LEGAL EARTHQUAKE! Banking and Insurance Sectors on Edge as Finance Trust, Sanlam Clash in Mega Sh30bn Insurance Showdown

Uganda’s banking and insurance industries are on high alert as a courtroom battle erupts over who should pay for a trail of disastrous land valuations that left Finance Trust Bank exposed to massive loan losses.
At the centre of the fight is a Shs300 billion claim—one of the largest ever—based on allegations that Katuramu & Company Consulting Surveyors filed wildly inaccurate reports, valuing the wrong plots, hiding graveyards, and even claiming buildings stood on land that was completely empty.
Finance Trust Bank, represented by Muwema & Co. Advocates, says it relied on these bogus valuations to issue loans—loans that later collapsed when borrowers defaulted.
And here’s the shocker: The surveyors have already admitted negligence. But their insurer, Sanlam General Insurance, is refusing to pay a cent.
SURVEYORS CONFESS, INSURER SAYS “NO WAY”
In a bombshell letter dated October 4, 2023, Katuramu & Company confessed to the mistakes. But Sanlam hit back, calling the admission “bad faith” and accusing Finance Trust of sleeping on the job by failing to do its own checks.
The case first landed before the IRA Tribunal, which ruled firmly in favour of the bank and ordered Sanlam to cough up Shs1.9 billion.
But the victory was short-lived.
HIGH COURT SHOCKS THE BANK
Sanlam rushed to the High Court, where Justice Patricia Kahigi Asiimwe delivered a ruling that sent shockwaves through the financial sector.
She threw out the tribunal’s order, ruling that Finance Trust had no legal right to enforce the insurance policy because it wasn’t a party to the contract—despite being the victim of the surveyors’ negligence.
In simple terms: The insurance covers the surveyors, not the bank.
NOW THE BATTLE MOVES TO THE COURT OF APPEAL
Stunned by the ruling, Finance Trust has appealed, warning that if insurers cannot be held liable for the work of professionals they cover, then every bank in Uganda is at risk.
The bank argues the ruling has created a “public crisis,” threatening the entire system of professional indemnity insurance—cover relied on by surveyors, valuers, engineers, architects, and lawyers.
A DECISION THAT COULD SHAKE UGANDA
Legal experts say the Court of Appeal’s decision will set a historic precedent: Will banks be protected when professionals blunder? Or will insurers walk away scot-free?
For now, all eyes are on the next courtroom showdown—because the fallout could hit every lender, every insurer, and every professional in Uganda.
About Post Author

Post navigation