial system, we do take issue with the ruling that Rwanda is not a safe country for asylum seekers and refugees," said government spokeswoman Yolande Makolo.
Makolo insisted that Rwanda was "one of the safest countries in the world" and said "we have been recognised by the UNHCR and other international institutions for our exemplary treatment of refugees".
But it triggered a wave of protests from rights groups and charities, while last-gasp legal challenges successfully blocked the first deportation flights last June.
Several individuals who arrived in small boats, and organisations supporting migrants, brought a case to the High Court in London, arguing that the policy was unlawful on multiple grounds, including the assessment of Rwanda as a safe third country.
Two High Court judges in December dismissed the claims, saying its only remit was "to ensure that the law is properly understood and observed, and that the rights guaranteed by parliament are respected".
The claimants - 10 asylum seekers from Syria, Iraq, Iran, Vietnam, Sudan and Albania, plus the charity Asylum Aid - then took their case to the Court of Appeal.
The government is likely to take the case to the UK Supreme Court, further putting on hold any deportation plans.
Yasmine Ahmed, UK director of Human Rights Watch, called the verdict "some rare good news in an otherwise bleak landscape for human rights in the UK".
"Rather than treating human beings like cargo it can ship elsewhere, it (the government) should be focusing on ending the hostile environment towards refugees and asylum seekers," she added.
Tackling asylum claims has become a political headache for the ruling Conservative government in London, despite its promise to "take back control" of the country's borders after Britain's departure from the European Union.
More than 11,000 people have already crossed the Channel from northern France this year, while the backlog of asylum claims being processed has reached record levels.
Johnson's short-lived successor Liz Truss and the incumbent Rishi Sunak have backed the Rwanda deal, which aims to send anyone deemed to have entered the UK illegally since January 1 to the African nation.
Sunak and his interior minister Suella Braverman have both said urgent action is needed to break smuggling gangs and to prevent further tragedies in the Channel.
An impact assessment report released this week estimated the plan will cost £169,000 ($210,000) per person, but that most of those costs would be recouped by not having to accommodate the claimants. The New Arab Staff & Agencies
IEBC Select Panel Chair Nelson Makanda, his Deputy Charity Kisotu and other members during the media update on the ongoing recruitment process of the IEBC Commissioners on March 28, 2023. [Elvis Ogina, Standard]
The bipartisan talks that prioritised reconstitution of the Independent Electoral and Boundaries Commission (IEBC) have seemingly collapsed but the IEBC selection panel is up and running.
In an exclusive interview with The Standard yesterday, the IEBC selection panel chairperson Nelson Makanda dismissed claims that their operations were suspended to give room for the bipartisan talks aimed at resolving political differences between President William Ruto and Azimio leader Raila Odinga.
“The IEBC panel is still working and has not abandoned its duties. The panel is in office, properly constituted and working. As a matter of fact, we are sitting tomorrow afternoon at 2.30 pm. There is nothing to hide,” he said.
Dr Makanda said the selection panel took a break on their own volition when political temperatures heightened in the country and denied allegations that they got orders from President Ruto to halt operations until a resolution is reached on by the bipartisan committee comprising of Azimio and Kenya kwanza legislators.
The bipartisan committee’s top agenda was finding a resolution on the mode of selection of the new IEBC commissioners.
However, the IEBC selection panel said they are working but with the consideration of the political atmosphere in mind.
Start shortlisting
“This panel has not adjourned and no directives from any arm of the government was given to adjourn. The panel took note of the political environment and realized that one of their key agenda was the composition of the panel and we decided to allow a process that remains peaceful,” Makanda told The Standard.
“Since I took office I am yet to receive any sort of communication from the Executive or anyone,” he added.
Before they went on a break the selection panel was to start shortlisting candidates to fill posts left vacant by the Wafula Chebukati-led commission.
“As at the 5pm deadline, the preliminary perusal of physical and electronic records indicates a total of nine online applications and 16 hard copy applications for Chairperson of the IEBC had been received,” Makanda told the press at KICC in Nairobi.
He further noted that the preliminary examination of their records had indicated that 900 applicants, out of which 385 had submitted hard copy applications while 515 had applied online for the positions of six commissioners of IEBC.
The selection panel was to embark on scrutinising the applicants physical and electronic submissions before they gazette the successful candidates to be interviewed.
Makanda revealed that they have already gone through the applications.
“The panel has taken judicial duty to thoroughly go through the names and qualifications so that we ensure that we are fair to each one of them. We know that we have a deadline so we are still working and on course to complete that task,” he told The Standard.
He further said that the selection panel has been meeting to discuss IEBC matters and that all their communications are on record.
“The panel has been meeting openly and there is nothing to hide. If the panel is meeting once in while all our proceedings are recorded. There are in Hansard,” he said.
And although they are yet to shortlist the applicants, Makanda said they are still on track and will adhere to constitutional timelines.
“No one is to blame for the delay, we are still on the timeline, we need to be careful when choosing those who will be mandate to take control of the IEBC. Remember the product of this panel has a great responsibility,” he said
Even though the selection panel chair insists that he has never received any instructions from political players, on Tuesday, the Bipartisan Committee co-chair George Murugara said Azimio had demanded that the committee writes to the team to stop them from undertaking their roles.
“But since there is no law backing us to instruct an independent institution as Kenya kwanza we were against the idea so we agreed to request the selection panel on its own volition and most likely because they are human beings and care for the nation, they could opt to suspend and that was our agreement,” he said. He however said Azimio went behind his back and redrafted the letter.
