Wakilii

Rak Ceramics Sanitary Ware Ltd and Others v Bank of Baroda (U) Ltd [2025] UGCOMMC 65

High Court · 2025 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend summary suit for recovery of debt
Decision
Judgment entered in favour of Bank of Baroda (U) Ltd on summary suit for recovery of USD 215,768.42

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Application for unconditional leave to defend summary suit dismissed. The applicants failed to disclose through affidavit or proposed written statement of defence any bonafide triable issue of law or fact. The alleged frustration by KCCA stopping building projects did not discharge the applicants from their loan obligations where no agreement conditioned repayment on third-party contracts. The applicants did not dispute loan disbursement, guarantee, or non-payment. Judgment entered for the respondent bank on the summary suit.

Outcome

Judgment entered in favour of Bank of Baroda (U) Ltd on summary suit for recovery of USD 215,768.42

Facts

The respondent bank filed a summary suit against the applicants claiming USD 215,768.41 arising from a loan/overdraft facility. The 1st applicant took out the credit facility which was guaranteed by the 2nd and 3rd applicants. Business projects at Kyambogo whose proceeds were to clear the loan were halted by KCCA, leading to a suit against KCCA. The applicants did not dispute that the loan was disbursed, guaranteed, and remained unpaid. They sought unconditional leave to defend on grounds that the loan agreement was frustrated when KCCA stopped their projects and that COVID-19 caused financial constraints.

Issues

  1. Whether the applicants should be granted unconditional leave to appear and defend Civil Suit No. 898 of 2024.
  2. Whether the applicants disclosed a bonafide triable issue of law or fact sufficient to warrant leave to defend.
  3. Whether the alleged actions of KCCA operated to frustrate the loan agreement and discharge the applicants from repayment obligations.

Orders

  • Application for unconditional leave to appear and defend dismissed with costs to the respondent.
  • Judgment entered on the summary suit as prayed in the plaint in Civil Suit No. 0898 of 2024.

Rules and key headnotes

Summary Procedure — Leave to Appear and Defend — Test for Grant
Before leave to appear and defend is granted under Order 36 of the Civil Procedure Rules, the defendant must show by affidavit or otherwise that there is a bonafide triable issue of fact or law. The defendant must satisfy the court that there is an issue or question in dispute which ought to be tried. The purpose is not to prove the defence but to ask for an opportunity to prove it through trial.
Summary Procedure — Rationale for Order 36
Order 36 of the Civil Procedure Rules was enacted to facilitate the expeditious disposal of cases involving debts and contracts of a commercial nature and to prevent defendants from presenting frivolous or vexatious defences in order to unreasonably prolong litigation. It assists courts in disposing of cases expeditiously and helps the economy by removing obstructions in financial or commercial dealings.
Frustration of Contract — Discharge from Performance
Under section 65(1) of the Contracts Act, where a contract becomes impossible to perform or is frustrated and a party cannot show that the other party assumed the risk of impossibility, the parties shall be discharged from further performance. Mere difficulty in performing obligations does not amount to frustration where the performance has not been rendered radically different or impossible.
Loan Agreements — Defence Based on Third-Party Events
Where a debtor does not dispute loan disbursement, guarantee, or non-payment, a defence based on third-party actions (such as a stoppage of building projects by a regulatory authority) will not constitute a bonafide triable defence unless the loan repayment was expressly conditioned on the third-party contract or arrangement. Actions by third parties that make performance difficult but not impossible do not discharge the debtor from loan obligations.

Legislation cited (6)

Cases cited (4)

  • Post Bank (U) Ltd v Abdul Ssozi (Supreme Court Civil Appeal No. 1 of 2015)
  • Maluku Inter Global Trade Agency v Bank of Uganda [1985] HCB 65
  • Geoffrey Gatete and Another v William Kyobe (Supreme Court Civil Appeal No. 7 of 2005)
  • Harold Wejuli and Another v Aggrey Bwire (High Court Miscellaneous Application Nos. 656 and 657 of 2019)

Full judgment

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

Rak Ceramics Sanitary Ware Ltd and Others v Bank of Baroda (U) Ltd 2025 UGCommC 65 (12 February 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.