Humphrey Nzeyi v Bank of Uganda and Attorney General (Constitutional Appeal No. 01 of 2021) [2025] UGSC 20 (14 May 2025)

THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CORAM: Tibatemwa-Ekirikubinza; Tuhaise; Chibita; Musoke; Madrama; Bamugemereire; Mugenyi, IISC) CONSTITUTIONAL APPEAL NO. 01 OF 2021. HUMPHREY NZEYI .APPELLANT VERSUS 1. BANKOFUGANDA 2. ATTORNEY GENERAL RESPONDENTS (Appeal from the decision of the Constitutional Court in Constitutional Petition No. 44 of 2012 before Kakuru, Kiryabuire, Cheborion, Muhanguzi and Musota, llA/ltCC, deliaered on the 4ttt Noztentber 2020) |udgment of Perry Night Tuhaise, ]SC This is an appeal from the dismissal, by a majority decision of 4 to 1 (Kakuru (RIP) JA/JCC dissenting), of the Appellant's petition by the Constitutional Court. In his petifion to the Constitutional Court, the petitioner, who is the Appellant in this appeal, had challenged the constitutionality of select sections of the Financial Institutions Act (FIA). He had also challenged the conduct/acts/omissions of Bank of Uganda when taking over, liquidating, winding up, and selling of the National Bank of Commerce (NBC) to Crane Bank Uganda Ltd, which he alleged to be unfair, irrational, and arbitrary; that it amounted to, among other injustices, a denial to NBC of the non-derogable right to a fair hearing, and an illegal compulsory deprivation of the petitioner's 1 q property in NBC; and that it contravened various provisions of the Constitution of Uganda, including the fundamental right to a fair hearing and the right to property. Background The National Bank of Commerce Limited (NBC) was a deposit taking financial institution. It held a banking license issued by Bank of Uganda (BOU), the 1* Respondent in this appeal, pursuant to the Financial Institutions Act, 2004 (FIA). The Appellant was one of the shareholders and directors of the NBC. On 27ft September 2012, BOU wrote to the NBC, communicating the takeover of the management of the NBC. On that day, the NBC was put under management and eventual liquidation and sale by the 1* Respondent. A public notice was issued by the l.tRespondent winding up the affairs of the NBC and informing the public that a purchase and assumption agreement had been concluded with M/S Crane Bank Ltd which took over all deposits and assets of NBC effective 1't October 2012. 2 The Appellant, being a shareholder and director of the NBC, was aggrieved by the manner in which the BOU took over management, liquidation, winding up and sale of the NBC. He filed Constitutional Petition No. 44 of 2012 against BOU and the Abtorney General, where he sought to have various provisions of the FIA declared unconstitutional. He contended that the 1't ResPondent was able to take over and sell the NBC because of several provisions of the FIA, 2004. He also contended that the NBC had suffered and was likely to suffer the infringement of fundamental rights, because the acts of the 1't Respondent, and some of the provisions of the FIA 2004, are inconsistent with the provisions of the Constitution of the Republic of Uganda 1995. On 4d' November 2020, by a majority decision of 4 to7, the Constitutional Court dismissed the petition with no order as to costs. The Appellant, being dissatisfied with the decision of the Constitutional Court, filed this appeal based on 9 grounds of appeal, that:- 1. The Learned |ustices of the Constitutional Court erred in law and fact when they held that Part 9 of the Financial Institutions Act (2004) affords a distressed Financial Institution a right to be heard. 2. The Learned ]ustices of the Constitutional Court erred in law and fact when they held that National Bank of Commerce was given an opportunity to be heard in respect to all issues which culminated into its closure on the 27h September 2012. 3. The Learned ]ustices of the Constitutional Court erred in law and fact when they disregarded and or failed to interpret the impugned provisions of the Financial Institutions Act to wit Sections 28 (5),57,77, 100 and 100 (sic). 4. The Learned |ustices of the Constitutional Court erred in law and fact when they held that Section 17 of the Financial Institutions Act (2004) that permits Bank of Uganda to summarily revoke a licence of a Financial Instifution was not inconsistent with and in contravention of Articles 2,26,28,40, 40(3) and tt4(c) of the Constitution. 5. The Learned )ustices of the Constitutional Court erred in law when they held that Section 101 of the Financial Institutions Act (2004) does not oust the jurisdiction of the court when it refuses the entertainment of any application for stay of proceedings in relation to liquidation or winding up of a financial institution. 3 6. The Learned |ustices of the Constitutional Court erred in law and fact when they held that the act, manner and conduct of the 1* Respondent in cancelling the banking license of the National Bank of Commerce, taking over its management, appointing a liquidator, negotiating its sale to Crane Bank Ltd a competitor in business all in one day 27th September 2072 was not inconsistent with or in contravention of Articles 2,28,26,27, 40(2),42,44 and,162 of the Constitution. 7. The Learned ]ustices of the Constitutional Court erred in law and fact when they acknowledged but failed to declare the petitioner's constitutional rights to privacy which were violated pursuant to the impugned sale of National Bank of Commerce. 8. The Learned |ustices of the Constitutional Court erred in law and fact when they failed to generally evaluate the evidence adduced in the petition as a whole thereby arriving at a wrong conclusion. 9. The Learned ]ustices of the Constitutional Court erred in law and fact when they held that the matter of National Bank of Commerce had been resolved a long time ago and, ipso facto, the Petitioner was not entitled. The Appellant prayed for orders that:- 0 ii) The appeal be allowed. The judgment, declarations and orders of the Constitutional Court be set aside. That costs of this appeal and those of the Constitutional Court be granted to the Appellant. iii) 4 Representation At the hearing of this appeal, the Appellant was represented by Mr. John Mary Mugisha, Senior Counsel, assisted by Mr. Raymond Mugisha, appearing jointly with Mr. Andrew Oluka and Mr. Moses Muziki. Mr. Ernest Sembatya Kagwa represented the 1't Respondent. Mr. Geoffrey Madette, Senior State Attorney, and Mr. Arnold Kyeyune, State Attorney, appeared for the 2nd Respondent. Preamble The Appellant filed this appeal in February 2027. The FIA 2004 was the applicable law then. The laws of Uganda were revised n 2023. Under the revised version of the laws of Uganda, the Financial Institutions Act Cap 57 became effective on 1't July 2024. In this judgment, I will, where necessary, indicate those sections which have changed as a result of the revision, for ease of reference and to avoid misapplication of the law. ]urisdiction of Court The jurisdiction of this Court regarding appeals originating from the Constitutional Court is provided for under Article 132(3) oI the Constitution of the Republic of Uganda, and Rule 2 (3) of the Judicafure (Supreme Court Rules) Directions SI 13 - 11 (referred to as "the Rules of this Court" or "Supreme Court Rules" in this judgment). Rule 30 of the Rules of this Court empowers this Court to reappraise evidence when resolving an appeal against the decision of the Constitutional Court. Rule 30 (2) specifically states:- "When an appeal emanates from a decision of the constitutional court- 5 (a) in tfu case of nn appeal on a pefition to the constitutional court, the court may appraise the ettidence and decide matters of fact, or lmtt, or mixed lau and fact, and may in its discrefion tal<r additional eoidence; and (b) in the case of an aweal on a reference to the constitutional court, the court may decifu the question of lau or mixed latLt and fact submitted in the reference." Submissions of Counsel On Grounds 1 & 2, learned Counsel for the Appellant submitted that, pursuant to Articles 28 (1) and (3)(c) C (g) of the Constitution, a person is entitled to a fair hearing, and such person should be accorded adequate time and facilities for the preparation of his or her defence; is presumed innocent until proved guilty; is to appear before an independent and impartial tribunal; that such right is non-derogable and entrenched in the Constitution; and that this was emphasized in the case of Bakaluba Peter Mukasa Vs Nambooze Betty Bakireke, Election Petition Appeal No.4 of 2009 (udgment of Katureebe JSC). Leamed Counsel also submitted for the Appellant that, whereas section 128 of the FIA required BOU to give the National Bank of Commerce (NBC) not less than 3 days' notice to show cause why civil penalties should not be imposed before imposing the penalties, the Constitutional Court still dismissed the petition despite finding at page 26 paragraph 3 of the lead Judgment that there was no evidence that a penalty notice of less than 3 days was ever imposed on NBC. Learned Counsel further submitted that, much as the Constitutional Court considered sections 17 and "l0l of the FIA, the Appellant still maintains that the 6 Constitutional Court's decision, which was to the effect that the said provisions were constitutional, did not meet the standard of constitutional interpretation. Counsel referred this Court to page 22 of the lead Judgment, where the Constitutional Court stated that BOU has powers to give a chance to a distressed Bank to make good their violations of the FIA. He contended that, in this case, there was evidence that several meetings were held between NBC and the BOU to resolve NBC's capital inadequacy issues, on which basis, the Constitutional Court found that section 17 of the FIA which grants BOU power to immediately revoke a banking license was constitutional since NBC was given a chance to ameliorate its alleged breaches under section 82 of the FIA. Counsel argued, however, that section 82 does not subordinate the process of revoking a banking license under section 17 to the corrective actions given under that section; and that, in addition, section 82 provides for the invocation of corrective action by BOU, but does not provide for the hearing of the affected Bank. Learned Counsel relied on the case of |ohn Ken Lukyamuzi Vs Attorney General & Another, Constitutional Appeal No.2 of 2007, where the question for determination was whether the Inspector General of Govemment (IGG) was the appropriate tribunal to pass penalties under the Leadership Code Act where the same IGG is the enforcing Agency. Counsel submitted that, in reference to the penalties, Tumwesigye JSC (as he then was) held that; "ln my oietLt, such penalties should be imposed by a Court of lau or a tribunal established by latu zohich obserues due process." Learned Counsel submitted that it is clear that, just like the IGG was given draconian powers under the Leadership Code to investigate, prosecute and 7 adjudicate alleged breaches by leaders in public office, the BOU was given similar draconian powers under the FIA to investigate, prosecute and adjudicate alleged breaches by banks; and that, exercise of such powers was declared to be unconstitutional in the cited ]ohn Ken Lukyamuzi case. Counsel concluded that there is no reason why any court charged with the responsibility of iaterpreting the Constitution would not find the impugned draconian powers of BOU under the FIA to be unconstitutional. In reply, learned Counsel for the 1't Respondent denied that the leamed Justices of the Constitutional Court were wrong, whether in law or fact, in holding that Part of 9 of the FIA affords a distressed financial institution the right to be heard, and also for holding that the NBC was given an opportunity to be heard. Leamed Counsel for the 1"t Respondent contended that the constitutionality of the FIA ought to be considered in the context of the nature of the fluidity of banking business and the reality of the fact that time is of the essence. Counsel submitted that Part 9 of the FIA provides for "corrective actions"; that section 82 (1), which falls under Part 9, is instructive on whether "the right to be heard" is embedded in that part. He argued that section 82 (1) would come into play only in two (2) instances, that is, (i), when a financial institution refuses to submit to inspection, or (ii), provides false information. He also submitted that, section 82 (2) of the FIA, on the other hand, sets out ten non- exhaustive sanctions or prohibitions that may be imposed on a financial institution which fails, refuses or neglects to comply with an order issued pursuant to section 82 (1). 