On May 5th, 2023, a panel of judges was convened in Uganda to decide a case that will test the independence of the Ugandan judiciary. The case in question involves Diamond Trust Bank (DTB) and its illegal withdrawal of Ugandan Shillings 120 billion from Ham Enterprises (U) Limited accounts. DTB admitted to these illegalities on court records when Kiryowa Kiwanuka, the current Attorney General, revealed that DTB had no license to operate in Uganda.
A judgment was made in favour of Ham Enterprises at the High Court for the recovery of the debited money from the bank. However, the bank and its lawyers, K & K advocates, admitted the failure of the Court of Appeal to address the substantial point of illegality in their submission of November 5th, 2021, at the Supreme Court.
This case raises several key questions about the independence of the judiciary and the ability of politicians to influence legal proceedings. Can Kiryowa Kiwanuka’s political influence and Mr. Karugire’s marital status save Diamond Trust Bank from the illegalities it committed and admitted on court records? Does Kiryowa Kiwanuka being the Attorney General and, at the same time, a partner in K & K advocates amount to a conflict of interest that compromises the independence of the judiciary? Can the Ugandan Supreme Court shield an illegality contrary to the international baseline for judicial proceedings and legal structures? Are the Supreme Court judges strong enough to administer justice and uphold the law?
In any society, when politicians and public servants start financially competing with the private business community, it compromises the socio-economic development and upward transformation of the society at large. They start using their positions to undermine all structures, systems, and policies put in place to carry the nation forward. This case will test the ability of the Ugandan judiciary to resist such pressures and administer justice fairly.
The case dates back to March 2020 when Ham Enterprises filed a suit against DTB for recovery of monies unlawfully debited from its accounts in excess of Ugx. 120 billion. The bank unlawfully withdrew these amounts over a spread period of 10 years in excess of all the company’s liabilities to the bank. Kirwowa Kiwanuka admitted on court records in September 2020 that DTB Kenya did not have a license permitting it to conduct banking business in Uganda, and neither did DTB Uganda have the authority to conduct agency business on behalf of DTB Kenya, thereby contravening sections 4(1) and 117 of the Financial Institutions Act and banking regulations.
On October 7, 2020, a judgment was entered in favor of Ham Enterprises (U) Limited at the High Court by Hon Justice Henry Peter Adonyo. Karugire and Kilyowa Kiwanuka, using their political influence, demoted and transferred the judge immediately from the head of the High Court, commercial division, to Soroti. This raised concerns about the influence of politicians and public servants on the judiciary.
Diamond Trust Bank’s admissions that they committed illegalities on court records will be a crucial factor in the Supreme Court’s decision. The bank emphasized that “The Court of Appeal justices erred at law when they failed to address the substantial point of illegality upon which judgment was rightfully entered at the High Court, specifically stating that ‘The learned Justices were entitled to first deal with the grounds regarding the procedure adopted by the trial Judge in striking out the defendants’ pleadings and granting the impugned orders before dealing with the other grounds.'” This admission further reveals that the bank never sought the permission of the Bank of Uganda to carry out its business in Uganda as required, violating sections 4(1) and 117 of the Financial Institutions Act.
Now, as the case comes before the reconstituted panel of judges, many questions are being raised about the independence of the Ugandan judiciary. The case has become a test of whether the judiciary can stand up to powerful political and economic interests and deliver justice to ordinary citizens.
One key question is whether Kiryowa Kiwanuka’s political influence as the current Attorney General and his marital status can save Diamond Trust Bank from the illegalities it has admitted to on court records. Many Ugandans are concerned that the Attorney General’s position could represent a conflict of interest, which could compromise the independence of the judiciary.
In any society, when public officials compete financially with the private business community, it can undermine the development and transformation of the entire society. As politicians and public servants use their positions to undermine structures, systems, and policies put in place to carry the nation forward, ordinary citizens suffer.
The case against Diamond Trust Bank has many quick facts that are important to note. The bank unlawfully debited UGX 120 billion from Ham Enterprises (U) Limited accounts and admitted to committing illegalities at the High Court on court records when Mr. Kiryowa Kiwanuka told the court that DTB had no license to operate in Uganda. Judgment was made in favor of Ham Enterprises at the High Court for the recovery of the debited money from the bank.
In addition to these admissions, the bank and its lawyers, K & K advocates, admitted the failure of the Court of Appeal to address the substantial point of illegality in their submission of November 5th, 2021, at the Supreme Court. On November 11th, 2021, Ham filed an application stating that DTB had concurred with him that the Court of Appeal justices did not address the issues of illegality contrary to the provisions of the Financial Institutions Act, on which grounds judgment was rightfully entered at the High Court.
Given these admissions, many are wondering whether the Ugandan Supreme Court can shield an illegality contrary to the international baseline for judicial proceedings and legal structures. The Supreme Court judges must be strong enough to administer justice and uphold the law, regardless of any political or economic pressures that may be brought to bear on them.
The case against Diamond Trust Bank has become a symbol of the problems facing Uganda’s poorly regulated banking system. If the bank is allowed to escape the law, it could have a devastating effect on the country’s economic development and on the lives of ordinary citizens.
The case against Diamond Trust Bank will be decided by the reconstituted panel of judges. The eyes of the nation are on them, and the decision they make will have a profound impact on the future of the Ugandan judiciary and on the country’s ability to deliver justice to all its citizens. Whatever the outcome, it is clear that this case will be remembered as a pivotal moment in Uganda’s legal history.
