Barclays, Shumuk ordered to pay Shs18b to Emerald Hotel

Monday July 18 2016



Barclays Bank and Shumuk Properties have been ordered to pay more than Shs18 billion to Emerald Hotel Limited for loss of business.
Court ruled that Shumuk Properties Limited and its proprietor Mr Mukesh Shukla infringed on the rights of Emerald Hotel Limited on the land and hotel business.

Both Barclays Bank and Shumuk Properties will jointly pay the said money with Lawyer Kabiito Karamagi (receiver), Bailiff Herbert Wamala trading as Debt Masters, and Mukesh Shukla as defendants.

In addition to Shs14 million, Justice Lameck Mukasa of the Commercial Court awarded Shs6,537,503,408 as special damages suffered by Emerald Hotel for the periods from June 2008 to June 2016 and Shs68,098,994 as monthly income until the accused parties vacate the premises.

Court also ordered for the award of Shs982,725,501 to Emerald Hotel as general damages, Shs100,000,000 to Christal Way while Ms Julian Nakityo and Mr Abbey Mutebe were awarded Shs60,000,000 jointly.

“The first plaintiff is awarded interest on special damages at the bank rate of 23 per cent per annum from April 2009 till payment in full on Shs14 million and a bank rate of 23 per cent per annum from date of judgment till payment in full on Shs6,537,503,408 and Shs68,098,994,” Justice Mukasa held.


He added that the complaints are awarded interest on general damages at court rate from date of judgment till payment in full.
“Judgment is entered in favour of the plaintiffs against the defendants jointly and severally,” held Justice Mukasa in a judgment read by Justice David Wangutusi.

The judgment was against five parties including Barclays Bank Uganda Limited, Lawyer Kabiito Karamagi, Bailiff Herbert Wamala trading as Debt Masters, Shumuk Properties Limited and Mukesh Shukla.
The orders ended a 2008 case in which the bank was sued for breach of its loan contract and unlawful termination and recall of its loan to Emerald Hotel.

Through their lawyers Benson Tusasirwe and David Kaggwa, the complainants including Emerald Hotel, Christal Way, Ms Julian Nakityo and Mr Abbey Mutebe sued the accused in respect of the property located at Plot 3 Semiliki Way in Kampala over which a mortgage was created and executed to secure Shs2.7 billion.
The case resulted from a Shs3.6 billion loan advance by the bank to the hotel.

“…I find that the first defendant (Barclays Bank) and her agents did not act in good faith and did not obtain a fair market price... So there was no lawful and effectual sale of the suit property,” the judge ruled.

Court also ordered Shumuk Properties Limited to vacate Emerald Hotel premises and business immediately and handover the property and business in as-is-state as at the date of judgment.

Court further stopped Mr Karamagi from exercising the powers of receiver over the suit property, business, assets, undertakings or other interests of the complainants, Emerald Hotel Limited, Ms Juliana Nakityo and Mr Abbey Mutebe until all legal and statutory process of taking possession, appointment of receiver, foreclosure and sale are complied with.

Accused’s take
Ms Robinah Mukasa, the communications manager Barclays Bank, confirmed knowledge of the court decision, saying the bank’s legal team was studying it for the next step. “We can confirm that we are aware of the judgment but I cannot make any other comment until advised,” she said in a telephone interview. Efforts to get a comment from Shumuk were futile.