Wakilii

Kizito v Bank of Uganda (MISC. CAUSE NO. 244 OF 2016)

High Court · [2017] UGHCCD 2 · 2017 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for judicial review of Bank of Uganda decision removing applicant from management position
Decision
Application for judicial review dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

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 High Court dismissed the judicial review application challenging Bank of Uganda's removal of an executive director from management of a microfinance institution. The court held that decisions of Bank of Uganda taken in exercise of statutory supervisory powers are amenable to judicial review. The application fell within the exception to statutory immunity under section 86 of the MDI Act because the pleadings imputed bad faith. However, the principles of natural justice were satisfied where the respondent relied on internal audit reports and the applicant was accorded an opportunity to respond to audit findings through the internal audit process. The respondent was not required to conduct a separate hearing before removing the applicant under its supervisory powers.

Outcome

Application for judicial review dismissed

Facts

The applicant was Executive Director of FINCA Uganda Ltd, a microfinance deposit-taking institution. During an onsite inspection in April 2016, Bank of Uganda discovered that the applicant had received preferential interest rates on fixed deposits with FINCA — 14.5% and 21.5% when the institution's approved rates were 12.5% and 16.5% respectively. Bank of Uganda's internal auditors prepared an audit report noting this anomaly and gave the applicant an opportunity to respond through internal correspondence dated 6 and 13 May 2016. The applicant provided written responses but maintained the audit report was still in draft form. On 16 August 2016, Bank of Uganda wrote to the applicant stating that his actions constituted conflict of interest and breach of trust, rendering him unsuitable under the fit and proper criteria. Bank of Uganda removed him from management and the board of directors with immediate effect pursuant to sections 22 and 24 of the MDI Act. The applicant applied for judicial review seeking to quash the decision, arguing he was not accorded a fair hearing.

Issues

  1. Whether the applicant's complaint in relation to the respondent's finding is susceptible to judicial review.
  2. Whether this application is barred by section 86 of the Micro Finance Deposit Taking Institutions Act 2003.
  3. Whether the decision of the respondent communicated by letter dated 16 August 2016 deeming the applicant as no longer satisfying the fit and proper criteria set out in the MDI Act was in breach of the principles of natural justice.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Judicial Review — Amenability — Statutory Body Exercising Supervisory Powers
Decisions of Bank of Uganda taken in exercise of statutory supervisory powers under the Micro Finance Deposit Taking Institutions Act are amenable to judicial review where the applicant alleges unfair treatment by a public body in exercise of statutory duty.
Administrative Law — Statutory Immunity — Exception for Bad Faith
An application for judicial review against Bank of Uganda falls within the exception to statutory immunity under section 86 of the MDI Act where the pleadings describe the respondent's actions as high-handed, unlawful, manifestly unjust and indefensible, even if the words 'bad faith' are not expressly used, as these words import the notion of bad faith.
Administrative Law — Natural Justice — Form of Hearing
The principles of natural justice do not require an oral hearing in all cases. It may suffice to give an opportunity to make representations in writing, provided the demands of fairness are met.
Banking & Finance — Regulatory Supervision — Fit and Proper Criteria
Bank of Uganda may remove a person from management of a microfinance institution under its supervisory powers where audit reports disclose conduct that in the Central Bank's opinion is fraudulent, prejudicial or otherwise improper. The Central Bank is not duty bound to wait for a final audit report provided it is satisfied there is a prima facie case of impropriety.
Administrative Law — Natural Justice — Procedural Fairness Through Agents
Where Bank of Uganda exercises supervisory powers through internal auditors appointed with its approval, the principles of natural justice are satisfied if the internal auditors give the affected person an opportunity to explain anomalies discovered during the audit.
Banking & Finance — Regulatory Powers — Scope of Removal Powers
Section 58 of the MDI Act authorizes Bank of Uganda to remove a person from management but does not authorize a declaration that the person is unfit. Such a declaration can substantially constrain the person from securing employment in future and may attract a remedy in defamation.

Legislation cited (17)

  • Micro Finance Deposit Taking Institutions Act 2003 s.7
  • Micro Finance Deposit Taking Institutions Act 2003 s.22
  • Micro Finance Deposit Taking Institutions Act 2003 s.23
  • Micro Finance Deposit Taking Institutions Act 2003 s.24
  • Micro Finance Deposit Taking Institutions Act 2003 s.55
  • Micro Finance Deposit Taking Institutions Act 2003 s.56
  • Micro Finance Deposit Taking Institutions Act 2003 s.58
  • Micro Finance Deposit Taking Institutions Act 2003 s.86
  • Micro Finance Deposit Taking Institutions Act 2003 Second Schedule para.2(b)
  • Micro Finance Deposit Taking Institutions Act 2003 Second Schedule para.2(c)
  • Micro Finance Deposit Taking Institutions Act 2003 Second Schedule para.2(d)
  • Judicature Act s.36
  • Judicature Act s.37
  • Judicature Act s.38
  • Constitution of Uganda art.40
  • Constitution of Uganda art.42
  • Constitution of Uganda art.44(c)

Cases cited (4)

  • Hypolito de Souza v Chairman and Members of Tanga Town Council [1961] 1 EA 377
  • Chief Constable of North Wales Police v Evans [1983] 3 All ER 143
  • Bank of Uganda v COWE (Civil Appeal No. 35 of 2007)
  • Wiseman v Borneman [1969] All ER 275

Full judgment

↓ Download PDF

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

Kizito v Bank of Uganda (MISC. CAUSE NO. 244 OF 2016) [2017] UGHCCD 2 (13 January 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.