ADVANCE MATERIAL TRADING PTE LTD (AMT LTD) v GISANDE TRADING LTD ET AL.

ADVANCE MATERIAL TRADING PTE LTD (AMT LTD) v GISANDE TRADING LTD ET AL.

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2025-02-12 - Case/document no.: RS/INJUST/RCOM 00004/2022/SC - Collection: Supreme Court

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ADVANCE MATERIAL TRADING PTE LTD (AMT LTD) v GISANDE TRADING LTD ET AL. [Rwanda SUPREME COURT – RS/INJUST/RCOM 00004/2022/SC (Nyirinkwaya, P.J., Karimunda and Hitiyaremye, J.) February 10, 2023] Law on mortgages – Mortgage – The mortgagor cannot dispose off the mortgaged property which was registered in his/her names without written approval. Facts: Advance Material Trading Pte Ltd and Gisande Trading Ltd, represented by its Managing Director Niyigaba Ignace and his wife, who also acted as guarantor, state that on various occasions they have been involved in commercial activities related to minerals, Advance Material Trading Pte Ltd provided funds to Gisande Trading Ltd to purchase minerals and export them to Singapore. However, it was discovered that Gisande Trading Ltd had breached the agreement, and as a result, the Managing Director and the guarantor mortgaged their immovable properties to secure the payment because they owed a significant loan to Advance Material Trading Pte Ltd. While Advance Material Trading Pte Ltd was in the process of registering the mortgage, it was surprised to discover that the caveat was registered on some of the properties by Rwanda Revenue Authority due to unpaid taxes. As a result, Advance Material Trading Pte Ltd filed a claim against Gisande Trading Ltd and its guarantor in the Commercial Court. It requests to the Court to order to the

respondent to return the mortgaged properties for securing the payment, reimbursing the remaining balance of the loan if the proceeds from the sale of the properties were insufficient to cover the entire loan amount, and to award various damages. Gisande Trading Ltd together with its Managing Director Niyigaba Ignace and Akingeneye Dally, raised an objection to the inadmissibility of the claim on the basis that the agreement between the parties included an arbitration clause stipulating that any conflict or dispute would be resolved through arbitration in London. On the merit of the case, they argued that the claim lacked merit because Advance Material Trading Pte Ltd failed to provide evidence to prove their claim. The Commercial Court adjudicated the case and held that the objection raised by Gisande Trading Ltd lacked merit. Regarding the merits of the case, the Court found that the claim filed by Advance Material Trading Pte Ltd was without merit. Advance Material Trading Pte Ltd lodged an appeal to the Commercial High Court which ruled that the appeal has merit and overturned the ruling of the appealed judgment. The Court ordered to Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally to immediately participate in the registration of the mortgage they provided to Advance Material Trading Pte Ltd in line with the loan and mortgage agreement they concluded. Gisande

Trading Ltd, Niyigaba Ignace and Akingeneye Dally lodged an appeal to the Court of Appeal, alleging that the Commercial High Court disregarded the agreement stated in the mortgage contract they entered into. They further argued that the Court erroneously ordered to them to pay damages while they did not breach the contract. They request the instant Court to rectify these errors and award them damages for being dragged into unnecessary lawsuits.

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In the interlocutory judgment, the Court found that the parties should provide further explanations on the required step for the lawful registration of the mortgages. It also requested that the parties should submit the titles of the properties furnished as mortgage in the agreement. Additionally, the Court requested Niyigaba Ignace to personally appear and provide clarification on the required explanations. Gisande Trading Ltd argued that the properties mentioned in Exhibit A, which were provided as mortgage by Niyigaba Ignace and Akingeneye Dally, are still under the possession of Advance Material Trading Pte Ltd. They also stated that conferred to Advance Material Trading Pte Ltd the power of attorney to register the mortgage in case the mortgagors are not available. It states that, according to the contract, Advance Material Trading Pte Ltd accepted to provide to it the funds, him and his wife accepted to mortgage their property once the agreed-upon funds were received, but as the loan was not granted, the mortgage was not recorded, resulting in a suspension of the intended transactions. Advance Material Trading Pte Ltd argues that Akingeneye Dally and Niyigaba Ignace breached the contract by transferring the mortgaged property to another person, it was impossible to register the mortgage which was no longer recorded on the mortgagors. Gisande Trading Ltd and its guarantors

