Dfcu Bank to Appeal High Court Ruling Ordering Payment of UGX 34 Billion to Businessman

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Dfcu Bank has announced its intention to appeal a recent High Court ruling that held it liable for a payment of over 34 billion Ugandan Shillings (approximately $9.5 million) to businessman Ephraim Ntaganda and his company, Excellent Assorted Manufacturers.

High Court Judge Boniface Wamala issued the ruling on August 16, 2023, which also includes a directive for the bank to return several land titles to Mr. Ntaganda and his company. Dfcu Bank has taken issue with the judgment and is seeking to overturn it through the appeal process.

Jude Kansiime, the head of marketing at dfcu Bank, confirmed the bank’s decision, stating, “The judgment was issued against dfcu, and the bank intends to appeal the judgment, and has filed a notice of appeal. Dfcu Bank will continue to pursue its rights within the confines of the law.”

The case involves multiple objections raised by Mr. Ntaganda, including disputes related to deductions from his personal account and the one belonging to his company, which was previously held by Crane Bank. Dfcu Bank took over many of the assets of Crane Bank after it was closed by the Bank of Uganda.

Mr. Ntaganda’s legal argument revolved around the claim that Crane Bank had presented him with letters for annual sign-off, which he trusted were prepared honestly and in good faith. The court found that dfcu Bank, through the defunct Crane Bank, had breached contractual and fiduciary duties by dealing with Ntaganda’s accounts “in an unlawful, unauthorized, and/or irregular manner.”

As part of the ruling, Judge Wamala ordered dfcu Bank to make payments totaling $2.9 million and 9.9 billion Ugandan Shillings to Mr. Ntaganda and his company, respectively. The bank was also directed to release 2.75 billion Ugandan Shillings held by the bank to both Mr. Ntaganda and Excellent Assorted Manufacturers Assorted Ltd.

Additionally, dfcu Bank was instructed to pay 500 million Ugandan Shillings as general damages to Mr. Ntaganda and his company, along with interest on the general damages at a rate of eight percent per annum from the date of judgment until full payment.

Furthermore, dfcu Bank was ordered to pay interest on the sum of 3.1 billion Ugandan Shillings at a rate of 24 percent per annum from the date of judgment until full payment.

The bank was given 45 days from the date of the judgment to release certificates of title for various properties, as specified in the court’s orders.

While dfcu Bank seeks to challenge the High Court’s decision through the appeals process, this case highlights the complexities and legal challenges that can arise in the banking and financial sector.

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