Kampala, UGANDA – The Commercial Court in Kampala has dismissed a case in which proprietors of Simbamanyo Estates Limited had wanted to halt the auctioning of its prime properties by Equity Bank Limited over an outstanding loan of $10.8million (UGX40 billion).
In her ruling on February 17, Deputy registrar Lillian Bucyana, in the absence of the parties upon application by co-counsel for the 2nd defendant (Meera Investments limited) dismissed the case citing that; “the suit abates for failure to take out summons for directions in time.”
Meera Investments had pleaded that it had nothing to do with the Simbamanyo estates owners because it was an outsider to their business transaction with Equity bank. Meera Investments Ltd owned by businessman Sudhir Ruparelia lawfully bought Simbamanyo House, in October 2020 at a fee of UGX18.5bn, after Equity Bank put it up for sale in a bid to recover loans advanced to the owners.
Justice Christopher Madrama had earlier ruled that Simbamanyo Estates did not present to court acceptable grounds for courts consideration to deny the bank legal costs incurred.
In addition to condemning the applicant to costs, Justice Madrama ruled that stopping the sale would have infringed the Bank’s right to be heard and also inconvenienced those who prepared for the auction which was advertised on September 8 fixing the sale date.
“The application for withdrawal was not conceded to unconditionally but was on condition of payment of costs. In the circumstances therefore, the applicant (Simbamanyo Estates) application stands dismissed upon withdrawal and the only issue for consideration is whether should be payable,” Justice Madrama held.
Last year, [October 8]; Simbamanyo Estates Limited filed an application seeking for express orders to stay the sale of its properties [Simbamanyo Building on Lumumba Avenue and Afrique Suites Limited, located at Mutungu Hill, Nakawa Division] which were sold on the same day by the bank.
– Background –
Simbamanyo Building located along Lumumba Avenue in Kampala and Afrique Suites along Mutungo Hill in Nakawa Division were guaranteed Simbamanyo Estate Limited to Equity Bank Uganda as security to get a loan in November 2017.
The bank advertised the sale of the two properties by way of public auction. The advert for sale of the mortgaged properties seeks to enforce the disputed credit facility advanced on November 30 2017.
Through their lawyers; Muwema and Advocates, Simbamanyo Estate sued Equity Bank Uganda and its counterpart in Kenya challenging the legality of the outstanding loan. The case is pending hearing and determination before the Commercial Division of the High Court.
Equity Bank Limited, however argued that the proprietors of Simbamanyo Estates Limited defaulted on their loan obligations when they failed to pay any money as required by the contract signed.
According to court documents, on June 4 the bank issued a notice of default to the company demanding payment of arrears of $398,362.33.