Wakilii

Cyan Uganda Limited and Others v Stanbic Bank Uganda Limited (MISC. APPLICATION NO. 627 OF 2018)

High Court · [2019] UGCOMMC 243 · 2019 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend a summary suit arising from Civil Suit No. 622 of 2018
Decision
Applicants granted leave to defend; matter proceeding to mediation and potential trial

Observed later treatment

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Holding

The court granted the applicants unconditional leave to appear and defend. The applicants raised triable issues concerning disputed amounts owed to the bank, alleged unreconciled credits, potential insurance policy offsets, and liability under personal guarantees. These matters required full investigation beyond summary proceedings and could not be resolved without trial.

Outcome

Applicants granted leave to defend; matter proceeding to mediation and potential trial

Facts

Stanbic Bank instituted a summary suit (Civil Suit No. 622 of 2018) claiming USD 80,293.38 and UGX 490,978,932 owed by Cyan Uganda Limited under various loan facilities secured by personal guarantees from Esmail Daoud and Esmail Amyn. The applicants applied for unconditional leave to defend, contending: (a) discrepancies existed between claimed amounts and actual indebtedness; (b) credits totalling approximately UGX 3 million were not applied to reduce liability; (c) the bank held a Lender's All Risk Insurance Policy covering borrower default with maximum cover of USD 105,100 which should offset amounts claimed; (d) the amounts required reconciliation and accounting; (e) guarantors should not be pursued before exhausting remedies against the principal debtor. The bank opposed, arguing the applicants had no bona fide defence and admitted indebtedness.

Issues

  1. Whether the applicants raised any triable issues for which they could be granted leave to appear and defend the summary suit.

Orders

  • Leave to appear and defend granted.
  • Applicants directed to file written statement of defence within 14 days from delivery of ruling.
  • Matter referred for mediation proceedings.
  • Costs to abide the cause.

Rules and key headnotes

Civil Procedure — Summary Suits — Leave to Appear and Defend — Test for Granting Leave
In an application for leave to appear and defend a summary suit, the court is not required to determine the merits of the suit but only whether the defendant has shown good cause to be given leave to defend by demonstrating a bona fide triable issue of fact or law.
Civil Procedure — Summary Suits — Triable Issues — Disputed Quantum Requiring Accounting
Where an applicant disputes the quantum of a debt claimed in a summary suit and raises issues requiring account reconciliation, audit, or set-off of credits allegedly not applied, these constitute triable issues warranting grant of leave to appear and defend.
Banking & Finance — Bank Guarantees — Liability of Guarantors — Privity of Contract — Insurance Policies
An insurance policy taken out by a bank does not automatically benefit a borrower unless the borrower is a party to the insurance contract, subject to applicable law governing the policy including provisions for third party rights under contracts.
Civil Procedure — Summary Suits — Written Statement of Defence — Relevance to Application for Leave
Attachment of a proposed written statement of defence to an application for leave to appear and defend serves a good purpose in helping the court determine whether the defendant has a defence upon which leave should be granted or refused.

Legislation cited (6)

Cases cited (14)

  • Makula Interglobal Trade Agency v Bank of Uganda (HCCS No. 950 of 1985)
  • Jimmy Kasule v Steel Rolling Mills [1995] HCB 11
  • UCB v Mukoome Agencies [1982] HCB 22
  • Marsenne (Uganda) Limited & Others v Stanbic Bank (U) Limited (HCMA No. 482 of 2014)
  • George Begumisa v East African Development Bank (Misc. Application No. 451 of 2010)
  • Makula Interglobal Trade Agency Ltd v Bank of Uganda [1985] HCB 65
  • Abubakar Kato Kasule v Tomson Muhutezi [1992-1993] HCB 212
  • Kotecha v Mohammed [2002] 1 EA 112
  • Sau Vs Hakim 5 TLR 72
  • Ray Vs Barker 4 Ex DJ 279
  • Walusaga Daniel v Barclays Bank of Uganda Limited (Misc. Application No. 966 of 2016)
  • Halal Shipping Ci. Ltd v Seanities Bremmer Allegemeine [1965] E.A 690
  • Geoffrey Gatete & Anor v William Kyobe [2000] HCB 1
  • Hasnani v Banque du Congo Belge [1938] 5 EACA 89

Full judgment

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

Cyan Uganda Limited and Others v Stanbic Bank Uganda Limited (MISC. APPLICATION NO. 627 OF 2018) [2019] UGCommC 243 (26 August 2019)
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.