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Galaxy Concepts Ltd and Others v Equity Bank (U) Ltd (Miscellaneous Application 1135 of 2024)

High Court · [2025] UGCOMMC 105 · 2025 Application Partly Allowed; Judgment on Admission Entered 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 for recovery of a liquidated sum
Decision
Judgment entered for respondent in the admitted principal sum of USD 331,100; applicants granted leave to defend remaining claims concerning interest computation and rates

Observed later treatment

Cited — treatment unverified cited in 2 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 2 times with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The court held that the applicants raised triable issues concerning the computation of the liquidated sum, the reasonableness of the 10% penal interest, and the permissibility of the 25% interest rate claimed. However, the applicants unambiguously admitted indebtedness in the principal sum of USD 331,100 without proving any payments. Judgment was entered for the respondent in that admitted sum under Order 36 rule 6. The applicants were granted unconditional leave to defend the remaining claims concerning interest computation and rates.

Outcome

Judgment entered for respondent in the admitted principal sum of USD 331,100; applicants granted leave to defend remaining claims concerning interest computation and rates

Facts

The 1st applicant, Galaxy Concepts Ltd, obtained an invoice discounting facility of USD 331,100 from the respondent bank under a loan agreement executed on 17 July 2023. The facility was repayable within six months as a bullet payment, attracting interest at 13% per annum, with a default interest of 10% per annum and a processing fee of 2%. The 2nd and 3rd applicants executed personal guarantees as directors of the 1st applicant. The 1st applicant defaulted on repayment. The respondent filed a summary suit claiming USD 362,137 as at 28 March 2024, comprising principal and accumulated interest, plus 25% interest till payment in full. The applicants applied for leave to defend, contending that the interest computation was erroneous, the penal interest was unconscionable, and the 25% interest rate was not permissible by law.

Issues

  1. Whether the applicants disclosed triable issues warranting the grant of leave to appear and defend the summary suit.
  2. Whether the liquidated sum of USD 362,137 claimed by the respondent is the correct indebtedness requiring reconciliation of accounts.
  3. Whether the penal interest of 10% per annum is an unreasonable pre-estimate of damages.
  4. Whether the interest of 25% per annum claimed in the summary plaint is permissible by law.
  5. Whether the applicants made an unambiguous admission of indebtedness in the principal sum of USD 331,100 entitling the respondent to judgment on admission.

Orders

  • Judgment entered for the respondent against the applicants in the sum of USD 331,100.
  • Applicants granted unconditional leave to appear and defend the rest of the claim, being USD 362,137 less USD 331,100, the penal interest of 10% per annum, and the interest of 25% on the reduced sum till payment in full.
  • Costs of the application to abide the result of the suit.
  • Applicants to file and serve written statement of defence within ten (10) days.
  • Parties to file joint memorandum of scheduling and trial bundles within twenty-one (21) days thereafter.
  • Hearing of the suit fixed for 30th September 2025 at 9:00 am.

Rules and key headnotes

Summary Suits — Leave to Appear and Defend — Triable Issues
Unconditional leave to appear and defend a summary suit will be granted where the applicant shows a good defence on the merits, a difficult point of law is involved, a dispute which ought to be tried, a real dispute as to the amount claimed requiring an account, or any other circumstances showing reasonable grounds of a bona fide defence.
Summary Suits — Admission of Indebtedness — Judgment on Admission
Where an applicant in a summary suit makes an unambiguous, clear, unequivocal and positive admission of indebtedness in a specific sum without proving any payment of that sum, the court may enter judgment for the admitted amount under Order 36 rule 6 of the Civil Procedure Rules while granting leave to defend the remaining contested claims.
Interest Rates — Penal Interest — Judicial Scrutiny
A penal interest rate expressly agreed to by parties in a loan agreement may still be subject to judicial scrutiny for unreasonableness or unconscionability, and the court may exercise its discretion under section 26(1) of the Civil Procedure Act to award interest at such rate as it may think just.
Summary Suits — Interest Claims — Permissibility
Under Order 36 rule 2 of the Civil Procedure Rules, interest on a liquidated amount in a summary suit may only be recovered where the underlying agreement expressly provides for such interest. Where the claim for interest is not provided for in the underlying instrument, the claim for interest constitutes a triable issue that cannot be dealt with under summary procedure.
Burden of Proof — Payment of Debt
Under section 103 of the Evidence Act, the burden of proof of any particular fact lies on the person who wishes the court to believe in its existence. A party claiming to have made payments towards a loan must prove such payments in evidence and cannot discharge this burden through submissions from the bar.

Legislation cited (10)

Cases cited (12)

  • Maluku Interglobal Trade Agency v Bank of Uganda [1985] HCB 65
  • MMK Engineering v Mantrust Uganda Ltd (High Court Miscellaneous Application No. 128 of 2012)
  • Proline Soccer Ltd v Mulindwa and 4 Others (Miscellaneous Application No. 9459 of 2009)
  • John Peter Nazareth v Barclays Bank International Limited (EACA 39 of 1976)
  • St. Balikuddembe Market Stalls, Space and Lock up shop Owners Association Ltd v Kampala Capital City Authority (Civil Suit No. 353 of 2018)
  • Kibalama v Alfasan Belgie CVBA (2004) 2 EA 146
  • Bhaker Kotecha v Adam Muhammed [2002] 1 EA 112
  • Begumisa George v East African Development Bank (Miscellaneous Application No. 451 of 2010)
  • Jamil Senyonjo v Jonathan Bunjo (High Court Civil Suit No. 180 of 2012)
  • Arjabu Kasule v F. T. Kawesa [1957] EA 611
  • E. M. Cornwell & Co. Ltd v Shantaguari Dahyabhai Desai (1941) 6 ULR 103
  • Uganda Transport Co. Ltd v Count de la Pasture (1954) 21 EACA 163

Cases citing this judgment (2)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

Galaxy Concepts Ltd and Others v Equity Bank (U) Ltd (Miscellaneous Application 1135 of 2024) [2025] UGCommC 105 (30 May 2025)
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.