The High Court’s Commercial Division has upheld a Registrar’s order requiring The Emin Pasha Limited and its co-appellants to deposit USD 2,730,000—representing 30 per cent of the forced sale value of mortgaged properties—in order to halt their sale by Equity Bank Uganda.
In a ruling delivered on 9 August 2025, Justice Patricia Mutesi dismissed most of the appeal lodged by The Emin Pasha Limited, Prism Construction Company Limited, and businessman Lokule Kennedy Erustus Losuk, who sought to overturn a July 11, 2025 decision that conditioned an interim injunction against the sale on payment of the hefty deposit.
The dispute stems from loan facilities advanced by Equity Bank to the appellants, secured by prime properties in Kisugu and Nakasero. Following persistent loan repayment defaults, the bank commenced foreclosure proceedings, advertising the properties for sale to recover arrears of over USD 8.77 million and UGX 3.1 billion.
The appellants argued that the Registrar had erred in law and fact by conditioning the injunction on a deposit calculated from outdated valuation reports dated January 2020, contrary to the Mortgage Regulations which require valuations within six months of sale. They further contended that Equity Bank had failed to comply with statutory requirements, and that government commitments to settle a debt owed to Prism Construction made the deposit condition unjustified.
However, Justice Mutesi ruled that Regulation 13 of the Mortgage Regulations—requiring a 30 per cent deposit for any court order that stops or adjourns a foreclosure—applied to their application. She emphasised that the rule is triggered once foreclosure has begun, regardless of whether the application is for an interim or temporary injunction, and that courts have no discretion to issue an unconditional order halting a sale.
On the valuation dispute, the judge held that Regulation 11’s requirement for a six-month valuation applies only to actual sales, not to interim court orders. She cited earlier jurisprudence confirming that courts may use valuations from the execution of the mortgage or any subsequent valuation, and noted that older valuations often produce lower forced sale values, which can favour borrowers.
The court also rejected the appellants’ claim that no notice of default had been issued, pointing to their own pleadings acknowledging receipt of such a notice in February 2023. Allegations that the outstanding loan amount was disputed did not negate the requirement to base the deposit on the amount last demanded by the mortgagee.
While the appeal largely failed, Justice Mutesi took note of recent correspondence in which the Government of Uganda—through the Ministry of Education and Sports—reaffirmed its commitment to pay Prism Construction an outstanding sum of UGX 5.83 billion under a public works contract. Although not legally binding on the bank, the judge said these assurances could facilitate settlement of the deposit.
Consequently, the court extended the deposit deadline by 60 days, giving the appellants until 10 October 2025 to comply. Costs will be determined at the conclusion of the main suit, Civil Suit No. 0796 of 2025, in which the validity of the loan consolidation and the amounts claimed remain contested.
