Wakilii

Kenry Investiment Limited v Irumba (Civil Suit No. 650 of 2017)

High Court · [2021] UGCOMMC 27 · 2021 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money lent
Decision
Judgment entered for Plaintiff; Defendant ordered to pay principal sum plus accrued interest with continuing interest at 24% per annum until full payment

Observed later treatment

No later-treatment classification is recorded for this judgment.

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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 memorandum of understanding acknowledging a debt of UGX 83,000,000 is binding where the debtor subsequently made payments under it, authorised sale of land to satisfy it, and proposed further payment terms to court. The debtor cannot disregard the memorandum four years later without proving fraud or duress at the earliest opportunity. Interest of 2% per month as agreed in the memorandum will apply to defaulted instalments.

Outcome

Judgment entered for Plaintiff; Defendant ordered to pay principal sum plus accrued interest with continuing interest at 24% per annum until full payment

Facts

The Plaintiff money lending company loaned the Defendant UGX 61,000,000 in three batches. By 30 November 2013 the debt had accumulated to UGX 83,000,000. On that date the parties entered a memorandum of understanding in which the Defendant acknowledged owing UGX 83,000,000 and agreed to repay in eight instalments from December 2013 to July 2014, with unpaid instalments attracting 2% interest per month. The Defendant defaulted. After the memorandum he made several deposits totalling UGX 11,500,000. He also wrote to the Plaintiff on 4 July 2017 authorising sale of his land in Najjera to satisfy the debt, and submitted an undertaking to the Commercial Court on 28 February 2018 proposing to pay UGX 1,000,000 monthly until the debt was cleared. By the time of filing suit on 21 August 2017, interest had accrued to UGX 56,440,000. The Defendant pleaded he had fully repaid the debt and signed the memorandum on humanitarian grounds as the Plaintiff was his in-law.

Issues

  1. Whether the Defendant is indebted to the Plaintiff in the sums outstanding.
  2. What remedies are available to the Plaintiff.

Orders

  • Judgment entered in favour of the Plaintiff against the Defendant.
  • Defendant to pay UGX 127,940,000.
  • Interest on the decretal sum at 24% per annum from 21st August 2017 until payment in full.
  • Costs of the suit awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Memoranda of Understanding — Binding Effect — Evidence of Intention to be Bound
A memorandum of understanding acknowledging a debt is binding on a party who subsequently makes payments under it, authorises the creditor to sell property to satisfy the debt, and proposes payment terms to court, as these acts demonstrate an intention to be bound by the agreement.
Contract Law — Repudiation of Contract — Fraud and Duress — Timing of Challenge
A party seeking to disregard a memorandum of understanding on grounds of fraud or duress must challenge it at the earliest opportunity; raising such grounds four years after signing and after making payments under the agreement is too late.
Banking & Finance — Money Lending — Interest on Default — Contractual Interest Rate
Where parties agree in a memorandum of understanding that unpaid instalments will attract interest at a specified rate per month, that contractual interest rate applies to the defaulted amounts in accordance with the agreement.
Banking & Finance — Money Lending Transactions — Interest Rate — Commercial Court Discretion
In a money lending transaction, an interest rate of 24% per annum on the decretal sum is appropriate.

Full judgment

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

Kenry Investiment Limited v Irumba (Civil Suit No. 650 of 2017) [2021] UGCommC 27 (27 July 2021)
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.