But Bipartisan Committee co-chair Otiende Amollo (Azimio) yesterday said they had already agreed that in the interim they would stop the selection process but Kenya Kwanza team later changed their minds arguing that the selection panel is an independent institution and cannot be directed.
“His argument is totally flawed because the bipartisan talks are founded on the sovereignty of the people. The IEBC or the selection panel cannot be independent in any event if we cannot instruct them in the interim to stop the process and to preserve the servers. How will we then eventually instruct them on our final decisions as a committee?” Amollo posed.
Makanda clarified that he was not in receipt of any letter from either Kenya Kwanza or Azimio.
Kenya Kwanza gave Azimio an ultimatum to resume talks on Tuesday next week failure to which the selection panel will proceed with reconstitution of IEBC.
But Amollo said: “These talks were predicated on a political agreement between Ruto and Raila. That was the foundation of the talks. It’s not about formalities. The talks have been dissolved. Our party leader announced it. What other formalities do they need?” By Grace Ng'ang'a, The Standard
Tricia Sinclair has completed an ultra-marathon across Tanzania (Alina Scanlen/Alinascanlen.com) / PA Media
Tricia Sinclair completed the 250km five-day feat called Ultra X Tanzania, which saw her traverse parts of Mount Kilimanjaro, on June 16. A British veteran who recently completed an ultra-marathon across Tanzania hopes to take on another extreme challenge to raise vital funds to improve fellow veterans’ mental wellbeing through cross-fit.
On June 16, Tricia Sinclair completed the 250km five-day running feat called Ultra X Tanzania, which saw her traverse 3,700m up Mount Kilimanjaro.
“I kind of went into it actually not even knowing if I would physically be able to finish the whole thing,” the 37-year-old from Twickenham, London, told the PA news agency.
“Obviously I’d done the training and was hoping for the best, but I’ve never run that far before.”
Despite never running “anything more than a marathon”, the 37-year-old was the 10th overall female – with a time of 37.01 hours – which was based on overall time taken to complete the feat.
Ms Sinclair served in the army for 14 years between 2008 and 2022, an experience she said she will “always be grateful for”.
She now works as the director of fitness for charity REORG, which helps rehabilitate veterans, military and emergency services personnel through functional fitness and jiu-jitsu.
Through the challenge, she hoped to raise £30,000 to allow 100 veterans and military and emergency services personnel to go through the charity’s 60 fitness programme – which uses cross-fit to improve health and wellbeing.
When previously speaking to PA, she said: “The idea of leaving the service is massive, it’s so daunting, it’s petrifying, because the idea of transferable skills and surviving in the civilian world is massive.
“My transition has been made so much easier because first of all, REORG offered me a job as a full-time member of staff, which has been amazing because it is surrounded around fitness, which I am massively passionate about, and it’s supporting people that I’ve been working with for the past 14 years.”
Ms Sinclair said the sense of community on the ultra-marathon was her favourite aspect.
“Day two came and there was a lot more elevation and that was when I really started to see the support of the other runners,” she said.
“There was so much incline, which meant that you had to walk quite a bit of it.
“I had a bit of a bad right knee and I didn’t take any poles with me as I didn’t really know the benefit of using them and one of the girls that I was running with gave me one of her poles and we pretty much ran the whole of day two together.”
The kindness of those taking part in the ultra-marathon was also demonstrated when a group of South African runners sang “happy birthday” to Ms Sinclair on her special day – which fell on the first day of the event.
“That was really cute. Then, I think somebody told the race organisers and they mentioned it in the evening and sang me ‘happy birthday’ as well, which was really sweet,” she said.
Ms Sinclair’s friends and family also sent her cards so she would have something to open while in Tanzania.
Her dad – Michael George Sinclair, 60 – was also there to greet her at the finish line.
“A whole wave of emotions came over me, I couldn’t believe what I’d just done – it was definitely one of the best experiences of my whole entire life,” she said.
“Dad was so proud and said this has inspired him to to sign up for a half marathon and one of the main reasons I wanted to do this was to inspire people to push themselves out of their comfort zone.”
Ms Sinclair documented the ultra-marathon using a GoPro and particularly wanted to “capture the bits where I’m absolutely hanging out”.
“It’s funny because on the first day, I was using the GoPro loads and was running with it a lot because I had bags of energy,” she said.
“By day three, even just getting that GoPro out of my bag was such a hindrance – but I still caught a lot.
“The last day especially was the hardest for me, so I pretty much had the GoPro in my hand the whole day.”
She described the ascent up Mount Kilimanjaro on day three as “savage”.
“I spent about five-and-a-half hours just stomping uphill and I was pretty much alone for most of that day,” she said.
“Then there was a lot of downhill, so I think that day took me seven-and-a-half hours to complete.”
However, she added: “The scenery, the locals were absolutely amazing – they were cheering us on every single day.”
Day four consisted of Ms Sinclair running in the pitch black, with a headtorch on for several hours, but also being supported by a group of fellow female runners who came up with a game plan to get them through it.
With Ms Sinclair’s fundraising target yet to be met and her page still live, she said she has plans to take on another challenge.
“I’ve actually been invited to go to the Ultra X championships in June of next year, so I might think of doing that,” she said.
“But I also like the idea of potentially doing an Ironman as well because I like the fact that its got three disciplines in it.”
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