KAMPALA – The High Court has on Friday, July 30 dismissed with costs, an application in which the proprietors of Simbamanyo Estates Limited had sought to halt the transfer of it’s prime properties in Kampala which was meant for Equity Bank Ltd to recover outstanding loans worth $10.8 million (about Shs40 billion).
Justice Susan Abinyo, in a ruling delivered by e-mail concluded that Simbamanyo Estates did not present to court acceptable grounds for court’s consideration to halt the orders of the Registrar Commercial Court, issued on February 17, 2021.
The judge also ordered legal costs for bank and three others — Meera Investments Ltd, Luwaluwa Investments Ltd, and the Commissioner Land Registration incurred in the appeal.
An earlier ruling by the High Court had also dismissed issues presented by the proprietors of Simbamanyo Estates, trying to save the estate that was sold to Meera Investments Ltd, through public auction.
Following the ruling, Equity Bank lawyers will now have to file a bill of costs to be approved by court.
Justice Amanyo confirmed 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.
On October 8 this last year, Simbamanyo Estates Limited filed an application seeking for express orders to stay the sale of its properties which took place on the same day.
Court records show that on the same day, the bank sold Simbamanyo building housing among others the ministry of gender on Lumumba Avenue and Afrique Suites Limited, a four-star hotel at Mutungo Hill, Nakawa Division on the same day.
The court decision followed Simbamanyo Estates Limited’s notice of withdrawing the application with no order to costs which Equity Bank lawyers of AF Mpanga conceded to the withdrawal but demanded for the legal costs incurred.
Simbamanyo Estates Limited had petitioned the court to stop the sale and takeover its properties until determination of its appeal challenging the order for payment of 30 percent of the outstanding loan.
The two properties, Simbamanyo building and Afrique Suites in Mutungo Hill were staked as collateral when Simbamanyo Estates Limited was acquiring the disputed loan.
The High Court, Commercial Division has since dismissed pleadings in which the proprietors of Simbamanyo Estates Limited had sought to stop the sale.
How it started:
The properties were guaranteed to Equity Bank Uganda as security to get the loan in November 2017.
Simbamanyo Estate Limited through their lawyers of Muwema and Advocates had sought to halt the intended sale.
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.
The 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.
But Equity Bank Limited argued that the proprietors of Simbamanyo Estates Limited defaulted on their loan obligations when they failed to pay any money as required by the contracted signed.
According to the court documents, on June 4 the bank issued a notice of default to the company demanding payment of arrears of $398,362.33.