The High Court’s commercial division has stayed the appointment of Mr Karamagi Kabiito, as the receiver of Threeways Shipping Group.
In his ruling on January 8, 2018, Justice David Wangutusi, the head of the Commercial Court, noted that Mr Karamagi had been rightly appointed under section 176 (2) of the Insolvency Act. He ordered company management to immediately handover the company as court hears another pending suit over the debt.
“In the instant case, since there is a pending suit concerning the debt, the applicant’s (Karamagi) job as receiver will be to serve as care-taker, keeping business running and protecting its assets while the case is playing out in court,” Justice Wangutusi said.
Justice Wangutusi also authorised Mr Karamagi to set aside transactions entered into by the company immediately before the ruling that he may deem unfair. He also noted that as receiver, Karamagi will have the final say over all operational decisions of the company.
This follows a protracted legal battle at the High Court after Threeways Shipping Service Group defaulted on a $554,169 (about Shs2b) Standard Chartered Bank loan. The bank took over the logistics company and appointed Mr Karamagi Kabiito as receiver/manager.
How it started
Trouble started after it had obtained a credit facility from the bank to expand its business between 2010 and April 2014.
According to Court documents, the company acquired loans from Standard Chartered Bank but defaulted on repayment terms which led to notices of sale of mortgaged property on July 20, 2016, and later the appointment of Mr Kabiito Karamagi, a lawyer with commercial law experience, as a receiver/manager of the company on December 2, 2016.