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Inyasti Construction Limited and Another v Absa Bank Uganda Limited (Miscellaneous Application 2322 of 2025)

High Court · [2026] UGCOMMC 225 · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend arising from summary suit for recovery of debt
Decision
Matter to proceed to full trial after filing of defences and mediation

Observed later treatment

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Holding

The High Court Commercial Division granted the applicants unconditional leave to appear and defend civil suit 1120 of 2025. The court held that the parties had raised several triable issues including prematurity of the suit under the facility agreement, whether the sum claimed was liquidated and ascertainable, and the cause of action against the second applicant. The court further found that determining the summary suit would likely preempt the outcome of civil suit 0535 of 2024 pending before the Civil Division, which concerned the legality of the same guarantee encashment. The issues could not be determined summarily and required a full trial.

Outcome

Matter to proceed to full trial after filing of defences and mediation

Facts

The first applicant, Inyasti Construction Limited, obtained a multi-loan facility from the respondent bank to furnish bank guarantees required under a construction agreement with the Ministry of Water and Environment for construction of Kabuyanda Earth Dam. Among the guarantees was Advance Payment Guarantee No. 096 of 2023 worth UGX 5,017,158,210. Due to repeated failure by MOWE to pay against issued Interim Payment Certificates, the first applicant terminated the construction agreement and claimed UGX 36,139,297,482.56 from MOWE. MOWE made a demand to the respondent bank to encash the APG to the tune of UGX 4,403,722,357.63. The first applicant notified the bank that the APG should not be encashed and instituted civil suit 535 of 2024 challenging the legality and unconscionability of the encashment. Despite this, the bank encashed the APG and debited the first applicant's account, leaving a debit balance of UGX 2,979,337,173. The bank then instituted civil suit 1120 of 2025 under summary procedure against both applicants for recovery of this sum. The applicants applied for unconditional leave to appear and defend.

Issues

  1. Whether the applicants should be granted unconditional leave to appear and defend civil suit 1120 of 2025 on its merits.
  2. Whether the underlying civil suit 1120 of 2025 is premature under the terms of the facility agreement.
  3. Whether the sum claimed by the respondent is a liquidated and ascertainable sum suitable for summary procedure.
  4. Whether there is a cause of action against the second applicant as guarantor.
  5. Whether the encashment of Advance Payment Guarantee No. 096 of 2023 was unconscionable and illegal.
  6. Whether the determination of civil suit 1120 of 2025 would preempt the outcome of civil suit 0535 of 2024 pending before the Civil Division.

Orders

  • The applicants are granted unconditional leave to appear and defend civil suit 1120 of 2025.
  • The applicants shall file their written statements of defence within 14 days from the date of delivery of this ruling.
  • The civil suit shall be referred for mediation proceedings before a commercial court-annexed mediator.
  • Costs shall be in the cause.

Rules and key headnotes

Civil Procedure — Summary Suits — Order 36 — Conditions for Summary Procedure
Summary procedure under Order 36 of the Civil Procedure Rules is only resorted to in clear and straightforward cases where the demand is liquidated and there are no issues for determination by the court except for the grant of the claim.
Civil Procedure — Summary Suits — Leave to Defend — Test to be Applied
To obtain leave to defend a summary suit, the defendant must show by affidavit or otherwise 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.
Civil Procedure — Multiplicity of Proceedings — Related Suits — Risk of Conflicting Judgments
Where parties are involved in a related suit before another division of the High Court concerning the foundational issue underlying a summary suit, the court should grant leave to defend to avoid preempting the outcome of the related suit and rendering it nugatory, particularly where a finding in the related suit would directly affect the claim in the summary suit.

Legislation cited (5)

Cases cited (2)

  • Twentsche Overseas Trading Co. Ltd v Bombay Garage [1958] EA 741
  • Maluku Inter global Trade Agency Ltd v Bank of Uganda [1985] HCB 65

Full judgment

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

Inyasti Construction Limited and Another v Absa Bank Uganda Limited (Miscellaneous Application 2322 of 2025) [2026] UGCommC 225 (31 March 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.