8 Counsel also contended that all the interventions imbedded in Part 9 of the FIA, by their very nature, entail interactions of the 1't Respondent as regulator with a financial institution; that in the said interactions, the financial institution would be notified of whether it refused to submit to inspectiory or having submitted to inspection, it provided false information; that the financial institution would be at liberty to respond by either taking remedial actions, complying with the directions or agreeing to execute an agreement with the regulators, whichever would be applicable in the circumstances; and that a financial institution may also opt not to engage in any of the foregoing measures. Counsel maintained that, in relation to the NBC, the 1't Respondent had extended extensive interactions with NBC the details of which are on record; that NBC was at all times duly notified by the 1* Respondent of areas which required to be addressed and was given an opportunity to remedy them. He accordingly submitted that, it therefore cannot be said that in the said interactions between the 1't Respondent as regulator and a financial institution, the financial institution would not be afforded an opportunity to be heard, or that Part 9 of the FIA does not afford a distressed financial institution a right to be heard. Regarding the Appellant's counsel's reliance on the case of fohn Ken Lukyamuzi V AG & Another (supra), learned Counsel for the 1"t Respondent submitted that the cited |ohn Ken Lukyamuzi case is wholly inapplicable to the instant case as the mischief for which the Leadership Code Act was enacted to cure/address is totally different from that of the FIA. 9 Learned Counsel for the 2"d Respondent, also in reply to the Appellant's submissions, referred this Court to pages 290 to 292 of the record of appeal, and submitted that the lower court was alive to its duty. He contended that the decision of the Constifutional Court was reasonable and was rationally supported by the evidence on record. According to Counsel, the Constitutional Court addressed its mind to the right to a fair hearing enshrined in Article 28 of the Constitution, and considered the cases of Rev. Bakaluba Peter Mukasa Vs Befty Nambooze (supra), and Mpunga and Sons Transporters Ltd Vs Attorney General and Kambe Coffee Factory (Coach) Ltd, Supreme Court Civil Appeal No.77 ot200'L where this Courtconsidered the meaning of Article 28 of the Constitution of Uganda 1995. Leamed Counsel for the 2nd Respondent also referred this Court to page 304 of the record of appeal and contended that the Constitutional Court comprehensively evaluated the evidence and the submissions of the parties, and that it reached a proper conclusion that there are provisions in Part 9 of the FIA where the law gives a chance to the distressed bank/financial institution to make good their violation of the FIA. Counsel submitted for the 2"d Respondent that the Constitutional Court went further and cited examples of the general parameters set out in the FIA for an intervention by the BOU in banks/financial institutions; that section 82 of the FIA was highlighted and reproduced at pages 305 to 307 of the record of appeal to exemplify that the intervention policy is not arbitrary and f or automatic in application, as policy affords the distressed entity an opportunity to provide a recovery plan where the Central Bank (BOU) has reason to believe or finds that the affairs of the financial institution are conducted in a manner detrimental to 10 the interests of the depositors, the financial institution or in contravention of the Act or any other written law. Learned Counsel for the 2nd Respondent referred to the Constifutional Court's observation of the 1't Respondent's Counsel's submissions that NBC and BOU were in discussions over the problem for a period of about three years (2009 - 2012) before the NBC was closed. He also referred this Court to page 319 of the record of appeal, where the Constitutional Court underscored that the regulation of financial institutions prioritizes the public interest and requires quick and decisive action on any bank which may be deemed to be acting in contravention of the goveming law. On Ground 3, leamed Counsel for the Appellant submitted that the Constitutional Court unanimously found that all the impugned provisions of the Financial Institutions Act (FIA) cited were constitutional; that, however, in dealing with the issue at pages 22 - 27 of the lead Judgmen! the Constitutional Court only canvassed the constitutionality of sections 17 and 101 of the FIA. He submitted that the leamed Justices of the Constitutional Court did not make any finding on sections 28 (5),77,88 (1), 89 (1),89 (3) and 102 of the FIA. Counsel went at great length and set out the powers the said provisions accorded to BOU, for emphasis and clarity. Counsel submitted for the Appellant that all the foregoing provisions of the FIA are unconstitutional; that their enforcement is blunt since it is not conditioned upon the granting of a hearing to the affected bank (NBC) before sanctions are meted out; and that this offends all known principles of natural justice. He contended that in the instant case, there was a total failure of justice when the 11 Constitutional Court failed to exercise its mandate to interpret the impugned provisions of the FIA under Article 137 of the Constitution. In reply, learned Counsel for the 1't Respondent submitted that the Constitutional Court's jurisdiction is limited to interpreting provisions of the Constitution and the constitutionality of laws or actions. He cited the case of Ismail Serugo V Kampala City Council & Attorney General, Supreme Court Constitutional Appeal No. 2 of 1998 to support his submissions on this point. Counsel submitted for the 1't Respondent that Ground 3 of the appeal criticizes the Consfitutional Court for not interpreting sections 28 (5), 57 ,77 ,100 and 101 of the FIA but does no! whether directly or remotely, criticize the Constitutional Court for not pronouncing itself on the constitutionality of the said provisions. He argued that, in any event, it is not true as alleged, or at all, that the Constitutional Court disregarded andf or failed to interpret the said sections of the FIA. Counsel submitted that the Constitutional Court pronounced itself on the said sections, unequivocally holding that they do not violate any provisions of the Constitution. It was Counsel's contention that sections 28 (5),57,77,88,89,99,100 and 101 of the FIA are ordinary incidents of the regulatory regime of banks as deposit taking financial institutions for the protection of the interests of the depositors who hold rp to 92% of the risk weighted assets of a financial institution, shareholders holding only a minimum of 8% of the risk weighted assets of a financial institution. According to Counsel, the said sections are not inconsistent with any of the provisions of Chapter Four of the Constitution dealing with Fundamental Rights and Freedoms. In specific regard to the non- t2 Learned Counsel for the 1.t Respondent also submitted that declaring the said provisions of the FIA unconstitutional would effectively be removing the existing safeguards on depositors' money and the potential resultant adverse effect on the economy. He concluded that the crux of the Appellant's petition was the allegation of NBC not being afforded the right to be heard, and the express determination on the constitutionality of sections 28 (5), 57, 77, 88, 89, 99, 1,00 and 101 of the FIA would only follow upon a finding by the Constitutional Court that NBC had not been afforded the right to be heard. Leamed Counsel for the 2nd Respondent, also in reply to the Appellant's submissions on Ground 3, referred this Court to page 320 of the record of appeal where the decision of the said Court was made. He accordingly submitted that regarding the alleged failure to interpret the impugned provisions, the leamed Justices of the Constitutional Court had occasion to, and did consider the provisions of the FIA 2004; and that they did not err in law and fact because they did not disregard or fail to interpret the impugned provisions of the FIA as alleged by the Appellant. On Grounds 4 &. 6, learned Counsel for the Appellant faulted the Constitutional Court for failing to follow the long-established principle of 13 derogable right to a fair hearing enshrined in Article 28 of the Constitution, Counsel submitted that NBC was notified in writing by the 1* Respondent of all the alleged infringement by it of the FIA, and of all its actions said to be detrimental to the interests of depositors; and, further, that none of the actions of the 1"t Respondent in relation to the closure, winding up and liquidation of NBC contravened any of the said provisions. //purpose and effect" in determining the constitutionality of section 17 of the FIA. He relied on the case of Zachary Olum & Anor Vs Attorney General, Constitutional Petition No. 6 of 1999 where G. M Okello JA (as he then was) held that- "ln deternining the constitutionality of n section of a statute or Act of Parliament, Court has to considtr the purpose and effect of the impugned statute or section thereof. lf its purpose does not infrrnge a right guaranteed by the Constitution, the Court hns to go further and examine the effect of its implemtntation. lf either its purpose or the effect of its implementation inftinges a right guaranteedby the Constitution, the impugned statute or section thereof shall be rleclared unconstitutional." Counsel submitted for the Appellant that the purpose of section 17 of the FIA which allows BOU to invoke drastic and summary sanctions against banks, like revoking their license, taking over, closing them, winding up, liquidating and selling their assets simultaneously without affording the victims a right to a fair hearing is unconstitutional. He also submitted that the effects of applying section 17 to NBC were not considered by the Court at all; that whereas the NBC was summarily closed under section 17 on grounds, inter alia, that it was significantly undercapitalized, the effect of applying this provision occasioned a travesty of justice which was not interrogated by the Court. Counsel further submitted that the invoking of section 17 was not conditioned upon a hearing of the NBC, that evidence to show that the alleged under capitalization of NBC which was only Uganda Shillings 790 million was ignored both by BOU which was the investigator, prosecutor and adjudicator, and the Constitutional Court which failed in its duty to deliver justice. 74 Learned Counsel for the 1't Respondent on the other hand, submitted that a banking license cannot be revoked summarily, and that NBC's banking license was not revoked summarily. He also submitted that the leamed Justices of the Constitutional Court did not err when they held that section 17 of the FIA is not inconsistent with or in contravention of Articles 2,24,28,40,40 (3) and rM (c) of the Constitution. Counsel contended that the revocation of a banking license comes on the back of detailed corrective measures, all set out in the FIA, which measures in the case of NBC were all complied with as submitted in Grounds "l and 2 of the appeal. According to Counsel, it cannot therefore be said that the revocation of its license was done summarily. On Ground 6, leamed Counsel for the 1"'t Respondent, submitted that the overriding principle in the regulation of financial institutions is the protection of depositors' funds. He argued that the Appellant's dissatisfaction with a regulator's conduct in the exercise of its regulatory function cannot, of itself, be a basis for challenging the constitutionality of the provisions pursuant to which the regulator acted. He contended that it could be a basis for a civil suit grounded in tort or breach of duty, or a basis for an application for Judicial Review, but certainly not a Constitutional petition. Counsel referred this Court to the background of the constitutional case, that NBC at various times commencing 2009 up till 2012 had high level engagements with the 1't Respondent as regulator; that in all the said engagements NBC was given an opportunity to remedy various operational and legal infractions, but that, in spite of attempts having been made to do so by NBC, other infractions emerged, as well as shareholders' disputes which were subjects of litigation. Counsel maintained that such developments had an 15 impact on the NBC's liquidity, management, and its continued operation put depositors' funds at risk. He argued that the conduct of the 1't Respondent in the circumstances of NBC were fundamentally for the protection of depositors, funds and accordingly cannot be said to having been inconsistent with the Constitution. Learned Counsel for the 2nd Respondent, on Ground 4, also submitted in reply that the learned Justices of the Constitutional Court were alive to the contexfual approach to constitutional interpretation at page 222 of the record of appeal where they relied on the Canadian authority of R v. wholesale Travel Group Inc. [1991] 3 s.c.R 154, where it was held that: "... the Charter (Constitution) is to be interpreted in liSht of the context in zohich the claim arises. Context is releannt both zoith respect to the delineation of the meaning antl scope of Chnrter rights, as toell as to the determination of the balance to be struck betueen indiaidual rights and interests of society." Counsel submitted that the Constitutional Court further noted at line 13 atpage322 of the record of appeal that the principles and policies underlying a particular legislation are relevant in determining whether any legislation infringes on the provisions of the constitution, and it cited the authority of The Minister of Employment and Immigration u. loseph (Guiseppe) Chiarelli [1992] 1 R.C.S. 711 (Supreme Court of Canaila). Leamed Counsel for the 2nd Respondent accordingly contended that the Constitutional Court analyzed the FIA and properly found that the provisions of section 17 of the FIA 2004 were put in place in the public interest of ensuring the stability of financial institutions through effective prudential regulation and they do not violate any provisions of the 1995 Constitution. 