Wakilii

Godson Export Commodities Limited and Others v Stanbic Bank (U) Limited (Miscellaneous Application No. 2362 of 2024)

High Court · [2025] UGCOMMC 388 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend in summary suit arising from loan facility default
Decision
Applicants granted unconditional leave to defend the underlying summary suit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court granted unconditional leave to appear and defend in a summary suit for loan recovery. The court held that where applicants raise triable issues of fact regarding whether interest was chargeable on a Uganda Shilling loan facility and whether loan facilities were properly restructured and merged, these questions require investigation at trial and constitute reasonable grounds for a bona fide defence under Order 36 of the Civil Procedure Rules.

Outcome

Applicants granted unconditional leave to defend the underlying summary suit

Facts

The 1st Applicant obtained two loan facilities from the Respondent bank: a business working capital loan of UGX 500,000,000 and a commodity finance loan of USD 600,000, with different tenures and purposes. The facility letter provided for 13.75% interest per annum on the USD loan. On 7 April 2020 and 13 January 2021, the Respondent restructured and merged the facilities into one business term loan at 13.75% interest. The 2nd, 3rd and 4th Applicants acted as guarantors. The 1st Applicant defaulted and the Respondent instituted Civil Suit No. 1236 of 2024 by summary procedure seeking USD 296,630 plus interest. The Applicants contended that interest was wrongly charged on the Uganda Shilling facility, that the restructuring was done without guarantor consent, and that they were not served with calls on guarantees. The Applicants applied for leave to appear and defend.

Issues

  1. Whether the Applicants have disclosed sufficient grounds for the relief sought?
  2. What remedies are available to the parties?

Orders

  • The Applicants are granted unconditional leave to appear and defend in Civil Suit No. 1236 of 2024.
  • The Applicants shall file a written statement of defence within 10 days from the date of this order.
  • The costs of this application shall be in the cause.

Rules and key headnotes

Civil Procedure — Summary Procedure — Leave to Defend — Test for Granting Leave
Before leave to appear and defend is granted under Order 36 of the Civil Procedure Rules, the defendant must show by affidavit that there is a bona fide triable issue of fact or law. The defendant is not bound to show a good defence on the merits but must satisfy the court that there is an issue or question in dispute which ought to be tried. The court shall not enter upon the trial of issues disclosed at this stage.
Banking & Finance — Loan Facilities — Interest Charges — Triable Issue
Where a facility letter provides for interest on a USD-denominated loan but is silent on interest for a separate Uganda Shilling loan, and the borrower contends that interest was wrongly charged on the Uganda Shilling facility, this raises a triable issue of fact requiring investigation at trial.
Banking & Finance — Loan Restructuring — Guarantor Consent — Triable Issue
Where a bank restructures and merges two distinct loan facilities into one business term loan with modified interest terms and extended tenure, and the guarantors contend that this was done without their consent and discharged them from their obligations, this raises a triable issue as to the bank's right to impose such liability and the effect on the guarantee contracts.
Civil Procedure — Summary Procedure — Grounds for Leave to Defend
Under summary procedure, a defendant is granted leave to appear and defend if able to show a good defence on the merits, or that a difficult point of law is involved, or a dispute as to the facts which ought to be tried, or a real dispute as to the amount claimed which requires taking an account to determine, or any other circumstances showing reasonable grounds of a bona fide defence.

Legislation cited (4)

Cases cited (7)

Full judgment

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

Godson Export Commodities Limited and Others v Stanbic Bank (U) Limited (Miscellaneous Application No. 2362 of 2024) [2025] UGCommC 388 (20 October 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.