Tirupati Development (U) Limited has defeated KCB in a case involving US$7,000,000 (about Shs26bn) loan.
Last year, Tirupati Development (U) Limited sued Bank of Uganda (1st defendant), KCB Bank Uganda (2nd defendant), KCB Bank Kenya ((3rd defendant) and Financial Intelligence Authority (FIA) – 4th defendant-over a number of grievances including breach of contract, negligence, money laundering, fraud and conspiracy to defraud, among others
The matter stems from July 17, 2012, when KCB Bank Uganda and KCB Bank Kenya agreed to advance to Tirupati a syndicated loan of US$ 7,000,000.
KCB Bank Uganda and KCB Bank Kenya agreed to charge Tirupati’s loan negotiation fees in the sum of 0.5% of the loan amount. This amounted to US $35,000.
Years later, Tirupati turned around and accused KCB of a number of irregularities.
In their prayer before court, Tirupati wanted declarations against KCB. These included breach of contract, fraud, conspiracy and failure to manage the Plaintiff’s accounts, among others.
The company also wanted a declaration that the Defendants failed to properly manage the risk of financial crime exposure to the Plaintiff when they wantonly occasioned the impugned transactions on the Plaintiff’s accounts and in the Plaintiff’s name.
One of Tirupati’s requests before court was that documents related to; the loan transaction and loan account origination, negotiation, approval, processing, key facts documents, management, and closure; the respondent’s policy on fraud detection, reporting, investigation, management, resolution, and closure: investment origination and management of current and loan accounts; all policies on information and computer technology, system authenticity, cyber security, and digital forensics, in hard copies and soft copies for both KCB Uganda Limited and KCB Kenya Limited; money laundering policies and suspicious transaction reports on both current and loan accounts since the Anti Money Laundering Act 2013 came into force.
KCB argued that the submission of the said documents will further compromise the Bank’s internal processes in relation to their competitors and may expose the respondent and their customers to insurmountable risk thereby causing irreparable harm to the respondents.
They argued further that disclosure of some information which may breach confidentiality agreements or privacy of persons who are not party to the dispute or exposure of privileged documents between the bank and the lawyers.
Delivering the ruling on the matter recently, Justice Musa Ssekaana, Court argued that the question of privacy is addressed in Article 12 of the Universal Declaration of Human Rights of 1948 and Article 41 of the Constitution of the Republic of Uganda.
”This application partially succeeds to the extent that the respondents should avail the applicant the following documents,” said Ssekaana in his May 5, 2023 ruling. The documents Court ordered KCB to avail Tirupati include;
(a) The loan transaction and loan account origination, negotiation, approval, processing, key facts documents, management, and closure in respect of the following accounts:
- Loan accounts No. 1059906732 with the 2nd respondent and loan account
number 215022605732 with the 1st respondent
- US dollar current account No. 22900351628 in the applicant’s name openedby the 1st respondent.
III. USD Account Number 2201449317 in the applicant’s name with the 1st
respondent
- Uganda shillings account number 2201449287 in the applicant’s name withthe 1st respondent.
“The costs shall be in the cause,” he ordered. This means that the costs of the preliminary hearing will be paid by the party that ultimately loses the case.
