The Government of Uganda has been ordered by the Court of Appeal to pay $8.71 million, equivalent to approximately Shs 33 billion, to the Iraqi Fund for External Development. This ruling overturns a previous decision by the High Court that had sought to cancel the long-standing debt payment.
The case revolves around loans totaling $10.96 million that the Iraqi Fund extended to the Ugandan government decades ago. In 2002, the High Court initially ruled in favor of the Fund, ordering Uganda to pay $6.43 million plus an annual interest rate of $2.5$ percent until the debt was fully cleared.
Despite the government being served with court orders to pay in both 2002 and 2016, the debt remained unpaid. When the Iraqi Fund sought judicial review to enforce the payment, the High Court, under Justice Lydia Mugambe, unexpectedly nullified the certificates that authorized the payment.
Justice Mugambe’s decision was based on a 2017 letter from Iraq’s Permanent Mission to the United Nations, which seemed to suggest that the Iraqi government had not authorized any representative to collect the debt from Uganda.
However, the Court of Appeal disagreed, with Justice Fredrick Egonda-Ntende leading the judgment. He ruled that the High Court was wrong to revisit a case that had already been officially concluded. The court’s primary job was to enforce the existing judgment, not to question the original legal capacity of the parties based on new correspondence.
Justice Egonda-Ntende explained that once a trial court issues a final judgment and decree, it becomes “functus officio”—meaning it has completed its official duty and cannot reopen or change the concluded case, especially during the debt collection stage. If the government had genuine new evidence, it should have used the proper legal channels, such as applying for a judicial review or seeking permission to appeal the original 2002 judgment late, rather than using a diplomatic letter to nullify a valid court decision.
The Court of Appeal ruled that there was no “illegality” sufficient to undo the original, unchallenged judgment. Consequently, the appellate court allowed the Iraqi Fund’s appeal, reinstated the original High Court ruling, and commanded the government to pay the $8.71 million debt. Justices Eva Luswata and Esta Nambayo agreed with this final decision, effectively concluding the more than twenty-year-long legal dispute.