KAMPALA, Uganda The Commercial Division of the High Court has declined to stay the execution of an order to recover shs. 47 billion from Kampala International University.

Justice Steven Mubiru ruled that KIU, owned by businessman Hassan Basajjablaba, failed to prove that if it were to fit, it would be successful in an appeal lodged. Housing Finance Bank will not be able to pay back the 47 billion shillings it will have recovered.

Mubiru further ruled that the applicant has not shown that execution will affect the merits of the grounds and arguments proposed to be raised on appeal, nor has it demonstrated a reasonable basis to support the belief that there is a real prospect that it will not be possible for the Court of Appeal by its orders to restore the status quo if the applicant succeeds in its appeal.

”In granting an order of stay of execution pending an appeal, the court has to
balance the need to uphold the respondent’s right to be protected from the risk that
the appellant may not be able to satisfy the decree, with the appellant’s right to
access the courts. It is the reason that courts have been reluctant to order security
for due performance of the decree. This requirement has been interpreted as not
operating as an absolute clog on the discretion of the Court to direct the deposit of
some amount as a condition for grant of stay of execution of the decree in
appropriate cases, more particularly when such direction is coupled with the liberty
to the decree holder to withdraw a portion thereof in part satisfaction of the decree
without prejudice and subject to the result of the appeal.” Justice Mubiru ruled

During the year 2010, Kampala International University sought to borrow
a sum of US $15,000,000 from the Housing Finance Company of Kenya, to part
finance its project for the expansion of existing facilities and construct new ones,
including lecture rooms, administration blocks, hostels, dining facilities, library and
staff accommodation, complete with other contingent external work, at its
university campus in Kitengela, Kajiado County, in Kenya.

Housing Finance Company of Kenya could only raise US $10,000,000 initially but later raised an
additional US $3,700,000, which it advanced to the applicant. When the applicant
defaulted on its loan obligations, Housing Finance Company of Kenya recalled the
total outstanding loan, together with interest due, amounting to US $
11,675,782.30 as of 29th February, 2016. The applicant disputed the recall of the loan.
contending that Housing Finance Company of Kenya had defaulted on its
obligation to disburse the full amount of US $15,000,000.

A dispute having sprouted between the two parties, it was submitted to a single
arbitrator in Kenya for resolution. The applicant claimed damages for breach of
contract, while the respondent counterclaimed for the recovery of the outstanding
amount of the loan. In an award handed down on 17th September, 2019, the
Tribunal offset the claim against the counterclaim and ultimately decided in favour
of the respondent, directing the applicant was to pay the respondent a sum of US
$12,767,508.33. Interest was to accrue on the amount due at the rate of 9.5% per
annum compounded from 16th January, 2018, until payment in full. The applicant
was ordered to bear 90% of the respondent’s costs.

Dissatisfied with the outcome, the applicant filed an application for setting it aside.
In a judgment delivered by the High Court of Kenya on 16th September, 2021, the
Court dismissed the application but decided that repayment and servicing of the facility
and/or redemption of the securities was to be on the basis of the terms of the
various contracts of the loan facility(ies) and the several securities executed by the
parties, rather than within the period of 30 days that the arbitrator had directed.

Further appeals to the Court of Appeal and the Supreme Court of Kenya by the
The applicant was unsuccessful. When the respondent sought the recognition and
Enforcement of the Final Arbitral Award in Uganda: the applicant objected. In a
ruling delivered by this Court on 10th March, 2025, the applicant’s objection was
dismissed. The Final Arbitral Award was recognised, and leave was granted for its
enforcement in the same manner as a judgement, order or decree of this court

In conclusion, Justice Mubiru ruled that the applicant has failed to satisfy the majority of the essential
requirements for the grant of an order of stay of execution pending appeal.
Consequently, the application fails and it is hereby dismissed with costs to the
respondent.