The Commercial Court has ruled that Haruna Muwanga, director of BMK Uganda and son of the late BMK, must pay Shs1.4 billion to Youth and Children Affairs Minister Balaam Barugahara.
The court also ordered Muwanga to pay Shs140 million in damages and an interest rate of 6 percent per annum for failing to repay the borrowed sum.
Court’s Decision and Observations
Justice Thomas Ocaya concluded that Minister Barugahara had sufficiently demonstrated Muwanga’s failure to fulfill his contractual obligations, which necessitated bringing the matter to court.
The court ruled in favor of Barugahara, awarding him the costs of the suit and an interest rate of 6 percent per annum on the outstanding amount from the date of default until the filing date of the suit.
Details of the Case
The case was filed in the commercial division of the High Court, where Barugahara sued Muwanga for breach of contract and recovery of Shs1.4 billion.
According to Barugahara, Muwanga approached him in July 2021 for financial assistance, and he agreed to lend him Shs1.4 billion—Shs1 billion transferred to Muwanga’s dfcu Bank account on July 29, and Shs400 million given in cash.
The agreement stipulated that Muwanga would repay Shs1 billion by October 30, 2021, and Shs1.3 billion by January 30, 2022.
To assure repayment, Muwanga, a director at BMK, arranged for standing orders through dfcu Bank in Barugahara’s favor and provided cheques to be deposited if the standing orders failed.
Subsequent Developments
Muwanga requested Barugahara not to deposit the cheques, promising to repay in cash. He managed to repay Shs400 million, leaving an outstanding balance of Shs1 billion.
On January 11, 2022, Muwanga sought additional financial support of Shs400 million, leading to an addendum to the contract.
This new agreement set new repayment deadlines: Shs1 billion by March 11, 2022, and Shs1.3 billion by July 11, 2022.
Despite several attempts by Barugahara to recover the money, Muwanga failed to make the payments, resulting in the filing of the case on January 18, 2024.