Barclays Bank Limited v Dhakaba Abdu T/A Fone Solutions (Civil Suit No. 160 of 2013) [2025] UGCommC 194 (27 June 2025)

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL COURT DIVISION) CIVIL SUIT NO. 0160 OF 2013

BARCLAYS BANK LIMITED::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF VERSUS

DHAKABA ABDU T/A FONE SOLUTIONS::::::::::::::::::::::::::::::::::::::::::DEFENDANT

10 Before: Hon. Lady Justice Dr. Ginamia Melody Ngwatu

JUDGMENT

BRIEF FACTS

- 15 The plaintiff brought this suit against the defendant for recovery of an outstanding debt of 89,328,602/=, interest at the commercial rate from the date of filing till payment in full and costs of the suit. - The background of the matter is that the plaintiff, formerly Nile Bank, granted the 20 defendant an unsecured credit facility of UGX, 26,000,000 (Uganda Shillings twenty-six million only) on 22nd day of October, 2008. A second loan of UGX 90,000,000 (Uganda Shillings ninety million only) was availed to the defendant on 30th May 2009, while the first loan was still subsisting. The said loan had been secured by land comprised in Kyaggwe Block 101, Plot 2329 and Kyaggwe Block 101, Plot 2332 in the name of 25 Shaban Saqid Nkuutu Muwabe; and land comprised in Singo Block 119, plot 33 in the name of Maliko Suna. Further, the loan agreement that was signed between the plaintiff and the defendant had a set-off clause which entitled the plaintiff to offset any outstanding amount due and outstanding owed under the contract to the plaintiff by the defendant. The defendant defaulted on servicing the loan which prompted the plaintiff to 30 recall the loan and commence the foreclosure process against the defendant in a bid to recover the outstanding sums due. During the foreclosure process, the wife to Shaban Sadiq Nkutu, in whose name some of the loan securities were listed, instituted a suit halting the sale of the property on the ground that they were matrimonial property and they ought not to have been mortgaged without her consent as the legal wife. The said 35 property were redeemed by Shaban Nkutu Muwabe at an amicably settled sum of Ugx

20,000,000. The rest of the property in Singo Block 119 Plot 33 at Nakitolo were foreclosed leaving a sum of Ugx 82,261,462 as the outstanding sum; hence this suit to recover the said sum from the defendant through court process.

5 REPRESENTATION

The plaintiff was represented by KSMO Advocates, while the defendant was initially represented by M/s Jingo, Ssempijja & Co Advocates who filed a written statement of defense and later M/S Kisaalu & Co Advocates; but they subsequently withdrew from representing the defendant. The defendant did not enter appearance during the hearing 10 even though he was served through substituted service, upon failure of personal service to be effected. In the premises, the matter proceeded exparte.

ISSUES FOR DETERMINATION

The following issues were presented before court for determination:

15 1)Whether the defendant is indebted to the plaintiff in the amount claimed?

2)What remedies are available to the parties?

RESOLUTION

20 The issues that were raised before court are determined as follows:

1)Whether the defendant is indebted to the plaintiff in the amount claimed?

A loan is money provided to a borrower by a financial institution, such as a bank, with the prospect that the borrower will repay the principal amount plus interest over an 25 agreed specified period. The lending/borrowing of such money is governed by the law of contract. A contract is defined under Section 9(1) of the Contracts Act cap 284 as an agreement made with the free consent of parties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound.

30 In this instance, the parties herein were bound by the loan agreement they entered into and the loan obligations thereunder. It follows, therefore, that where there is non-payment of a loan, it becomes a debt-owed, for which the plaintiff is entitled to make a claim in a bid to recover the outstanding debt. It then becomes incumbent on the plaintiff to make out a case for the outstanding debt.

In the case of *Standard Chartered Bank (U) Limited vs Ssekamatte Civil Suit 873 of 2020* court noted that *"in all civil litigation, the burden of proof requires the plaintiff, who is the creditor, to prove to court on a balance of probability, the plaintiff's entitlement to*

5 *the relief being sought*". The plaintiff must show court why the defendant / debtor owes the money claimed and show the existence of a contract and its essential terms, together with a breach of a duty imposed by the contract and resultant damages.