16 17 on Ground 6, learned Counsel for the 2nd Respondent submitted that the ground of appeal is argumentative and it clearly offends the provisions of Rule 82 (1) of the Rules of this Court. That notwithstanding, however, he submitted that, regarding the manner and conduct of the 1.t Respondent in cancelling the Appellant's banking license, the Constitutional Court took into consideration the unique nature of financial institutions and the potential moral hazard they can generate when they face failure. He submitted that the obligations for ensuring fair treatment of financial institutions by the Bou as the regulator must be construed, taking into account the fluid nature of the banking business and the fact that time is of the essence. He referred to the Constitutionai Courf s observation in their judgment, that even just one day can be long enough to bring down a whole commercial bank and rattle the country,s economy. on Ground 5, learned Counsel for the Appellant faulted the learned Justices of the Constitutional Court who, in the majority lead judgment justified the existence of section 101 of the FIA, found that the section only limits the remedy that a party may have, and that such limitation is not unusual during insolvency. Counsel submitted for the Appellant that he read the Insolvency Act 2011, and found that it has no provision that completely bars a party aggrieved by the liquidation of a company from accessing the courts for assistance. He stated that one example of a restrictive provision in the Insolvency Act is section 97 which provides that legal proceedings shall not be commenced or continued against the company after commencement of the liquidation. He argued that this is because the liquidator takes over all the property and powers of the company including power to take over all legal proceedings; that, however, the same Insolvency Act gives a party aggrieved by the activities of the liquidator the right to access the courts and enforce the liquidator's duties or remove him or her under section 118 of the same Act. According to Counsel, the Insolvency Act is not in the same league with the FIA which has sections that oust the jurisdiction of the courts. He maintained that it was therefore inappropriate for the Constifutional Court to make a cross reference to the Insolvency Act in the manner it did. Leamed Counsel for the Appellant aiso submitted that, even if it were to be said, for arguments sake, that section 101 merely limited the court's power to entertain disputes, the law views any limitation of the High Court's unlimited original jurisdiction granted under Article 139 (1) of the Constitution, to be unconstitutional. He cited the case of commissioner General Uganda Revenue Authority Vs Meera Investments Ltd Supreme Court Civil Appeal No. 22/2007, where this Court found that section 1a (1) of the Tax Appeals Tribunal Act conflicted with Article 139 (l) oI the Constiturion as it illegally ousted the power of the court to hear reviews of taxation decisions. Counsel concluded that the Constitutional Court erred in law to find that the impugrred provision of section 101 was not unconstitutional. He contended that the said courfls error has occasioned a transgression of the NBC's constifutional rights which must be redeemed by this Court. The 1.t Respondent's Counsel, in reply, referred this Court to Halsbury,s Laws of England FourttU Edition Volume 10, paragraph 720 at pages 322 and submitted that ouster of court's jurisdiction effectively means that a court is prohibited from entertaining a dispute of a particular nature, reserving such 18 jurisdiction for another tribunal. He submitted that a financial institution in relation to which the 1't Respondent as regulator has commenced liquidation process is at liberty to bring an action challenging the legality of either the regulator's actions or the process, and a court is not prohibited from determining such dispute and issuing appropriate remedies. According to Counsel, it is without doubt that the liquidation of a financial institution is in-formed by its prolonged extreme state of distress, and upon failure of its directors and management to remedy such distress. Counsel submitted, in addition, that an order of stay is issued by a court as an interim or interlocutory remedy and not a final remed y; that, accordingly, properly interpreted, section 101 does not oust the jurisdiction of the Court, but rather expressly bars the issuance of an order of stay of proceedings upon the commencement of the liquidation of a financial institution. Counsel further submitted that, it is trite that a stay of proceedings order effectively maintains the status quo. He argued that, in case of a financial instifution whose liquidation has been commenced on account of its state of extreme distress leading to the revocation of its license, the issuance of an order of stay of proceedings would not restore its banking license; that, consequently, the depositors' funds would be left to an unlicensed entity and this would effectively make a dire situation even worse, and depositors would be exposed to the risk of losing their deposits. He maintained that it is fundamentally for the protection of depositors' funds in such circumstances of extreme distress that section 101 of the FIA was enacted. 19 Counsel for the 2"d Respondent, also in reply to the Appellant's submissions on Ground 6, submitted that the Constitutional Court's analysis of section 101 of the FIA was sound when it rationally found at page 30g of the record of appeal (page 36 of the lead judgment) that section 101 which provides that no stay shall be granted during the winding up or liquidation of a financial institution does not amount to an ouster of the jurisdiction of the court. He contended that, according to the learned majority Justices of the Constitutional Court, the section orrly limits the remedy that a party may have and such limitation is not unusual during insolvency. He maintained that, in that respecf the constitutional Court did not err as alleged by the Appellant, when it made that finding. on Ground 7, learned Counsel for the Appellant submittecl that the leamed Justices of the Constitutional Court erred in law and fact when they acknowledged, but failed to declare the petitioner's constitutional rights to privacy which were violated pursuant to the impugned sale of the NBC. Counsel submitted that the lead judgment did not make any attempt to interrogate the constitutionality of the conduct of the Bou in divulging confidential information of NBC to Crane Bank before, and at the time of closing the impugned Purchase and Assumption Agreement. Counsel submitted that the unlawful disclosures made by the BoU were occasioned by the conclusion of the Purchase and Assumption Agreement by which the BoU sold the assets of NBC to Crane Bank. Counsel argued that Crane Bank would not have been in a position to enter into the transaction without acquiring confidential information about the NBC from the BoU. According to Counsel, this contravened section a0 (3) of the Bank of Uganda 20 Act. Counsel, in addition, submitted tha! whereas the violation of section 40 (3) can be a basis for a civil action for public misfeasance and damages in a trial court or High Court, it does not take away the fact that such a violation can also be cited for infringement of the constitutional right to privacy which is guaranteed under Article 27 of t}re Constitution. Counsel also submitted that, Bou's violations of NBC's confidentiality rights lead to automatic violation of its constitutional obligation to conform to the Constitution in the performance of its duties under Article 162 of the Constitution. He relied on the case of Tournier vs National provisional & union Bank of England 1792417 Kv 461 on confidentiality obligations under the UK Banking law, which corresponds with the banking law of Uganda, where the court found that disclosure of a customer's confidential information by a bank can only be made if; it is made under compulsion of law, there is a duty to the public to disclose, the interests of the Bank require disclosure, and the disclosure is made by the express or implied consent of the customer. The 1't Respondenfs Counsel did not agree with the Appellant's submission that the Appellan(s right to privacy was violated, or that the learned Justices of the constitutional Court erred in holding that the Appellant's rights to privacy were violated. He relied on the case of Center for Domestic violence Prevention & 8 others vs AG, Constitutional petition No. 13 of 2014, where the Constitutional Court held that:- "The ights guaranteed under Arficles 23 (1),26 and 27 ofthe Constitution are not absolute. They cnn be limited in the interest of the pubtic ns prooided by Article 45 of the Constitution. The ights and freedoms under the constitution must not prejudice the fundamental rights and freedoms of others or the public 27 interest. Whatetter limitation is imposed it should not exceed rulmt is ncceptable and demonstrably justifnble in a ftee nnd demountic sociefy." Counsel submitted that, upon an entity being granted a banking license, it becomes subject to the regulatory framework, that is, the FIA and the supervisory ambit of the 1st Respondent as regulator. He accordingly argued that, to the extent that NBC was a licensed and regulated financial institution, its right to privacy was not absolute. Counsel contended that the protection of the rights and interests of the public exceed the privacy of NBC, and that it was within that context that the 1.t Respondent, a public body, carrying out prudential regulations, scrutinized the affairs of the NBC, and, upon the 1't Respondent making a finding that it was in dire straits, in the public interest, its banking license was revoked as its continuation to function as a financial institution was detrimental to depositors as well as the economy of Uganda. Learned Counsel for the 2nd Respondent, also in reply to the Appellant,s submissions on Ground 7, submitted that the majority Justices did not err as alleged by the Appellan! as they found after examining the evidence on record that there was no question of infringement of Article 27 of *te Constitution by the 1't Respondent. He maintained that the learned majority Justices of the Constitutional Court at page 326 lines 23 to 26 of the record of appeal considered the arguments by the Petitioner and Respondents on the question of infringement of Article 27 on the right to privacy as alleged by the petitioner, and properly found that there was no question of infringement of Article 27 22 because BOU, being a public body carrying out prudential regulation, had the right to secure NBC's affairs however private. Counsel for the 2nd Respondent referred this Court to page z1z lines 18 to 23 of the record of appeal and submitted that the leamed Justices of the Constitutional Court further found and held that the onus to prove that the manner in which the act of removing management and winding up the NBC were done could have been unconstitutional, as alleged by the petitioner, lay with the petitioner, and that he had not been able to prove so. On Grounds 8 and 9, leamed Counsel for the Appellant submitted that the learned Justices of the Constitutional Court erred in law and fact when they failed to generally evaluate the evidence adduced in the petition as a whole thereby arriving at a wrong conclusion. Counsel reiterated their arguments in grounds 7, 2, 3, 4, 5, 6 and 7 above, and prayed that this Court finds in favor of the Appellant on those grounds. Learned Counsel for the 1"t Respondent, in reply, submitted that no issues of constitutional interpretation arise out of Grounds 8 and 9 of the appeal, and that both grounds do not set out any criticism against the Constitutional Court on interpretation (or lack thereof), of any Article(s) in the constitution or the unconstitutionality of any provision of the FIA. Counsel submitted that the Appellant does not set out the evidence said not to have been evaluated by the Constitutional Couru and also does not articulate Ground 9, which is seemingly incomplete. He relied on the case of Mugerwa Evaristo Kafeero vs National Forestry Authority, Supreme Court Civil Appeal No. 008 of 2020 to support his proposition. 