Wakilii

Bei Investments Ltd v Mutebi Swalik (Civil Suit 733 of 2024)

High Court · [2026] UGCOMMC 320 · 2026 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of loan amounts with interest
Decision
Judgment entered for the plaintiff with orders for payment of principal amounts plus accrued interest under the agreements, ongoing interest on defaulted sums, general damages, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division held that two loan agreements executed in August and November 2023 were valid and binding. The defendant breached both agreements by failing to repay Ugx 10,000,000 and Ugx 13,000,000 respectively within the agreed periods. Court awarded the plaintiff Ugx 11,500,000 under the first agreement (principal plus one month's interest at 15%) and Ugx 16,380,000 under the second agreement (principal plus two months' interest at 13%), plus continuing interest at 25% and 20% per annum respectively on the defaulted amounts, general damages of Ugx 5,000,000, and costs.

Outcome

Judgment entered for the plaintiff with orders for payment of principal amounts plus accrued interest under the agreements, ongoing interest on defaulted sums, general damages, and costs

Facts

In August and November 2023, the defendant approached the plaintiff for two loans totalling Ugx 23,000,000. The first loan of Ugx 10,000,000 was advanced on 21 August 2023 at 15% monthly interest, repayable within one month. The second loan of Ugx 13,000,000 was advanced on 1 November 2023 at 13% monthly interest, repayable within two months. Both loans were secured by motor vehicle registration number UBK 824U offered as collateral. The defendant failed to repay either loan according to the agreed terms. The plaintiff made several demands for payment which the defendant ignored. The plaintiff then engaged lawyers who issued demand letters and notices, but the defendant continued to neglect his obligations. The defendant did not enter appearance or file a defence in the suit.

Issues

  1. Whether there were valid loan agreements between the plaintiff and the defendant?
  2. Whether the defendant is in breach of the said agreements?
  3. Whether the plaintiff is entitled to the sums claimed and general damages?

Orders

  • The defendant breached the loan agreements it had with the plaintiff.
  • The defendant shall pay the plaintiff a sum of Ugx 11,500,000 being the money borrowed under the first loan agreement.
  • The defendant shall pay the plaintiff a sum of Ugx 16,380,000 being the money borrowed under the second loan agreement.
  • Interest is awarded on the sum in order 2 at a rate of 25% per annum from the date of default until payment in full.
  • Interest is awarded on the sum in order 3 at a rate of 20% per annum from the date of default until payment in full.
  • The plaintiff is awarded general damages of Ugx 5,000,000.
  • The plaintiff is awarded the costs of the suit.

Rules and key headnotes

Contract Formation — Validity of Loan Agreements — Essential Elements
For a contract to be valid and legally enforceable there must be capacity to contract, intention to contract, consensus ad idem, valuable consideration, legality of purpose and sufficient certainty of terms.
Ex Parte Proceedings — Burden of Proof — Plaintiff's Obligation Despite Defendant's Absence
Even though a defendant does not file a defence or enter any appearance, the plaintiff still bears the burden of proving its case on a balance of probabilities.
Pleadings — Effect of Failure to File Defence — Deemed Admission
A party that fails to file a defence is deemed to have admitted the allegations in the plaint.
Contractual Interest — Court's Discretion to Reduce Harsh and Unconscionable Rates
Where an agreement for the payment of interest is sought to be enforced and the court is of the opinion that the rate agreed to be paid is harsh and unconscionable and ought not to be enforced by legal process, the court may give judgment for the payment of interest at such rate as it may think just. The provision envisages the enforcement of contractual interest unless the rate agreed upon is harsh and unconscionable.

Legislation cited (3)

Cases cited (7)

  • Kirungi and another v Kabiya and three others [1978] KLR
  • Greenboat Entertainment Ltd v City Council of Kampala (Civil Suit No. 0580 of 2003)
  • Ronald Kasibante v Shell Uganda Ltd (Civil Suit No. 542 of 2006)
  • Smith v Auto Electric Services Ltd (1951) 24 KLR 22
  • Groffin East Africa Fund LLC v Investec Uganda Ltd & 2 Others (Civil Suit No. 374 of 2011)
  • Stroms v Hutchinson [1905] AC 515
  • Hadley v Baxendale (1894) 9 Exch 341

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Bei Investments Ltd v Mutebi Swalik (Civil Suit 733 of 2024) [2026] UGCommC 320 (26 June 2026)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.