The Commercial Division of the High Court has dismissed a suit in which Ecobank Uganda sought to recover 1.87 billion Shillings from Plan Build Technical Services and its directors, Wandera Dennis Ochwo and Jennipher Nannozi, citing the bank’s failure to provide authentic loan records to establish the alleged debt.
Ecobank filed the suit seeking to recover 1.083 billion Shillings and USD 196,490.56, equivalent to approximately 786 million Shillings, together with interest at 25 per cent per annum from 2017, general damages for breach of contract and the costs of the suit.
The bank alleged that between 2010 and 2013, it extended six loan facilities to Plan Build Technical Services, but the company and its directors, who had guaranteed the loans, failed to repay the facilities as agreed. However, Plan Build Technical Services disputed the bank’s claim, arguing that although it had borrowed 1.051 billion Shillings, it had repaid a total of 1.653 billion Shillings.
The company contended that the repayments had extinguished its loan obligations and that the bank had received an additional 602 million Shillings above the principal advanced, representing approximately 57.3 per cent of the amount borrowed. It consequently lodged a counterclaim seeking to recover the 602 million Shillings, which it considered excessive interest.
To establish the amounts borrowed and repaid, the parties agreed to appoint an auditor to reconcile the accounts, determine the interest paid, establish whether any excess payments had been made and ascertain whether either party remained indebted to the other.
However, the reconciliation exercise encountered difficulties after the auditor found discrepancies in the records supplied by the bank.
During cross-examination, the auditor reportedly told the court that the statements provided by Ecobank were Excel extracts rather than authentic, system-generated records. He also identified inconsistencies in booking dates, transaction entries and interest calculations.
The auditor further explained that the bank had been unable to provide the original system-generated loan statements required to reconcile the loan accounts with the company’s operational account statements. He said the absence of these records had undermined the reliability of the reconciliation exercise and limited the conclusions that could be drawn from the report.
In her ruling, Justice Anna Mugenyi held that the bank had not presented sufficient evidence to enable the court to establish the amounts disbursed to the company, the repayments made, the interest charged and the outstanding balance, if any.
The judge noted that Ecobank, as the institution that originated and maintained the loan accounts, was better placed to provide the relevant account statements, loan schedules and transaction histories needed to substantiate its claim.
She observed that the bank had instead presented documents containing scattered transaction narratives without corresponding figures, leaving the court unable to independently establish the amount allegedly owed. Justice Mugenyi emphasised that a bank seeking to recover a debt must provide authentic, system-generated records that enable the court to trace the loan facilities from disbursement to repayment and determine the outstanding balance.
Justice Mugenyi noted that the parties had consequently agreed that the court would not rely on the audit and reconciliation report. The judge also rejected the company’s claim that it had overpaid the bank, ruling that the authenticity of the documents presented by the defendants could not be verified.
She observed that the defendants’ records could not reliably establish that Ecobank had received excess payments, made unauthorised payments to a fictitious person or breached the banker-customer relationship. According to the judge, neither party had presented sufficiently reliable records to enable the court to reconcile the accounts and determine the actual state of the loan facilities.
While the bank’s documents failed to establish the amounts disbursed and the outstanding debt, the defendants’ documents lacked the necessary authentication to substantiate their claim of over-payment.
Justice Mugenyi further emphasised that the legal burden of proving a civil claim rest with the party bringing it and does not automatically shift to the opposing party simply because the latter has not produced evidence.
She explained that Ecobank, as the plaintiff, was required to prove, on a balance of probabilities, both the existence of the alleged debt and the amount it sought to recover. The evidential burden could shift to the defendants only after the bank had presented sufficient evidence to establish a credible case.
The judge concluded that the bank had failed to discharge this burden and dismissed its suit. She also dismissed the counterclaim by Plan Build Technical Services and its directors, having found that their evidence was equally insufficient to establish the alleged overpayment. Ecobank was ordered to bear the costs of the main suit-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
