Business 18 March 2026 The Observer (Uganda)
Court of Appeal Orders KCB Bank to Pay Businesswoman Damages for Breached Promise
Uganda's Court of Appeal has ruled that KCB Bank must compensate Deborah Kigongo of Kaaya Enterprises Limited for failing to issue promised letters of credit, leading to significant business losses. The decision awards damages, costs, and withheld contract funds, serving as a warning to banks on honoring client commitments. Source: https://observer.ug/news/businesswoman-wins-landmark-battle-against-kcb-bank
The Court of Appeal in Uganda has delivered a significant ruling against KCB Bank, ordering it to pay damages to businesswoman Deborah Kigongo of Kaaya Enterprises Limited.
The dispute arose when KCB failed to issue letters of credit (LCs) as promised in a December 2, 2012 email. The bank had committed to sending the LCs within a week to a Singapore supplier of road construction equipment, enabling Kaaya to clear goods stuck at Mombasa port.
Instead, KCB did not issue the documents or notify Kigongo, citing unmet terms and a Christmas break delay. Post-holidays, the bank refused outright, leaving Kaaya unable to secure alternatives and incurring demurrage fees.
Consequently, part of the goods were auctioned by the Kenya Ports Authority, causing major losses. The court upheld a 2018 commercial court decision awarding Shs 100m in general damages, KSh 1,481,126 and $8,387 in special damages.
In a cross-appeal win, Kaaya received $53,313.9 for 30% of its Uganda National Roads Authority (UNRA) contract price withheld due to the delay. Lead judge Justice Christopher Gashirabake emphasized the bank’s liability.
This landmark case, now under scrutiny in regional banking circles, underscores that banks must honor promises in international trade facilitation. Kigongo reports KCB has not paid and plans further appeals, possibly as delay tactics.
Source: The Observer (Uganda)