23 Leamed Counsel submitted that the dismissal of Constitutional Petition No, 44 of 2012 was done after a thorough analysis of evidence, as adduced by both sides, by the Constitutional Court. He also submitted that it is trite that he who alleges must prove. He contended that, in this case, not only did the petitioner fail to put to the Constitutional Court evidence in support of its allegations, but the 1st Respondent placed before the same Court overwhelming evidence of the precarious and grave state of affairs of the NBC, the intervention measures put in place by the 1.t Respondent in a bid to resuscitate it its failure to turn around its fortunes in spite of the intervention measures, and its eventual liquidation, as covered under Grounds 1 and 2 of this appeal. Leamed Counsel for the 2nd Respondent also, in reply to the Appellant's submissions on Grounds 8 and 9, contended that the Appellanf s criticism of the leamed Justices of the Constitutional Court has not been convincingly substantiated. He submitted that the majority Justices of the Constitutional Court properly addressed themselves to the conflicting arguments by the parties, analyzed the evidence adduced, and came to the right conclusion. He referred this Court to pages 40 to 1,87 of the record of appeal and maintained that there was ample evidence of the transactional history of the facts leading to the petitiory that is, the on-site inspection report as at December 31't 20L0, various correspondences, and minutes of the meetings between the Deputy Governor of BOU and the majority shareholders of NBC dated 10ft May 20-12 and 25n June 20'12. He contended that the Constitutional Court relied on all the said adduced evidence to arrive at its finding. The 2nd Respondent also contended that the learned majority Justices of the Constitutional Court exercised their duty properly within the principles 24 enunciated by well-known and well accepted case law and jurisprudence, and that their findings were premised on proper evaluation of the evidence adduced by both the Appellant and the Respondent in the petition. Consideration of Court Grounds 1 & 2 Ground 1: The Learned |ustices of the Constifutional Court erred in law and fact when they held that Part 9 of the Financial Institutions Act (20M) affords a distressed Financial Institution a right to be heard. Ground 2: The Learned )ustices of the Constitutional Court erred in law and fact when they held that National Bank of Commerce was given an opportunity to be heard in respect to all issues which culminated into its closure on the 27th September 2012. In faulting the finding of the Constitutional Court that Part 9 of the Financial Institutions Act 2004 affords a distressed financial institution a right to be heard, the Appellant contends through his counsel that section 82 does not subordinate the process of revoking a banking license under section L7 to the corrective actions given under that section. In addition, the Appellant contends that section 82 provides for the invocation of corrective actions by BOU, but does not to provide for the hearing of the affected bank, in this case the NBC. 25 I will consider grounds 1 and 2 jointly since both grounds cover the question of the right to be heard under the Financial Institutions Act 20M, and whether the said right was, in fact, violated by the 1'tRespondent when it proceeded to close and commence liquidation against the NBC. The Appellant also argues that the right to a fair hearing under the Constitution envisages that a person should be accorded adequate time and facilities for the preparation of that person's defence; is presumed innocent until proved guilty; and is to appear before an independent and impartial tribunal. The Respondents, on the other hand, contend that the leamed Justices of the Constitutional Court did not err in law and {act when they held that Part 9 of the Financial Institutions Act 2004 affords a distressed financial institution a right to be heard; and when they held that NBC was given an opportunity to be heard. To determine whether or not the leamed Justices of the Constitutional Court erred in law and fact when they held that Part 9 of the Financial Institutions Act,2004 affords a distressed financial institution a right to be heard; and when they held that NBC was given an opportunity to be heard, I will first address the provisions of section 82 of the FIA which both counsel agree provides for the invocation of corrective action by BOU. Section 82 falls under Part 9 of the FIA, and it states that:- " 82. lnterzention (1) lf the Central Bank has reason to belieae or fnds that the ffiirs of the financial institution are conducted in a manner detimental to the interests of the depositors or prejudicial to the interests of the f.nancial institution or in contraaention of this Act, or any other zttritten lattr or that the fnancial institution has refused to submit to inspection, or hns proaided false information, the Central may, Tlithout prejudice to any other course of nction- 26 (a) order in writing that the financial institufion takes remedial action to comply toith this Act or regulations, notices, or orders issued under this Act; @) issue directions regarding measures to be takn to improae the management, fnancinl soundness or business methods of the fnancial institution; (c) require the directors or managefient of the financial institution to execute an agreement concerning their implementafion of orders or direcfions issued under paragraphs (a) and @) of this subsection; or (d)perform or appoint an agent to perform a special examination of the financial institution to dttermine the fnancial condition of the institution and eoaluate resolution opfions, at the cost of the f.nancial institution . (2) IMure a financial insfitution fails, refuses or neglects to comply tttith an order, direction, or agreefient issued or made under subsecfion (1-) then the Central Bank may do any or all of the following - (a) initiate a legally binding cease and desist order, of either temporary or indefnite durafion requiring the financial institution and its management to- (i) stop the improper or unacceptabb practice; (i) put a limit to lending; or (iii) stop any declaration of dittidends. (b) remooe or suspend any person from the management of the ffiirs of the finan ci al in stitution ; (c) impose penalties on the offending member of the management to be made personally; 21 (d) appoint a person utho, in the opinion of the Central Bank is, suitabltl qualified and competent to afutise nnd assist the institution generally or for the purpose of implementing the orders, directions or agreements under paragraphs (a) (b) or (c) of this subsection and the ndaice of a person so appointed shall haoe the same force and effect ns a direcfion made under paragraphs (a), (b), or (c) and shall be deemed to be a direction of the Central Bank under this section; (e) appoint a person, suitably qualifud nnd competent in the opinion of the Central Bank, to manage the ffiirs of the financial institufionfor such peiod as shall be necessary to rectifu the problem; (J) require the fnancial institution to reconstitute its board of directors toithin such period as shall be specified; (g) tuithhold approaals on establishmtnt of netu branches; (h) zuithdrau the foreign exchange dealers' licence; (i) require the financial institufion to add such capital as may be specifud; or (j) impose any other sanctions as the Central Bnnk may deem appropriate in the circumstances." The foregoing extracted provisions of section 82 of the FIA suggest that the interventions as set out in the said section are to be taken by the 1st Respondent as regulator against a financial institution which either refuses to submit to inspection or provides false information. This is in sync with the objective of the FIA, which, before it was revised in 2023, in its long title, stated that it was an Act:- 28 "to reoise nnd consolidate the laru relating to fnnncial institutions; to prooide futllutegulqligl-lgntAl and discipline qf .financial institutions W the C.entral Bank...and to prottide for other relatetl matters." (underlined for my emphasis). In implementing the interventions set out in section 82 of the FIA, section 128 (1) of the same Act states as follows:- "128. Recovery of civil penalties (1) Before imposing a cittil penal$ on any financial institufion or person under this Act, the Central bank shall, except in the case of an emergency, giae to the financial institution or person not less than three dnys' notice in urifing requiing the financial institution or person to shotu cause uhy the cioil penalty shoulil not be imposed." Thus, based on the foregoing provisions of sections 82 and128 of the FIA, it is very clear that Part 9 of the Financial Institutions Act 2004 affords a distressed Financial Institution a right to be heard. To that extent I would not find the impugned provisions to be unconstitutional as the Appellant would want this Court to believe. This brings me to the question of whether the right to be heard as enshrined in section 82, rcad together with section 128 of the FIA, was, in fact, invoked by the l.'t Respondent when it proceeded to close the NBC and commence liquidation against it. The 1't Responden! in paragraph 8 (e) of the affidavit in support of the 1't Respondenfs Answer to the Petition sworn by Benedict Ssekabira, the 1't Respondenf s Director Commercial Banking, stated that:- " On the 18th Mny 2011, the 1,t Respondent issued a directiae to NBC to take note of the superuisory concerns and initiate correctiae actions follouing the 31* 29 Decenrber 2010 unsatisfactory rating, but NBC fniled to take the requisite correctiae action." In paragraph 8 (i) of the same affidavit, the 1't Respondent, through Ssekabira's affidavit, stated that on 5ff October 2011, the 1't Respondent's Governor wrote to the Chairman of NBC (Mathew Rukikaire) to express the 1't Respondenf s concem about the shareholders' dispute, and to urge the shareholders to resolve it urgently. That in February 2012 the dispute escalated into a civil suit HCCS No. 73 of 2012 Emirates Africa Link Vs NBC, Amos Nzei and Another; and that earlier to this, in October 2010, another case HCCS No. 361 of 2010 Prof. Kanyeihamba 8 320 Others Vs Amos Nzei, Amama Mbabazi and 2 Others, where NBC's majority shareholders were sued by 321 minority shareholders for a declaration, inter alia, that NBC does not exis! and that its properties be transferred to another company known as Kigezi Bank of Commerce. The said letter of 56 October 2011 was attached as annexure E to the 1't Respondent's affidavit in support of the Answer to the Petition. The letter of 5n October 2011, which referred to an earlier letter dated 26ft August 2011, was in essence, urging the NBC to recapitalize the Bank so as to make it compliant with the minimum capital requirements, since the then NBC capital position of Uganda shillings 4.2 billion was way below the statutory requiremen! the minimum of which was revised to from shillings 4 billion to 10 billion effective 1'tMarch 201-1., and to shillings 25 billion effective 1$March 2013. 30 The 1't Respondent's letter (directive) to NBC is attached to the affidavit as arrnexure C. In addition, Annexures F (i) and F (ii) to the 1't Respondent's supporting affidavit show that meetings were held between the majority shareholders of the NBC and the Bank of Uganda Officials, on Thursday 10s May 2012 and Monday 25th June 2012 respectively, to discuss NBC's under-capitalized condition, and how the same could be rectified. The evidence further shows that NBC was closed in 2012, that, as early as2009, and throughout 2010, 2011,, and 2012, BOU went at great length to provide a recovery plan for the distressed bank before it finally closed it n 2012. Throughout the period in question, NBC was given a right to be heard. Indeed, through its shareholders and stakeholders, the NBC was heard through various interactions, including discussions and correspondence between the BOU and NBC. The meetings and correspondence in question between BOU and NBC all concerned the operations of the NBC, particularly NBC's inadequate capitalization, and how it could be re-capitalized to meet the required BOU standards and f or to rectify the areas of default. NBC was continuously and at all material times afforded a right to be heard by BOU for a period of three years. The leamed Justices of the Constitutional Court, as reflected in their resPective judgments, considered all the evidence as re-evaluated above before finding that part 9 of the FIA accords a right to a fair hearing, and that the NBC was accorded a right to be heard by BOU before the former was closed. I would accordingly not fault the learned Justices of the Constitutional Court for their findings and decision on the issue at hand, because their findings are evidence- based. Grounds 1 and 2 of the appeal fail. 31 Grounds 3 & 5 Ground 3: The Learned |ustices of the Constitutional Court erred in law and fact when they disregarded and or failed to interpret the impugned provisions of the Financial Institutions Act to wit Sections 28 (5), 57 , 77, 100 and 101. Ground 5: The Learned |ustices of the Constitutional Court erred in law when they held that Section 101 of the Financial Institutions Act (2004) does not oust the jurisdiction of the court when it refuses the entertainment of any application for stay of proceedings in relation to liquidation or winding up of a financial institution. In Grounds 3 and 5, the Appellant maintains that sections 28 (5),57,77 ,'l'00 and 101 were not considered or interpreted by the Constitutional Court. He also challenges the provisions of section 101 in that it ousts the jurisdiction of court to stay proceedings during liquidation of a financial institution. In his petition to the Constitutional Court, the Appellant (petitioner at the Constitutional Court) pleaded that he:- " ...has suffered and islikely tofurther suffer the inftingement of his fundamental rights for rensons that the 1'I Respondent and some of the proaisions of the Financial Protsisions Act, 2004...are inconsistent ruith and are in contraoention of the Constitution of tht Republic of Uganda 1995...." The Appellant accordingly prayed to the Constitutional Court to issue, among others, declarations tha t:- "(i) sections 17 (f), 7 (c), 2B (5), 57, 77, 88, 89, 99, 100 (2) and 101 of the Financial lnstitutions Act,2004 giaing xueepingpotuers to the l't Respondent 32 are inconsistent uith Articles 2, 26, 28, 40 (2), 42, 44 and 162 (2) of the Consfitution of the Republic of Uganda. (ai) Sections 17 (fl,7 (c),77 (1, 2,3), 88, 89,99,100 (2) (il, 101. ofthe Financial Institutions Act emporuering the 1"t Respondent, to act in an arbitrary manner, tuithout affording the Petitioners a fair heaing, access to Courts of Lato and to act contlary to the pinciples of natural justice are inconsistent with Articles 2, 28, 42, 44, and 162 (2) of the Constitution of the Republic of Ugnnda." The Appellanf s faulting of the leamed Justices of the Constitutional Court for their failure to interpret the impugned provisions, was in relation to sections 28 (5),57,77,100 and 101 of the FIA. In his submissions, however, the Appellant's counsel chose not to submit on sections 100 and 101, but went on to submit on sections 88,89,99 which were not the subject of his grievance as reflected in Ground 3 of his appeal. At the hearing of this appeal, the Appellant did not seek this Court's leave to amend his memorandum of appeal. So, I will focus only on the sections impugned in Ground 3 of the appeal, namely sections 28 (5),57 ,77,1.00 and"ll1. of the FIA, in determining whether the learned Justices of the Constitutional Court failed to interpret them, and if so, why they did not interpret them. The powers outlined in the impugned sections as set out in Ground 3 of the instant appeal, and as highlighted by the Appellant in his submissions, are, specifically, section 28 (5), now section 27 (5) n the revised edition of the Laws of Uganda 2023, which allows BOU to impose a civil penalty on a bank for a 33 I have already stated above that the Appellant chose not to submit on sections 100 and 101 of the FIA, though they are among the sections he impugned. Section 100 confers on a liquidator, with the approval of BOU as the regulator, numerous powers that would enable such liquidator to deal with a financial institution undergoing winding up or liquidation. Section 101 prohibits a court from entertaining any application, except those filed by BOU, for stay of proceedings in relation to the liquidation or winding up of a financial institution under the FIA. The language of sections 28 (5), now 27 (5) Revised Edition 2023;57, now 56, Revised Edition 2023; 77,now 76, Revised Ed1non2023;100; and 101 shows that the said impugned sections relate to prudential regulation of financial institutions in Uganda by the BOU as the regulator, aimed at safeguarding depositors' interests, especially their money, and the public interest, as well as ensuring the stability and discipline of financial institutions, and the stability of the economy, among other things. The uniqueness of the business of financial institutions requires prudence, steadfastness, plus timely and precise actions or decisions. 