Wakilii

Global Trust Bank (U) Ltd v Hon. Issa Kikungwe (Civil Suit 111 of 2014)

High Court · [2017] UGCOMMC 309 · 2017 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Preliminary objection to a first instance civil suit for recovery of money arising from breach of contract
Decision
Preliminary objection dismissed; DFCU Bank Ltd to be added as a party; matter to proceed to trial on the merits

Observed later treatment

Cited — treatment unverified cited in 1 (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 1 time 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

A bank that filed suit to recover a debt before its licence was revoked and winding up commenced remains a proper party to that suit. The revocation of a banking licence after suit is filed does not render the proceedings a nullity where the cause of action arose from a valid contract entered into when the bank held a valid licence. However, where events such as licence revocation and transfer of assets occur, the successor bank may be added as a party to determine the real matter in dispute.

Outcome

Preliminary objection dismissed; DFCU Bank Ltd to be added as a party; matter to proceed to trial on the merits

Facts

The plaintiff bank sued the defendant in February 2014 for recovery of UGX 273,134,276 arising from a credit facility agreement dated 26 May 2011. The defendant was granted leave to file defence and did so in May 2014. In July 2014, after the suit was filed, the Bank of Uganda revoked the plaintiff's banking licence and ordered the winding up of its affairs under the Financial Institutions Act 2004. Bank of Uganda concluded a purchase and assumption agreement with DFCU Bank Ltd, which took over all deposits of the plaintiff bank. All former borrowers were directed to continue servicing their loan obligations with DFCU Bank Ltd. The defendant raised a preliminary objection that the plaintiff was not an existing party and not a proper party to the suit.

Issues

  1. Whether the plaintiff is an existing party and proper party to the suit following revocation of its banking licence and winding up of its affairs by the Bank of Uganda.

Orders

  • Preliminary objection dismissed.
  • DFCU Bank Ltd to be added as a party to the suit under Order 1 rules 9 and 10 of the Civil Procedure Rules.
  • Costs to abide the cause.

Rules and key headnotes

Banking & Finance — Revocation of Banking Licence — Capacity to Sue — Suit Filed Before Revocation
Where a bank files suit to recover a debt before its banking licence is revoked and winding up proceedings are commenced, the bank remains a proper party to that suit and the proceedings are not rendered a nullity by the subsequent revocation of its licence.
Civil Procedure — Proper Parties — Addition of Parties — Commercial Court
Where significant events occur after a suit is filed, such as revocation of a plaintiff bank's licence and transfer of its assets and liabilities to a successor bank, the court may direct that the successor bank be added as a party under Order 1 rules 9 and 10 of the Civil Procedure Rules to determine the real matter in dispute.
Contract Law — Contractual Liability — Obligations of Debtor Following Revocation of Creditor's Licence
The revocation of a bank's licence does not extinguish a debtor's contractual obligation to repay a loan obtained when the bank held a valid licence. Customers who had debts with a bank must repay the same regardless of whether the bank's licence was subsequently revoked.
Civil Procedure — Preliminary Objection — Capacity to Sue — Existence of Party
A preliminary objection that a plaintiff is not an existing party must be supported by conclusive evidence. Mere reference to a bank's website or witness statements is insufficient where there is no concrete evidence such as a resolution filed with the Registrar of Companies proving the plaintiff ceased to exist at the time the suit was filed.

Legislation cited (10)

Cases cited (1)

  • Makula International v Cardinal Wamala (HCB 11 of 1982)

Cases citing this judgment (1)

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.

Global Trust Bank (U) Ltd v Hon. Issa Kikungwe (Civil Suit 111 of 2014) [2017] UGCommC 309 (21 August 2017)
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.