The plaintiff must present evidence to prove each element of their claim or cause of 10 action to recover the outstanding debt. The plaintiff must also demonstrate through evidence that it is more likely than not that their claims are true.

The plaintiff herein adduced evidence of Pw 1 Ahumuza Timothy whose evidence was to the effect that the defendant applied for and obtained an unsecured loan of UGX 26,000,000/= (P Ex 10) on 22nd 15 October 2008. The defendant further applied for and obtained another loan worth UGX 90,000,000/= on 6th May 2009; which loan was secured by property at Kyaggwe Block 101, plot 2329 and Kyaggwe Block 101, Plot 2332 registered in the names of Shaban Saqid Nkuutu Muwabe; and land comprised in Singo Block 119, Plot 33 Nakitokolo registered in the names of Malik Suna. PW 1 20 presented P Ex3, the defendant's account statement, to prove that the loan amount was disbursed to the defendant.

Further, PW 1, in paragraph 7 of their witness statement stated that the defendant defaulted on servicing the loan for several months and this led to the loan being recalled 25 by the plaintiff and the commencement of the foreclosure process against the defendant. The outstanding balance as proved before this court is UGX 82, 261,462/= as the plaintiff was unable to retrieve supporting documents for the amount of UGX 89,328,602 as claimed in the plaint.

30 Thus, it was confirmed that the defendant and plaintiff had a contractual relationship established by the loan agreements (P Ex 10 and 11); which show that the plaintiff advanced loan facilities to the defendant and the same were not fully paid.

In the case of *Barclays Bank Uganda Limited vs Musinguzi Civil suit 349 of 2015*, court noted that "*once the plaintiff makes out a prima facie case in his favour, the burden shifts to the defendant to controvert the plaintiff's case otherwise, judgment must be entered in favour of the plaintiff."*

5 The defendant did not adduce any evidence to prove payment of the outstanding balance on the loan as the hearing proceeded *ex parte* due to his non-appeaarance. In the circumstances, the defendant is indebted to the plaintiff in a sum of UGX 82,261,462/=.

2)What remedies are available to the parties

10 Considering that the defendant is indebted to the plaintiff for the outstanding sums owed, the defendant still as loan obligations he did not fulfil. Section 32 of the Contract Act cap 284 provides that:

> *"the parties to a contract shall perform or offer to perform, their respective promises, unless the performance is dispensed with or excused under this Act*

15 *or any other law"*

The defendant herein still has obligations to fulfil under the loan agreement, which he must satisfy through the payment of the outstanding debt. In the case of *Barclays Bank of Uganda Ltd vs Howard M. Bakojja Civil Suit No 53 of 2011,* court held that the only compensation for non-payment of a debt is payment of the debt. It follows, therefore, that 20 the plaintiff herein is entitled to the outstanding debt owed and the defendant must satisfy the debt.

The plaintiff also prayed that they be granted interest at commercial rate from the date of filing of the suit. Section 26 (2) of the Civil Procedure Act cap 282 provides that court 25 may order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree. Court thus has discretionary powers to order interest at such rate as the Court deems reasonable to be paid on the principal sum. In the case of *Milly Mirembe vs Sugarcane Cooperation of Uganda Lugazi and another SCCA No. 1 of 2000,* court held that for commercial ventures, 30 the offending party should always pay interest at commercial rate. In the exercise of court's discretion under section 98 of the Civil Procedure Act Cap 282, I award interest at 6% per annum from the date of filing this suit until payment in full.

The plaintiff herein also sought costs of the suit. Cost are provided for under section 27(1) of the Civil Procedure Act Cap 282, which states that "*…the costs of and incident to all suits shall be in the discretion of the court or judge…"*

Considering that the plaintiff is the successful party in this case, the plaintiff is granted

5 the entitled to costs of this suit.

Judgement is accordingly entered for the plaintiff in the following terms:

- 1. The defendant pays the plaintiff UGX 82,261,462/=, being the outstanding loan debt. - 10 2. The defendant pays the plaintiff interest at 6% per annum on no. 1 above, from the date of filing this suit until payment in full. - 3. Costs of the suit.

I so order.

*Dr. Ginamia Melody Ngwatu Ag. Judge 27 th* 20 *June 2025*

*Ruling delivered electonically via ECCMIS*