34 deficiency in operating below a minimum holding of liquid assets; section 57, now section 56 in the revised edition of the Laws of Ugan da202i, which allows BOU to remove/suspend directors of a bank for sufficient cause, that is, failing to comply with the fit and proper test specified in the third schedulei and section 77, now section 76 in the revised edition of the Laws of Uganda 2023, which allows BOU to order for the removal of the chief executive, chairperson or director of a bank and take conlrol over management of the affairs of such bank. In addition, it would appear from the language of Ground 3, and from the submissions of the Appellant's counsel on the said ground of appeal, that the Appellant desires that this Court specifically addresses other alleged violations of the Constitution by BOU. In Ismail Serugo Vs Kampala City Council & Attorney General, Supreme Court Constitutional Appeal No. 2 of 1998, Wako Wambuzi CJ (as he then was), had this to say about the powers of the Constitutional Court:- "l am autare thnt the Constifutionnl Court is also n competent court under Arficle 50 but this Court has already held thnt the Constitutional Court has no iurisdictiot in am1 matter, tohich does not inttoltte the interpretation of the Constitution." (underlined for my emphasis). The same position was stated in Attorney General V Tinyefuza Constitutional Application No. 1 of 1997. Regarding the circumstances of the instant appeal, the record shows that the Constitutional Court, in the lead Judgement of Geoffrey Kiryabwire JA A/ICC, at page 409 of the record of appeal (page 27 of the judgment), stated:- "The eaidence on record shozos that problems of the NBC had started long before the date Jlagged by the Petitioner of the 27th September, 2012. lt is also clear to me thnt the owners of the NBC uere giaen a hearing as to the state of the NBC and a chance to take correctiue actions. Haoins found as such it follotus that there is no need for me to specificalla address the other alle ged uiolations of the 35 Constitution by BOU as they would llozo ftom a rtnding that the right to be heard uas aiolated uhich I haae not found." (underlined for my emphasis). The Appellant's presentation of sections 28 (5),57,77,88,89,99,100 and 101 of the FIA in the petition was premised on a violation of the right to be heard. The sections were clustered together, and, where the Constitutional Court found that the right to be heard had not been violated, such sections were not considered. Having found that the NBC was given a right to be heard, the sections could not be declared unconstitutional. Thus, based on the foregoing, the Appellant's expectation to have each section considered individually by this Court would be a futile task, after making a finding that the right to be heard had not been violated, and that the NBC was given a right to be heard. Based on the authorities cited above, I have no reason to depart from the majority position stated by the Constitutional Court. This Court therefore finds that the Court exercised its discretion judiciously. Considering section by section, after the initial finding that the right to be heard had not been violated, and that the NBC was given a right to be heard, would be moot and for academic purposes only. The court was clear in its lead judgment that the resolution of the grounds hinged on the right to be heard which it found had not been violated. It cannot therefore be said that the Court did not consider the impugned sections of the FIA. The Appellant, in Ground 5, faulted the majority decision of the Constitutional Court to dismiss the petition premised on the finding in the lead judgment that:- " As to Section 101 of tla FIA tultich protsides tlut no stay shall be grnnted during the utinding up or liquidation of a financial institution I fnd that tltis is not an 36 ouster ofjuisdiction ofthe court. The Section only limits the remeily that aparty may haae. Such limitnfion is not unusual during insolaency." It is the Appellant's argument that section 101 of the FIA does not just limit the remedy that a party may have by accessing the court for assistance during the winding up or liquidation of a bank, it actually ousts the jurisdiction of the court when it states in mandatory terms tha! " the Court slmll not entertain any application for stay of proceedings ...." According to the Appellant's counsel, a restriction or restraint does not take away the right, or forbid the doing of a thing, that rather, it regulates or qualifies the enjoyment of the right or the doing of the thing. He accordingly maintained that section 101 is not a restriction or restraint because it does notjust regulate or qualify the right of a party to access the courts; that it actually bars or forbids a pafiy from availing itself of the services of the court; and that, on that basis, it was wrong for the Constitutional Court to find that the impugned section did not oust the jurisdiction of the Court. Counsel also contended that, even if it were to be said, for arguments sake, that section 101 merely limited the Courf s power to entertain disputes, the law views any limitation of High Court's unlimited original jurisdiction granted under Article 139 (1) of the Constitution, to be unconstitutional. The Appellant contends, therefore, that the Constitutional Court erred in law to find that the impugned provision of section 101 was not unconstitutional; and that the said court's error has occasioned a transgression of the NBC's constitutional rights which must be redeemed by this Court. 37 The Respondents, on the other hand, maintain that section 101 does not oust the jurisdiction of court to entertain and resolve a dispute relating to the liquidation process, or even the regulator's actions during such process, but rather expressly bars the issuance of an order of stay of proceedings (which is an interim or interlocutory remedy), upon the commencement of the liquidation of a financial institution. It is the argument of the 1"t Respondent that section 10L only limits the remedy that a party may have; that such limitation is not unusual during insolvency; and that, in that respect, the court did not err as alleged by the Appellan! when it made that finding. The questions to contend with under this ground of appeal, are whether section 101 of the FIA ousts the jurisdiction of courf or, conversely, whether it merely limits a party's rights to seek an interim remedy to stay liquidation proceedings once liquidation has commenced. Halsbury's Laws of England Fourth, Edition Volume 10, paragraph 720 at pages 327 defines " Ouster of Cnurts lurisdiction" as follows:- "720. ...'fhe subject's right of access to tle courts may be takn nuay or restricted by statute, but the language of any such statute ruill be jealously watched by the courts and zoill not be extended beyond its least onerous meaning unless clear words are used to justify such extension. A statute may proaide that a question in dispute arising under the statute shall be ibtermined by a minister or by a specifed tribunal. Whilst the court's jurisdiction is ousted uhere a tribunal is specifud to deal with claims arising under that stahrte, it is othenoise if a non-exclusiae tibunal is indicated, and zuhere the determination of a specrfud tibunal is nullity, the court uill inquire into the purported determination. Where an issue arises upon proceedings before the court, the 38 court's jurisdiction to dispose of thnt issue can only be ousted by the plain anrds of a statute. The extent to tohich, and the mains by tuhich, the ,nlidity of an order made under the authority of a statute can be questioned in the courts may be laid doton by stntute." Black's Laut Dictionary, Ninth Edition by Bian A. Garner (Eilitor in Chiefl, at page 7211, defines " oust" as, among other things, meaning to put out of possession; to deprive of a right or inheritance. Section 10L provides as follows:- " (1) Nottoithstanding anything to the contrary in any other law, a court shall not entertain any application for stay of proceedings in relation to the liquidation or uinding up of a fnancial institution under this Act. (2) Subsection (1) does not apply to an application filed fu the Czntral Bank.,, The foregoing extracted provisions of section 101 of the FIA suggest that it is the financial institution undergoing liquidation, rather than the Central Bank (BOU) which is liquidating it, which is disempowered from applying for stay of liquidation proceedings against such financial institution. The language of the section does not oust the jurisdiction of court from resolving a dispute concerning the liquidation of a financial institution. It rather prohibits a court from entertaining any application (other than that filed by the Cenfral Bank) for stay of proceedings in relation to the liquidation or winding up of a financial institution under this Act. This, in my opinion, means that the court,s powers to entertain applications for, or to gran! the interim remedy of stay of proceedings once liquidation process has commenced are restricted only to the Central Bank (BOU) as regulator. 39 It is the Appellant's argument that the majority decision of the Constitutional Court justifying the existence of sechon 101 and finding that, the section only limits the remedy that a party may have, and that such limitation is not unusual during insolvency, is ill founded since, even the Insolvency Act 2011 which deals with insolvency, does not have such provision that completely bars a party aggrieved by the liquidation of a Company from accessing the courts. I have carefully perused the provisions of the Insolvency Act cap 108. Just like the Appellant's counsel submitted, there is no provision in the Insolvency Act that restricts a party from filing an application to stay liquidation proceedings. Section 254 of that Act provides that the rules of equity and common law applicable to corporate insolvency and bankruptcy of individuals and receivership shall apply except as they are inconsistent with this Act. At common law, a court has discretion to grant a stay of proceedings, including liquidation proceedings, but such court will consider the potential impact on creditors, the financial institution s assets, and the overall fairness of the proceedings. See Halsbury's Laws of England Vol. 52 paragraph 405. Similarly, in equity a court may exercise its discretion to grant a stay, considering factors like the interests of justice, the potential for irreparable harm, and the balance of convenience, which are the principles commonly applied by courts when considering whether or not to grant interlocutory orders like that of temporary injunction. The Hansards of the Parliament of Uganda show that the Legislature passed the impugned section 101 without debate, along with several other sections in the Act. So, to that extent, it may be difficult to gauge the intention of the Legislature when legislating on section 101. However, the report of the 40 Parliamentary Committee on Finance, Planning and Economic Development which scrutinized the Financial Institutions Bill 2002 after it was read for the first time, in its findings and report to Parliament, highlighted the background to the Bill as follows:- "This Bill is seeking to repeal tfu Financial lnstitutions Statute (FIS) 1993, tulriclt replnced tln Banking Act 1969. Since tlu enactnrcnt of FIS 1993, there hnae been significant deaelopments in tl're ftnance sector, SullLdepelepljEuls include: a Intensified liberalizntiott of Uganda's FinnnqLql Sg!!o! lggu spe ci alize d re sul at ion. a Internafional Superaisory Conaergence under the guidance of the Basle Committee requiring Uganda's legnl frameutork to be reaietoed. The deaelopment of neu forms of ftnancial institutions business a introducinp netu hrues of isks thus reouirins nettt resulatont frametrtork. a Closure of a number of Banks due to insoluencv, deficiencies in the latu, rueak superaision and other reasons. It zuas, therefore, considered appropriate by Goaernment to address the abooe concerns by accommodating the issues through a proposed neut law; the Financial lnstitutions Bill, 2002, tohich