The High Court Commercial Division has allowed Absa Bank Uganda Limited to proceed with the sale of multimillion-shilling properties belonging to Boss Beverages International Limited after dismissing a long-running loan dispute over alleged wrongful interest calculations.
In a judgment delivered through the Judiciary’s Electronic Court Case Management Information System (ECCMIS), Acting Judge Dr. Ginamia Melody Ngwatu dismissed the suit filed by Boss Beverages, ordered the company to pay costs, and authorized the bank to recover an outstanding debt of Shs710.2 million through the sale of the mortgaged property.
The court ruled that the outstanding amount will continue attracting interest at 20 percent per annum from the date the case was filed until full payment is made. “The defendant shall proceed with the sale of the mortgaged property according to the law to recover the outstanding sum of UGX 710,176,404 and interest accrued at 20% from the date of filing this suit until payment in full,” Justice Ngwatu ruled.
The properties earmarked for recovery are located on Block 232, Plots 2619 and 2406 in Banda-Kireka, which were pledged as security for loan facilities advanced to the company. The decision brings to a close an eight-year commercial dispute that began in 2018 when Boss Beverages sued Barclays Bank Uganda Limited (now Absa Bank Uganda), accusing the lender of applying unlawful interest rates and penalties.
The company argued that it had substantially repaid a Shs400 million term loan obtained in 2015 to refinance an earlier facility from DFCU Bank, and challenged the bank’s claim that the outstanding balance had risen to over Shs710 million. Boss Beverages relied on an audit report by Izimba & Co. Certified Public Accountants, which estimated the debt at about Shs288 million and questioned portions of the bank’s calculations.
However, the bank maintained that the borrower had defaulted on both a Shs400 million term loan and a separate short-term facility of up to Shs600 million, which were later consolidated at the company’s request. The bank argued that continued default led to the accumulation of contractual interest and penalties, pushing the debt to Shs710.2 million by August 2017.
The court heard testimony from company representative David Kyeera, who challenged the bank’s figures but admitted under cross-examination that he lacked formal accounting qualifications. Justice Ngwatu, however, found him competent to testify as an employee familiar with company transactions, though she noted weaknesses in his analysis, particularly his failure to account for interest and default penalties.
The court also observed that Boss Beverages failed to file written submissions despite being given timelines and provided no satisfactory explanation for the omission. Efforts by both parties to jointly appoint an independent auditor to reconcile the accounts collapsed after years of delay, with the court noting that the process had stalled since 2021.
After reviewing loan agreements, repayment records, and correspondence, the court found that Boss Beverages failed to prove that Absa Bank applied unlawful or unconscionable interest rates. The judge held that the contractual interest rates of between 19.8 percent and 23.5 percent were valid under the loan agreements and could not be interfered with in the absence of illegality.
The court consequently dismissed all claims against Absa Bank and upheld the recovery of Shs710,176,404 from the sale of the mortgaged properties.
