Kerry Howard Mwesigwa.
The Court of Appeal in Uganda has rejected Justice George Kanyeihamba’s attempt to challenge a High Court ruling on the legal and ownership status of the defunct National Bank of Commerce (NBC). The decision dealt a significant blow to Kanyeihamba and other shareholders of the Kigezi Bank of Commerce (KBC) who sought resolution over the bank’s transformation and subsequent liquidation.
In 2014, the commercial division of the High Court declared the transformation of KBC into NBC as legally valid. However, Kanyeihamba and other shareholders contested this ruling, accusing certain fellow shareholders, the Attorney General, and NBC of manipulating the company name and shareholding.
The appellants argued that the Bank of Uganda’s liquidation of NBC was unlawful, claiming that the respondents interfered with the bank’s operations, leading to its closure. They alleged that the transactions were carried out without the consent of other shareholders and amounted to fraud.
The Appellate Court upheld the constitutional powers of the Bank of Uganda to liquidate banks, citing a previous ruling in Humphrey Nzeyi v Bank of Uganda and the Attorney General. The court ruled that the measures taken by the Bank of Uganda were justified to maintain financial stability.
The doctrine of mootness played a pivotal role in the case, as the court noted that NBC had already been liquidated by the time of the ruling. Consequently, any decision in favor of the appellants would have had no practical impact as the issue was no longer relevant.
Justice Kanyeihamba’s appeal has suffered a significant setback with the Court of Appeal affirming the legality of KBC’s transformation into NBC and its subsequent liquidation by the Bank of Uganda. The court’s decision has effectively put an end to the appellants’ efforts to reclaim shares in the now-defunct NBC, rendering the appeal moot. As a result, each party will bear its own costs, as the court reversed the previous High Court ruling.