is nou before this House. . .." (underlined for my emphasis). The FIA has a commencement date of 26ft March 2004. It was clearly enacted to, among others, cure the mischief of failing commercial banks and financial institutions that had almost become a norm in the 1990s and 2000s. The FIA 2004 was enacted following the Central Bank's (BOU) closure of a number of banks in Uganda, including Teefe Trust Bank which collapsed in 1993; the 41, Cooperative Bank, the Greenland Bank, the Trans-Africa Bank, and the Trust Bank all of which collapsed between 1998 and 1999. See Martin Brownbridge: Resolving Bank Failures in Uganda: Policy Lessons from Recent Bank Failures; Development Policy Review luly 2002. Martin Brownbridge (supra) highlights a number of reasons why intervention in distressed banks is a particularly difficult area of regulatory policy. One of the reasons is that:- " ...Thirdly, there is nn ineztitnble tension between the desire to giue a distressed. bank time to remedy its problems arul the need to stem losses to depositors and taxpayers and to aooid moral hazard. Allotoing a distressed bank to remain open ineoitably increases moral hnzard, because the bank's oltiners, tuith little or none of their capital left to protect, har:e strong incentiaes to take excessiae risks tuith ilepositors' money in the hope of restoring the rtalue of their capital ('gambling for resunection'), or simply to loot uhnt is left of the bank's assets (Akeflof nnd Romer L993). Hence allouing n distressed bank to remain open risks an escalation of losses to its creditors. Fourthly, interuention is usually politically sensitiae, because bank closures entail costs for bank customers and staff, and for their ozoners and debtors utho are often polihcally zoell connected...." Thus, many jurisdictions have emphasized speed, efficiency, and depositor protection over the conventional considerations for stays of proceedings as justifications for not allowing stays during liquidation of financial institutions. Liquidation proceedings need to be carried out quickly and efficiently to minimize disruption to the financial system and prevent further losses. Financial institutions play a critical role in the economy which iJ not strictly observed could have far reaching consequences that could lead to widespread 42 financial instability. Financial institutions also hold deposits and other assets on behalf of their customers, and, for the sake of depositor protection, altowing stays could delay or prevent the return of such assets to their rightful owners. Stays of liquidation proceedings could also provide an opportunity for parties to strip assets from the financial institutiory making it more difficult to recover losses. Allowing stays could further create moral hazard, where financial institutions take an excessive risk, knowing that they will be bailed out or allowed to delay their obligations. The provisions of section 101, in my considered opinion, were put in place to address situations of distressed financial institutions that are no longer going concerns attempting to resuscitate themselves through obtaining interim stays during their being liquidated, at the expense of depositor's and or the public interest. The adduced evidence in the instant appeal as brought out in paragraph 8 (i) & 0) of the affidavit of Benedict Ssekabira, would testify to such situation, that:- Q...Ay the end of March 2012, NBC's core capital had fallen to belou 50% of the minimum statutory requirement because of the ongoing losses it toas incurring. . . . (l)...NBC's total expenses lud been more than double its total income ruith no sign of improaement. NBC's continued operations became a threat to its depositors. lt was imprudent to expect that shareholders utould be able to inject neu capital to preoent the bank from collapsing in the face of large ongoing losses and shareholder's disputes, By interttening in a timely manner to close the bnnk, ruhile it still had sufficient assets to coaer its deposits, the 1,t Respondent was 43 The foregoing is not peculiar to Uganda alone. It is a good practice or policy in progressive jurisdictions that have to deal with corporate insolvenry and financial stabilily. For instance, Regulation No. 806/2014 of the European Parliament and of the Council of 15 July 2014, ltem (58), states:- "Liquidation of a failing entity under normal insoloency proceedings could jeopardise financial stability, interrupt the prooision of essenfial seraices, and affect the protecfion of depositors. ln such a case there is a public interest in applying resolufion tools. The objectioes of the resolution should therefore be to ensure the continuity of essential financial seruices, to maintain the stability of the financial system, to reduce moral hazard by minimizing reliance on public financial suwort to failing entities, and to protect depositors." Thus, during liquidation of financial institutions, the stability of the financial system is paramount, combined with depositor protection, the public interest, and the need for speed and efficiency to minimize disruption to the financial system and prevent further losses. In my well-considered opinion, it is in that perspective that section 101 of the Financial Institutions Ac! as a statutory measure, would be appreciated, in as far as it addresses the dynamics of liquidation of a failing or a failed financial institution. It is within the said perspective that one would find it not peculiar for the law to limit interim relief applications to courts, without necessarily ousting such court's jurisdiction to handle disputes that eventually emanate from liquidation processes. In that regard, I would conclude that, though, as a general rule, court proceedings may not be stayed, there are exceptions where mandatory or 44 able to safeguaril thes deposits in full and thus fulfll its primary responsibility as n bank regulator under the FlA." stafutory requirements allow court proceedings to proceed or continue uninterrupted, like in situations of bankruptcy, insolvency proceedings, or even in the public interest, or even where there is clear abuse of court process. In the instant appeal, the adduced evidence on record, as deduced from annexure A of the affidavit evidence of the 1't Respondent at the Constitutional Court, is that NBC's banking license had already been revoked pursuant to section 17 (f) ol the FIA. This would mean that, even if NBC's being liquidated was stayed, NBC would not be able to conduct its banking business. This would put the depositor's funds and assets at further risk of being siphoned off. The depositor's monies constituted 92% of the risk weighted assets of a financial institution while shareholders' minimum statutory capital constituted 8% of the risk weighted assets of a financial institution. Over the period 2009 to 2010, on each of the three occasions the 1"t Respondent conducted on-site examinations of NBC as Regulator, NBC was rated or found to be unsatisfactory, and its overall risk rating on all the three occasions was high. On 31"t December 2010, its core capital was found to be Uganda shillings 3,480,000,000/= (three billion, four hundred eighty million which was below the then statutory minimum capital requirement of Uganda shillings 4,000,000,000/ = (four billion). 45 Thus, by the time, it was liquidated, NBC the financial institution was already under extreme distress leading to the revocation of its license. As correctly argued by the Respondents, the issuance of an order of stay of proceedings would not restore its banking license, but would merely expose the depositors' funds to an unlicensed entity, posing the risk of the depositors losing their funds which constituted 92% of the risk weighted assets of the financial institution as opposed to the shareholders' minimum statutory capital that constituted 8% of the risk weighted assets of the financial institution. In addition, the foregoing notwithstanding, the fact that, in this appeal, the Appellant is challenging the liquidation process, and that he did so even at the Constitutional Court where his petition was dismissed, would in itself suggest that the FIA has not ousted, or taken away court's jurisdiction to entertain, resolve and remedy a matter challenging the liquidation, or the liquidation process, of a financial institution. Thus, based on the foregoing, I would find that section 101 only limits the remedy that a party may have during liquidation of a financial institution, and such limitation, based on the authorities cited above, and as correctly found by the majority decision of the Constitutional Cour! is not unusual during insolvency especially of financial institutions. In that respect, the Constitutional Court did not err when it made a finding that section 101 of the FIA was not unconstitutional or that it did not oust the jurisdiction of court. Grounds 3 and 5 of this appeal therefore fail. Grounds 4 & 6 Grounds 4: The Learned )ustices of the Constitutional Court erred in law and fact when they held that Section 17 of the Financial Institutions Act (2004) that permits Bank of Uganda to summarily revoke a license of a Financial Institution was not inconsistent with and in contravention of Article s 2,26, 28, 40, 40 (3) and 44 (c) of the Constitution. Ground 6: The Learned |ustices of the Constifutional Court erred in law and fact when they held that the act, manner and conduct of the 1"t Respondent 46 in cancelling the banking licence of the National Bank of Commerce, taking over its management, appointing a liquidator, negotiating its sale to Crane Bank Ltd a competitor in business all in one day 27tt' September 2012 was not inconsistent with or in contravention of Articles 2,28,26,27, 40 (2), 42, 44 and '162 of the Constitution. Section 17 of the FIA provides for the powers of BOU regarding revocation of a license of a financial institution. The Appellant's argument is that, because BOU is empowered to summarily close a bank, itwas able to close and sell NBC in one day without any hearing. It is already my finding in Grounds 1 and 2 above that the Appellant was given a right to be heard, and that the closure of NBC was not done in a summary manner in one day as alleged by the Appellant; that, for a period of about three years (2009 to 20'12), the NBC was not only accorded a right to be heard, it was also accorded a number of opporfunities to provide a recovery plan before the BOU, in its letter of 27ft September 2012 to the NBC, formally took over the NBC. The adduced evidence as alluded to in the course of considering Grounds 1 and 2 of this appeal shows that the communication channels between BOU and NBC were active between 2009 and 2012. NBC was going through challenges mainly related to its under-capitalization between 2009 and 2012. BOU wrote to NBC and discussed NBC's distress or predicament. By the time the decisions of 27n September 2012 were made, there had been failure on the part of NBC to keep the bank as a going concem. There was need for the BOU to protect depositors interest, hence the decision to take over the Bank. This evidence is mostly reflected in the affidavit in support of the 1't Respondent's Answer to 47 the Petition sworn by Benedict Ssekabira, the 1't Respondenfls Director Commercial Banking. This affidavit evidence was hardly discredited by the Appellant. The respective judgments of the leamed Justices of the Constitutional Court reflect that they were very alive to the adduced evidence regarding the state of affairs surrounding the closure of the distressed bank (NBC). Kiryabwire JA / JCC, at page 27 of his judgment observed:- "In this matter the prooisions of the FIA to my mind haoe policy principles uthich can be stated and dependent upon the stakeholders. lt is tlarefore clear that it is not possible under the FIA to close a bank in one day as alleged by tlrc Petitioner." Cheborion, IA/JCC, at page 11 of his judgment, stated:- "The Petitioner complained that the closure of NBC could not haae been fair because it zuas conducted in one day. That the decision W BOU to reaoke NBC license, talce oaer its operations, negotiate and conclude its sale to Crane Bnnk uas all done on the 27th of September 2012. The eoidence ndduced for BOU shotus that BOU started monitoring NBC's actioities in 2010, and by the time of its closure in 2012, monitoring had been going on for frt least 2 years. The conclusion that the decision to close NBC utas taken in one day is therefore, not a fair reflection of the true state of ffiirs." Musota JA/JCC, as he then was, in the third paragraph of his judgmen! stated:- "The Petitioner's presentation of the actions by Bank of Uganda (BOU) lt1ere too generalized. The legal prottisions used by BOU to intert:ene and reaoke the licence of the Nafionnl Bank of Comnurce and then uind it up are not 48 unconstitutionnl. The Petitioner did not proue this. As rightly statcd in the lead judgement, it is not enough to merely say that the ruhole process Tttas rushed in one day, uhich was not correct. At times, it may be necessary for the regulator to act quickly to aaert a systematic failure in the financial system. Such action normally results in increased public confidence in the banking sector." The Constitutional Court also rightly found that the petitioner did not prove that the BOU acted unconstitutionally per se and in violation of his rights to property when the license of NBC was revoked. I find no basis to disagree with the foregoing extracted findings of the leamed majority Justices of the Constitutional Court. On that basis, for reasons given above, Grounds 4 and 6 of the appeal fail. Ground 7: The Learned |ustices of the Constitutional Cowt erred in law and fact when they acknowledged but failed to declare the petitioner's constifutional rights to privacy which were violated pursuant to the impugned sale of National Bank of Commerce. The Appellant argued that the NBC's right to privacy was breached given that the NBC was sold to Crane Bank, and that the only way it could have purchased the NBC was if it had private knowledge pertaining the NBC. Essentially, the Appellan(s grievance is that, much as the Constitutional Court found that the Appellan(s right to privacy had been breached, it never declared that BOU had breached the right to privacy. The right to privacy is protected under Article 27 of ttre Constitution which provides that:- "27.Rlight to privacy of persory home and other property. 