KAMPALA — Former State Minister and businessman Hon. Henry Banyenzaki has suffered a major setback in his battle against Tropical Bank after the Commercial Division of the High Court dismissed his attempt to stop the bank from auctioning his properties over an outstanding loan dispute worth hundreds of millions of shillings.
In a judgment delivered on June 22, 2026, Justice Patience T.E. Rubagumya threw out Banyenzaki’s case, ruling that the dispute involved complex and heavily contested facts that could not be resolved through the legal procedure he had chosen.
The decision leaves the former minister facing renewed uncertainty over several prime properties that Tropical Bank had moved to sell in an effort to recover a debt that has remained unresolved for years.
At the heart of the dispute is a loan facility of Shs2 billion that Banyenzaki obtained from Tropical Bank in February 2013. To secure the loan, he mortgaged several properties, including land in Naluvule, Wakiso District, and a valuable property at Peninsula Crescent in Luzira.
Court records show that Banyenzaki later paid approximately Shs3 billion toward the loan and accumulated interest. However, disagreements emerged regarding the remaining balance, leading him to sue the bank in 2017.
The dispute was eventually settled through a consent judgment entered in 2020. Under the agreement, Banyenzaki acknowledged that he still owed the bank Shs600 million, after making an additional payment of Shs400 million toward an agreed debt of Shs1 billion.
The parties agreed that the outstanding balance would be recovered from compensation Banyenzaki expected to receive from the Uganda Electricity Transmission Company Limited (UETCL) for land affected by a government infrastructure project.
Crucially, the consent judgment required Tropical Bank to release the title for the affected property so that UETCL could process the compensation claim and subsequently channel the money through Banyenzaki’s account, enabling the bank to recover its outstanding debt.
A Deal That Never Materialised
Banyenzaki told court that despite the agreement, Tropical Bank never released the title to facilitate the compensation process.
According to his court filings, the bank’s failure to hand over the title frustrated efforts to complete compensation procedures, thereby preventing him from settling the outstanding loan balance through the agreed mechanism.
He further argued that the compensation process had continued and was nearing completion, with payment expected during the current financial year.
However, while the compensation process remained pending, Banyenzaki said he was shocked to discover in October 2025 that Tropical Bank had instructed auctioneers, Vital Signs Debt Solutions, to commence foreclosure proceedings against him.
The bank served him with a 21-day notice threatening to sell the mortgaged properties and subsequently advertised some of the properties for public auction in the Daily Monitor newspaper.
Feeling cornered, Banyenzaki rushed to court seeking a permanent injunction to stop the auction.
He also sought orders compelling the bank to surrender the title to UETCL, declarations that the bank had acted in contempt of court, and awards of general, punitive and exemplary damages.
Bank Fights Back
Tropical Bank mounted a vigorous defence.
Through its Company Secretary and Head of Legal and Compliance, Asuman Bamweyana, the bank argued that Banyenzaki had failed to honour the consent judgment for more than five years.
The bank maintained that the debt remained unpaid and that it was therefore entitled to exercise its legal rights as a mortgagee.
According to Tropical Bank, Banyenzaki had originally represented that compensation from UETCL was imminent. However, after the consent judgment was signed, the bank allegedly learned that compensation had not been approved and that investigations were still ongoing to determine whether Banyenzaki qualified as a project-affected person.
The bank pointed to subsequent litigation Banyenzaki filed against UETCL, arguing that the very existence of that lawsuit demonstrated that no compensation had been confirmed.
It further argued that the compensation arrangement was speculative and could not indefinitely prevent the bank from recovering its money.
The bank therefore insisted that the absence of compensation could not extinguish its right to foreclose on the mortgaged properties.
New Evidence Emerges
In response, Banyenzaki produced fresh evidence suggesting that government authorities had indeed recognized his compensation claim.
Court documents revealed that the Ministry of Energy and Mineral Development had sought valuation of his losses and that the Chief Government Valuer assessed compensation running into billions of shillings.
The valuation reportedly included more than Shs2.14 billion in business loss compensation and approximately Shs922 million in land restoration costs.
Banyenzaki also relied on correspondence from senior government officials, including directives from the Prime Minister’s Office and the Ministry of Energy urging UETCL to settle his compensation claim.
The evidence appeared to suggest that government agencies had moved significantly closer to paying the compensation that formed the basis of the 2020 consent judgment.
Judge Declines to Determine Merits
Despite the extensive arguments from both sides, Justice Rubagumya ultimately declined to decide who was right.
Instead, she found that the case had become too complicated for determination through an Originating Summons — a simplified procedure intended for straightforward legal questions with minimal factual disputes.
The judge observed that fundamental disagreements existed regarding the status of the compensation claim, the parties’ obligations under the consent judgment, and whether Tropical Bank’s foreclosure action was justified.
She noted that the court would need to hear and test evidence through a full trial before reaching conclusions on such contested matters.
“The above facts raise complex and substantial disputes of fact which cannot be resolved under this procedure,” the judge held.
The court further found that Banyenzaki’s allegations of contempt of court were themselves contentious and unsuitable for determination under the summary procedure he had invoked.
Justice Rubagumya also pointed out that claims for general, punitive and exemplary damages ordinarily require evidence to be tested during a full trial, making them inappropriate for resolution through an Originating Summons.
Case Dismissed
In the end, the judge dismissed the suit in its entirety.
However, she left the door open for Banyenzaki to pursue the matter afresh through a conventional civil suit filed by plaint, where witnesses can testify and evidence can be fully examined.
Significantly, the court did not determine whether Tropical Bank breached the consent judgment, whether Banyenzaki remains in default, or whether the bank is legally entitled to auction the properties.
Those questions remain unresolved.
The judge ordered each party to bear its own legal costs.
What Next?
The ruling means Banyenzaki has won no immediate protection against the bank’s recovery efforts and must now decide whether to launch a fresh lawsuit if he wishes to challenge Tropical Bank’s actions.
For Tropical Bank, the judgment represents an important procedural victory after years of litigation over the debt.
Yet the substantive battle is far from over.
The central question remains unanswered: whether the bank should have waited for the long-promised government compensation to materialise before moving against Banyenzaki’s properties, or whether it was entitled to enforce its securities after years of delay.
Until a full trial addresses those issues, one of Uganda’s longest-running loan disputes appears destined to continue.
The judgment was delivered electronically by Justice Patience T.E. Rubagumya at the Commercial Division of the High Court in Kampala on June 22, 2026.
