Court orders businessman Shukla to deposit Shs 5bn in Bank of Baroda debt dispute

What the report says

The Court of Appeal has granted businessman Mukesh Shukla and his company, Shumuk Aluminium Industries Limited, a conditional stay in a long-running debt dispute with Bank of Baroda (Uganda) Limited. In exchange, the court ordered Shukla to deposit Shs 4.8 billion and $36,870.02 within 30 days as security for the alleged outstanding loan. Justice Esta Nambayo said the order would lapse if the payment was not made on time.

The dispute centers on credit facilities said to have been advanced to Shumuk Aluminium Industries and secured by mortgages over properties in Kampala, including land at Mukabya Road and UMA Lugogo Showground. The company and Shukla, who also signed a personal guarantee, challenged the bank’s enforcement efforts after the High Court entered judgment for the lender and awarded it the debt, interest and costs. Their appeal argues, among other things, that the sums were calculated incorrectly and that the recovery steps were premature.

In its ruling, the Court of Appeal found that the appeal raised arguable issues and that there was a real risk the bank could proceed with recovery before the case is decided. At the same time, the judge said the bank had a lawful interest in securing repayment. The court declined to accept third-party land offered as alternative security and instead required a cash deposit to preserve both sides’ positions while the appeal continues. The underlying commercial dispute remains pending.