49 (1) No person shall be subjected to - (a) Unlauful search of the person, home or other property of that person; or (b) Unlatuful entry by others of the premises of that person. (2) No person shall be subjected to interference tuith tht prittacy of that person's home, correspondence, communication or other property." Section 40 (3) Bank of Uganda Act provides that:- "The bank shall not publish or disclose any information regarding the ffiirs of a financial institution or of a customer of a financial institution unless the consent of the institution or the customer has been obtained." Cheborion JA /JCC, at page 11 of his judgment, stated that:- " Gitten the uniqte stature of financial institutions and the potential moral hnzard they can generate zuhen they face failure, I uould find that Article 26 (2) on compulsory acquisifion of land, as traditionally applied does not extend to them, Ccrtainly, there uas no question of inftingernent of Article 27 on the ight to priaacy as alleged by the Petitioner because BOU being a public body carrying out prudential regulation hnd the right to suutinize NBC's ffiirs houretser prioate.' At page 30 of the lead judgment, the Constitutional Court held that:- "Secondly, where proaisions of the Bank of Uganda Act hatse not been complied zoith then again, this is a matter of euidence that can be best handled at a tial court." 50 The jurisdiction of the Constitutional Court lies in the interpretation of the Constitution. In its decision, the Constitutional Court was of the opinion that the matter would best be handled through a trial. In the case of Dabule & 2 Others Vs Attorney General & Another, Constitutional Appeal 3 of 2007 [2015] UGSC 20, this Court cited the case Ismail Serugo Vs Kampala City Council and Attorney General, Constitutional Appeal No. 2 of 1998, where the Appellant sought a declaration that the acts of arresting, charging, convicting, sentencing and imprisoning him by the respondents' servants violated his fundamental rights and were inconsistent with the Constitution. Mulenga,JSC, who wrote the lead judgment of the court stated:- "ln my oiew, for tfu Constitutional Court to luae juisdiction the petition must shoto, on the face of it, thttt tht interpretafion of a prooision of the Constitution is required. lt is not enough to allege merely thnt a constitutional proaision has been aiolated. lf, therefore, any ights haae been aiolated as claimed, these are enforceable under Article 50 ofthe Constitutionby another competent court." In the case of Attorney General Vs Major General D, Tinyefuza, Constitutional Appeal No. 01 of 7997, Wambuzi CJ (as he then was), stated:- "ln my aieu, jurisdiction of tlu Constitutional Court is limited in Article 1.j7 (1) of the Constitution to interpretation of the Constitution. Put in a dffirent way, no other jurisdiction apart from interpretntion of the Constitution is giaen. ln these circumstances I would hold that unless the question before the Consfitutional Court depends for its determinafion on the C.onstitution, the Constitutional Court lus tto juisdictiott." 51 This court has, therefore, laid down the principle that, unless a petitioner shows that there is a provision or provisions in the Constitution which require interpretation by the Constitutional Court, the Constitutional Court has no jurisdiction to entertain the petition. The Constitutional Court was established under Article 137 to interpret the Constitution and to provide redress or give directions where, consequent upon that interpretation, it deems it appropriate. It was not established merely to enforce the Constitution, as a court of first instance, against infringement of constifu tional provisions. Thus, in the given circumstances of this appeal where the ground of appeal was not specifically on interpretation of the Constitution but rather infringement of constitutional rights, I am of a well-considered opinion that the matter would best be settled through a trial process before a court of competent iurisdiction. I would, just like the Constitutional Court did, decline to make a declaration on the matter, which I would refer for trial at the appropriate court. Ground 7 of this appeal fails. Grounds 8 & 9 Ground 8: The Learned justice of the Constitutional Court erred in law and fact when they failed to generally evaluate the evidence adduced in the petition as a whole thereby arriving at a wrong conclusion. Ground 9: The Learned |ustices of the Constitutional Court erred in law and fact when they held that the matter of National Bank of Commerce had been resolved a long time ago, ipso facto, the Petitioner was not entitled. Rule 82 (1) of the Rules of this Court states:- "Contents of memorandum of appeal 52 t (1) A memorandum of appeal shall set forth concisely and under distinct heads toithout argument or narratiae, the grounds of objection to the decision appealed against, specifiling the points uhich are alleged to haae been turongly decided, and the nature of the order which it is propoxd to ask the court to make." In Mugerwa Evaristo Kafeero Vs National Forestry Authority, Supreme Court Civil Appeal No. 008 of 2020, this Court in considering a ground of Appeal similar to ground 8 of this Appeal held that- "ln the instant appeal, grounil one faults the learned justiccs of appeal for failing to eaaluate the eoiilence on record but fails to spectfy the ground of objection of the decision and failed to spectfy thz points uhich are alleged to haae been urongly decided and the nature of the order which is proposed to the Court to make. ln other words, the ground did not set out 70hat eoidence the justices of the Court of Appeal failed to re-etsaluate, which resulted in the urong decision. lt is apparent thit the impugned ground contraoenes the rules of this Court and is barred in law." Ground 8 offends rule 82 above as it does not set forth the area that the Constitutional Court did not evaluate. That brings me to Ground 9, which states:- "The karned lustices of the Constitutional Court erred in law nnd fact when they held that the matter of National Bank of Commerce had been resohred a long time ago, ipso facto, the Petitioner was not entitled." It is not clear what NBC was not entitled to. This Court will not speculate what the Appellants intended to state. 53 I Thus, based on the foregoing findings, Grounds 8 and 9 of the appeal fail. In the result, since all the grounds of this appeal have failed, I would dismiss this appeal. Bearing in mind the circumstances of this appeal where the NBC, the subject of this appeal, was liquidated and wound up a long time ago, each party shall bear its costs. Dated at Kampala this day of .......2025 Percy Night Tuhaise justice of the Supreme Court. 4 ryp_A -W-A LUV^ U.\ I il-o t4l*s1x':>r 54 I o-fr% Xozs fr^ga!"va Afl "f* THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CONSTITUTIONAL APPEAL NO. 01 OF 2021 HUM PH REY NZEYI : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :APPELLANT VERSUS 1. BANK OF UGANDA 2. ATTORN EY GENERAL RESPONDENTS (Appeal from the declsion of the Constitutional Couft (Kakuru, Kiryabwlre, Cheborion, Muhanguzi and Musota, llCC) dated 4h November, 2020 in Petition No. 44 of 2012.) CORAM: HON. LADY JUSTICE PROF. LILLIAN TIBATEMWA - EKIRIKUBINZA, JSC HON. LADY JUSTICE PERCY NIGHT TUHAISE, JSC HON. MR. JUSTICE MIKE J. CHIBITA, ]SC HON. LADY JUSTICE ELIZABETH MUSOKE, JSC HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA, JSC HON. LADY JUSTICE CATHERINE BAMUGEMEREIRE, JSC HON. LADY JUSTICE MONICA K. MUGENYI, JSC JUDGMENT OF ELIZABETH MUSOKE. JSC I have had the advantage of reading in draft the judgment of my learned sister Tuhaise, JSC and I agree with her conclusion that this appeal ought to fail. I only wish to add a few observations on some points arising in the appeal. The facts of the case have been dealt with at length in the judgment of Tuhaise, JSC and can be summarized as follows; a bank known as the National Bank of Commerce ("NBC1, being duly licensed by the l't respondent Bank of Uganda ("BOU") for the purpose, carried on the banking business until 27th September,2012 when BOU revoked its licence, ordered for its winding up and transferred its assets and liabilities to another bank, Crane Bank Ltd C'CBL'). Apparently, the BOU'S actions were taken out of concern about the poor financial position of the NBC which in the BOU'S view paused a risk to the ability of NBC to pay its depositors. Following the transfer 1 of NBC'S assets to CBL, the appellant who was a director and shareholder in NBC filed the petition in the Constitutional Couft in which he challenged several provisions of the Financial Institutions Act, 2004 ("FIA"), the law under which the BOU derived its powers to take the actions against the NBC. The appellant also challenged the actions of the NBC as being in contravention of several provisions of the 1995 Constitution. The main contentions set out in the appellantt Petition were as follows: first, that the provisions of Section 77 (f), 77 (c), 28 (5), 57,77,88,89, 99, 100 (2) (i) and 101 of the FIA are inconsistent with the right to a fair hearing under Article 28 (1) and the right to just and fair treatment before administrative bodies under ArlLicle 42; secondly, that the nature of the actions of the BOU in taking over, liquidatlng, winding up and selling the NBC to Crane Bank Ltd contravened the right to a fair hearing under Article 28 (1) and the right to a fair treatment before administrative bodies under Article 42 and the right not to be subjected to illegal compulsory acquisition of property under Article 26 (2) and the right to privacy under Section 27 (7); and thirdly, that Section 101 which bars the institution of a suit for stay of liquidation proceedings contravenes the right of access to courts guaranteed under Article 28 ( 1). It will be noted that all the above three main contentions were rejected by a majority of the Constitutional Court hence this appeal. In his appeal, the appellant abandons some of his original contentions as can be seen from some of his grounds of appeal. The first contention mentioned above is now modified by grounds 1, 3, 4; the second contention is maintained under grounds 2, 6 and 7; while the third contention is modified by ground 5. In the submissions relating to the first contention, counsel for the appellant makes the point that the impugned provisions of the FIA are inconsistent with the right to a fair hearing guaranteed under the provisions of Adicle 28 (t), (:) (c) and (g) because the impugned provisions do not impose an obligation on the BOU to conduct a hearing before taking the decisions permitted under them. In considering this submission, I must observe that the right to be heard arises in the context of Wvo distinct but ana,ogous rights, namely, the right to a fair hearing guaranteed under Article 28 and the right to just and fair treatment in administrative decisions under Afticle 42. The right to a fair trial under Article 28 arises in the context of judicial 2 proceedings before a "court or tribunal" hence it is stated under Adicle 28 (1) that: "In the determination of civil rights and obligations or any criminal charge, a person shall be entitled to a fair, speedy and public hearing before an independent and impartial court or tribunal established by law." The right to just and fair treatment in administrative decisions arises from decisions of bodies exercising an administrative function. In the present case, it will be noted that Article 162 (1) (c) of the 1995 Constitutions empowers the BOU to: "encourage and promote economic development and the effi€ient utilisation of the resources of Uganda throuqh effective and efficient operation of a bankino and credit svstem." Article 162 (3) empowers Parliament to make laws to facilitate the BOU in carrying out its functions and in relation to the effective and efficient operation of a banking and credit system, Parliament enacted the FIA conferring on the BOU various powers of bank supervision and regulation including those laid down in the impugned provisions. Thus, in exercise of its powers under the FIA, the BOU acts as an administrative body which is bound by the rights guaranteed under Article 42. It therefore follows that the constitutionalify of the provisions of the FIA has to be judged against the content of the rlght under Article 42 and not the right under Artlcle 28 (1). Article 42 reads as follows: "42. Right to just and fair treatment in administrative decisions Any person appearing before any administrative official or body has a right to be treated iustlv and fairlv and shall have a right to apply to a court of law in respect of any administrative decision taken against him or her." In my view, the right to just and fair treatment in administrative decisions is similar in content to the principle of sound administration as developed in the jurisprudence of the European Court of lustice. In Joined Cases T- 191/98 and T-2l2l9A toT-2L4198, Atlantic Container Line AB and l Others