KAMPALA, Uganda | The Court of Appeal in Kampala has ordered the sale of Emerald Hotel over Receivership—loan default secured credit, mortgage and debenture validity, appointment of receiver, management agreement, lifting corporate veil, dishonesty in borrowing, caveat registration, cause of action, sale invalid, damages reversed, bank awarded, sale supervised—no costs awarded

The appellants, Barclays Bank of Uganda Ltd., its receiver Kabiito Karamagi, and Herbert Wamala (deceased) challenged the High Court’s decision, which had awarded substantial damages to Emerald Hotel Ltd. and others, despite finding them in breach of a loan agreement.

Emerald Hotel contested the receivership, claiming irregularities and fraud, while the bank accused the borrowers of deception, including registering two companies under the same name.

The Court of Appeal upheld the validity of the loan documents, found that Emerald Hotel defaulted, lifted the corporate veil due to misrepresentation, and ruled the receivership and management agreement lawful. It set aside all damages previously awarded to Emerald Hotel and others, instead awarding UGX 4.8 billion and nominal damages of UGX 30 million to the bank, with interest. The receiver was ordered to audit and sell the hotel under court supervision within six months. Civil Appeal No. 70 of 2017 was allowed in part, while Appeal No. 72 by Shumuk was dismissed. Each party was to bear its own costs.