KAMPALA, Uganda — DFCU Bank has been ordered by a Ugandan court to pay 810 million shillings in damages for refusing to release land titles, a case in which the judge raised concerns about potential irregularities surrounding the transfers.

Commercial Division High Court Judge Suzan Abinyo found DFCU Bank liable for obstructing the transfer of land titles to 27 individuals who purchased plots from Hosanna Real Estates Ltd. The dispute centered on land that had been used as collateral for a loan Hosanna obtained from Global Trust Bank (GTB).

Court records showed Hosanna’s default and a subsequent agreement to cede a portion of the land to GTB, while retaining 8.96 acres. The liquidation of GTB before the title for the remaining land could be transferred back to Hosanna complicated matters. DFCU Bank later took over some of GTB’s assets.

The 27 plaintiffs had bought plots within the 8.96 acres that should have been returned to Hosanna. However, DFCU Bank allegedly refused to facilitate the transfer of titles to these buyers.

While the ruling didn’t explicitly state DFCU committed fraud, Judge Abinyo questioned why the bank, as GTB’s successor, would not release titles for land that was seemingly not part of GTB’s assets at the time of liquidation. This refusal, despite a clear consent agreement between Hosanna and GTB, fueled concerns about potential irregularities or mismanagement of the land titles during the transition.

DFCU Bank argued it only managed select GTB transactions for the Bank of Uganda and that this specific land was not included. However, the judge dismissed this, asserting DFCU inherited GTB’s liabilities related to the land.

“Consequently,…the titles in respect of Block 171…was meant to benefit the Plaintiffs, which did not materialize when GTB went into liquidation, a process that brought the 1st Defendant[DFCU] on board as a successor in title to GTB in liquidation,” the judge stated.

The Commissioner of Land Registration was also criticized for failing to ensure the proper transfer of the land.

Each of the 27 plaintiffs was awarded 30 million shillings in damages, along with interest. The court also mandated the immediate transfer of the land titles to the rightful owners, raising questions about the reasons behind the initial obstruction by DFCU Bank. The case has now put a spotlight on the transparency and handling of land titles during bank transitions in Uganda.