vs. Commission of the European Communities delivered on 30th September, 2003 it was held that the principle of sound administration entails the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case. In another case C- 26919O, Technische Universitiit Miinchen vs. Commission of the European Communities, 21 November 1991, the Court stressed the need for competent institutions to adhere to several guarantees when carrying out administrative procedures, as follows: "However, where the Community institutions have such a power of appraisal, respect for the rights guaranteed by the Community legal order in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects ofthe individualcase, the right ofthe person concerned to make his views known and to have an adequately reasoned decision. Only in this way can the Court verify whether the factual and legal elements upon which the exercise of the power of appraisal depends were present." In light of the above principles, I would state that the right to just and fair treatment under Article 42 requires that an administratlve body makes its decisions only after carefully and impaftially examining the case before it, and that lt also makes decisions that are reasonably supported by the facts of the case. Thus, in assessing the constitutionality of the impugned provisions, the question to ask is whether the ideal operation of those provisions negates the duty of the BOU to reach decisions supported by the facts after carefully and impaftially examining the case at hand. In my view, that question should be answered in the negative. I observe that all the impugned provisions explain the grounds upon which the BOU shall base its decisions; under Section 17 the BOU may only revoke the licence of a flnancial institution if, interalia, it has gone into liquidation or is conducting business in a manner detrimental to the depositors; under Section 28 (5) the BOU may impose a penalty on a bank for deficiencies in its capital; under Sections 57 and 77, the BOU may interfere with the management of a financial institution if it is being poorly run; and under Sections 99 and 100, the BOU may order the liquidation of a financial institution only when it is 4 justified to do so. The powers granted to the BOU under the impugned provisions are therefore not exercised arbitrarily or without any sound or reasonable basis. It may well turn out that in some casesr the BOU may exercise its powers arbitrarily or fail to make sound decisions but as was stated in the India Supreme Court decision in Joseph Kuruvilla Vellukunnel vs, The Reserve Bank of India and Othert 1962 AIR 1371 in a case considering a challenge to a |aw similar to the FIA, if the central bank abuses its powers under the regulatory laws, what will be struck down would be the action of the central bank but not the law. Accordingly, I would flnd that the powers granted under the impugned provisions should ideally operate taking into account the right to just and fair treatment under Article 42 and all other relevant rights guaranteed under the 1995 Constitution despite the contrary submissions of counsel for the appellant which I would reject. I would therefore find that grounds 1, 3 and 4 fail. I would then move on to consider the second contention of whether the actions of the BOU relating to the liquidation and sale of NBC to CBL contravened the rights to a fair hearing, right to just and fair treatment in administrative decisions, the right to privacy, among other rights. This is a fact-specific question for which it was necessary to adduce evidence in order to be properly addressed. This question also relates to enforcement of rights which falls outside the jurisdiction of the Constitutional Court as correctly stated in Tuhaise, JSC'S judgment. In any case, the evidence contained in the parties' affidavits makes it difficult to determine the question one way or the other. BOU stated in its affidavit that the NBC was having financial dlfficulties which put the money of its depositors at risk and that the difficulties could not be remedied. The BOU also alleged that NBC was having issues of poor corporate governance including sharehoider disputes which further affected the running of NBC. The BOU said that the highlighted issues justifled its actions of closing, liquidating and selling NBC. On the other hand, the appellant stated in his affidavit that NBC's financial difflculties could be remedied if given time and that NBC had enough cash to cater for the needs of its depositors. The appellant also denied the allegations of poor corporate governance and also said that the shareholder disputes were being sorted in Court disputes. In my view, the question as to whether there was any sound basis for the BOU's decision to liquidate and sell the NBC should have been raised in an ordinary suit for proper determination. However, I must stress that the BOU is empowered under the Constitution, the Bank of Uganda Act, and the FIA to supervise and regulate flnancial banks with its primary concern being the protection of depositors' money. The BOU is comprised of experts in the financial field with competence to make sound and reasonable decisions. This does not mean that the BOU cannot make unreasonable or erroneous or malafide decisions while exercising its powers under the governing laws. However, as I have already said, any such wrong decisions ought to be dealt with in an ordinary suit before the Hlgh Court which has powers to grant appropriate remedies. I would find that grounds 2, 6 and 7 must also fail. I would then move on to the third contentlon that Section 101 of the FIA ousts the jurisdiction of the High Court because it bars the High Couft from entertaining an application for stay of proceedings of liquidation or winding up of a financial institution. I would begin my analysis by stating that ouster of jurisdiction is a contract law principle that was developed in the English common law. In Hyman v. Hyman [1929] AC 601, Lord Hailsham, L.C while explaining the principle stated that parties to a contract cannot validly make an agreement either not to invoke the jurisdiction of the Couft, or to control the powers of the Couft when its jurisdlction is invoked. In that case, a husband and wife had made a separation deed in which it was agreed that the husband would make certain payment to the wife and in consideration the wife promised never to institute a suit for maintenance which was provided for under a statute. The wife subsequently petitioned for divorce which was granted and she thereafter applied for maintenance from the husband to which the latter objected making reference to the agreement in their separation deed. In this case, the issue of ouster ofjurisdiction does not arise because Section 101 is a statutory provision and not a part of an agreement between private 6 partles. Furthermore, jurisdiction of a court is granted by statute and in the same vein a statute can take a matter out of the jurisdiction of the Court as Section 101 of the FIA does with an application of stay of proceedings of liquidation of a financial institution. It ls clear that all the authoritles cited in the submissions of counsel for the appellant in support of the point on ouster of jurlsdiction are inapplicable as well. Furthermore, I agree with the views which Tuhaise, JSC gives in her judgment about the purpose of refusing suits for stay of proceedings of liquidation of a financial institution. I would add that the liquidation of a financial institution should ideally be commenced at a point when there is evidence that it is facing financial problems that justifu its dissolution so as to protect depositors' money which is the main goal of banking regulation. At that point, an action for staying the llquidation proceedings would not be in the interests of protecting the money of depositors which justifies the limitation imposed under Section 101 of the FIA. For these reasons I would find that ground 5 also fails. In view of the above reasons, I would dismlss the appeal and make the orders that Tuhaise, JSC proposes. Dated at Kampala this I day of 2025. Elizabeth Musoke Justice of the Supreme Court L^-^ ) }JI s 7 I o d"*f*o^s- a btr- oy-t.A"A L6 erl b THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT I(AMPALA ICORAM: TIBATEMWA-EKIRIKUBINZA; TUHAISD; CHIBITA; MUSOKE; MADRAMA; BAMUGEMEREIRE; MUGENYI; JJSC. ] CONSTITUTIONAL APPEAL NO. 01 OF 2O2L BETWEEN HUMPHREY NZEYI APPELLANT AND :: : : ::: :::: :: ::: : RISPONDINTS [Appeal from the decision of the Constitutional Court in Constitutional Petition No. 44 of 2O12 sitting at Kampala before Hon. Justices: Kakuru, Kiryabuire, Cheboion, Muhanguzi and Musota, JJA/ JJCC deliuered on 4th Nouember 2O2O.l JUDGMENT OF TIBATEMWA-EKIRIKUBINZA, JSC. I have read, in draft, the judgment of my learned sister Percy Night T\rhaise, JSC and I agree with her that this appeal fails and should be dismissed on the grounds she has elaborated in her judgment. I also agree with the reasons she has given for dismissing the appeal, with each pafiy bearing its own costs. 1 1. BANK OF UGANDA 2. ATTORNEY GENERAL Dated at Kampala thi" ....... J. CI day of . lfwqff 2025. Ca,-J aL,h t-# N.'i-,^Lfi e@ wt*l LoLs- 2 By unanimous decision of the members of the Coram, this appeal is hereby dismissed and each party shall bear its own costs. ....... k; . :.V. :$*:.:r:i:}................. PROF. LILLIAN TIBATEMWA-EKIRIKUBINZA JUSTICE OF THE SUPREMT COURT .r' T"^ LoAs @- t*^3, 84^l=r*t @-fr THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CORAM: Tibatemwa-Eki riku binza; Tu haise; Chibita; M usoke; Madrama; Bamugemereire; Mugenyi, JJSC) CONSITUTIONAL APPEAL NO. OI OF 2021 HUMPHREY NZEYI APPELLANT VERSUS 1. BANK OF UGANDA 2. ATTORNEY GENERAL RESPONDENTS (Appeal from thc decision ofthe Corxtitutional Court il Constitutional Petition No. 44 of2012 before Kal<uru, Kirrabwire, Cheborion, Muharguzi and Musoh,lIAIJCC, delivered on the 4' November 2020) NT F IKE HIBITA I have had the benefit of reading in draft the judgment of my learned sister, Justice Percy Night Tuhaise, JSC, and I agree with her judgment and the orders she has proposed. .^ Jt Dated at Kampala this..l./-.5........day of o.'.\ L Hon. Jus tice l<e Chibita @,Aav,b lVtL4ur@1' vLQ b^ a6ar. U4 E 4 D1 2025 JUSTICE OF THE SUPREME COURT U.}-fo-/ , L-:tL '6ot 5 THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA (C0RAM: TIBATEMWA - EKIRIKUBINZA. TUHAISE, CHIBITA' MUSOKE, MADRAMA, BAMUGEMEREIRE, MUGENYI, JJSC) CONSTITUTIONAL APPEAL NO. 01 OF 2021 10 HUMPHREY NZEYI) APPELLANT VERSUS 1. BANK0FUGANDA) 2. ATTORNEYGENERAL) 15 (Appeal from the decision of the constitutional court in constitutional Petition No. 44 of 2012 before Kakuru, Kiryabwire, Cheborion, Muhanguzi and Musota, JJA/JJCC, delivered on the 4h November 2024 JUDGMENT OF CHRISTOPHER MADRAMA IZAMA, JSC I have read in draft the judgment of my learned sister Percy Night Tuhaise, JSC in the above aPPeat. I agree with her judgment and the reasons therefore that the appeal Lacks merit and ought to be dismissed with the orders she has proposed and I 20 have nothing useful to add. Dated at KamPata the 25 hristopher Madrama lzama Justice of the SuPreme Court ))*vor RESPONDENTS 2025 +",J, LVffi 4 { L/\A o t VdLs 1 6oe\aet- \\ 81. *fl* @t^{ d^ -92-'cl^ Ar+ 6^ HUMPHREY NZEYI APPELLANT VERSUS 1. BANK OF UGANDA 2. ATTORNEY GENERAL:::::::::::::::::::::::::::::::::::::::::RESPONDENTS [Appeal from the declslon oJ l(akuttt, Klryabuire, Cheborion, Muhanguz\ Musota, JJA/JJCC, in Constittttional Petltion No. 44 of 2O72, delloered on the 4th ol Nouember 2O2Ol judgment of Catherine Bamugemereire ]ustice of the Supreme Court I havc harl thc oplxrltunitl, to rcarl thc tlrali olriuiou ol'nr1' lcanrerl sistcl l)e lcy Niglrt 'l'uhaise .JSC. I rvoukl agrce w'itlr tlre lealne<l.f ustice that to a largc cxtcnt, this al4rcal rr,as lacking in evi<lence san<l thcrefirre tr>unsel rv:rs uttable to coucisell'arxl suct'inctll' st:lte rcas()us ulron rvhit'h this t'<>urt t'oukI r'c-cvaluate, rc-ltcar atrrl tevct'se the rlccision o[' tlie Constitutional Court. I rvoul<l <lisrniss tlris ap1>cal irr acr'or<lant'c rlitlr the tcrn)s scI out lrl tttl lcut'rtcrI Sistcr'. Justice of the Supreme C,ourt *^; twDy y*ry I &, ry" ,_ v{(u-ct"J THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CONSITUTIONALAPPEAL NO. 01 OF 2O2I CORAM: {Tibatemwa-Ekirikubinza; Tuhaise; Chibita; Musokel Madrama Bamugemereire; Mugenyi; JJSCI Catherine ) Qar.rl ?-D-x ASX- Cg.-E THE REPI'BLIC Of' UGANDA THE SUPREME COURT OF UGANDA AT KAMPALA (Coram: Tibatemwa-Ekiikubinza, Tuhaise, Chibita, Musoke, Madrama, Bamugemereire & Mugenyi, JJSC) CONSTITUTIONAL APPEAL NO. 1 OF 2021 HUMPHREY NZEYI APPELLANT VERSUS 1. BANKOFUGANDA 2. ATTORNEY GENERAL RESPONDENTS (Appeal from the Constitutional Court (Kakuru, Kiryabwire, Cheborion, Muhanguzi & Musota, JJCC) in Constitutional Petition No.44 ot 20121 I Constitutional Appeal No. I of 2021 1. I have had the benefit of reading in draft the judgment of my learned sister Tuhaise, JSC in this Appeal. I entirely agree with the position articulated therein on the constitutionality of both the purpose and effect of the Financial lnstitutions Act, Cap. 57, as well as the action undertaken by Bank of Uganda ('the first respondent') in relation to the National Bank of Commerce. 2. I do therefore abide the findings and conclusion in the lead judgment that this Appeal ought to fail, and each party should bear its own costs. r)/tL Dated and delivered at Kampala this ......1ff... day of ....... 2025. Monica K. Mugenyi Justice of the Supreme Court S4-lrr,..^r& )v\^'va L'Ltt^ ry f*tl' Ac-r' $o"(roae ' t-,\4 4 { 2 Constitutional Appeal No. I of 2021 JUDGMENT OF MONICA KALYEGIRA MUGENYI. JSC La 44 "9/nl qf a{+4 O*--2