assert that they requested the Commercial High Court to dismiss the appeal lodged by Advance Material Trading Pte Ltd concerning the payment of the remaining balance of the loan, in the event that the mortgage is sold, because it did not file a claim for the payment of the loan. They further contend that no loan was established in the appealed decision of the Commercial High Court, Advance Material Trading Pte Ltd requested for the registration of mortgages in the names of the mortgagors, with the purpose of securing the payment. AMT Ltd wrote to the President of the Supreme Court, requesting a review of the judgment RCOMAA 00091/2020/CA rendered by the Court of Appeal on the grounds of injustice. The reason cited for this request is that the Court of Appeal failed to acknowledge that, from the beginning, Gisande Trading Ltd and its guarantors did not raise any objection about the execution of the loan agreement they entered into, it requests the instant Court to order the deregistration of the furnished mortgages at the time of the conclusion of the loan agreement and to have them re- registered in the names of the mortgagors. Held: The mortgagor cannot dispose off the mortgaged property which was registered in his/her names without written approval. Appeal with merit. Court fee is borne to the applicant. Statute and statutory instrument referred to: Law n° 10/2009 of 14/05/2009 on mortgages, article 4. No case referred to.

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Judgment

BACKGROUND OF THE CASE [1] The case was initially filed in the Commercial Court on RCOM 01669/2019/TC, AMT Ltd sued Gisande Trading Ltd, Niyigaba Ignace and his wife Akingeneye Dally, providing the following explanations: - On several occasions, AMT Ltd entered into undertakings with Gisande Trading Ltd, represented by Niyigaba Ignace, for the mineral business of Tin and Tantalium. This was indicated by the agreement concluded on 25/05/2018, wherein AMT Ltd provided funds to Gisande Trading Ltd, and the latter would purchase and export the minerals to Singapore; - Later, AMT Ltd realized that Gisande Trading Ltd owed to it a huge loan, raising doubts about the repayment. To address the issue, AMT Ltd reached an agreement with the Managing Director of Gisande Trading Ltd to conclude a new loan and mortgage agreement, it requested information about the properties that could serve as mortgage, on 7/11/2018, the National Land Authority indicated that the properties in question are registered in the names of Niyigaba Ignace and his wife, Akingeneye Dally. On 24/12/2018, they signed the loan and mortgage agreement, in which they acknowledged that the outstanding loan amount owed by Gisande Trading Ltd to them totaled 5,380,456 USD. This amount comprised 4,680,456 USD from the existing loan and an additional 700,000 USD from the loan addendum. In that agreement, Niyigaba Ignace and Akingeneye Dally also undertook to guarantee the loan owed by Gisande Trading Ltd to AMT Ltd by providing a mortgage over their personal properties, consisting of three houses and a school premises located in Kayonza District.

- The undertakings between both parties continued, but Gisande Trading Ltd breached its obligation to deliver minerals amounting to the agreed sum of money. It only exported minerals equivalent to 700,000 USD, as evidenced by the invoices (shipment remittances) dated 11/12/2018 and 20/12/2018. Furthermore, Gisande Trading Ltd made a payment of 680,456 USD, resulting in an outstanding loan balance of 4.7 million USD, since 2019, Gisande Trading Ltd has not sent any minerals to AMT Ltd. - While AMT Ltd was still in the process of registering the mortgage, it was surprised to discover that the caveat was registered on some of the properties by Rwanda Revenue Authority for tax purposes, the school was registered in the names of Niyigaba Ignace and his wife Akingeneye Dally as their personal property at the time of signing the agreement, it wa recorded in the name of a company called International Technical School (ITS of Kigali Ltd), of which they held 100% shareholding, all of these factors hindered AMT Ltd from registering the mortgage as agreed upon in the contract. - After realizing that Gisande Trading Ltd had breached the contract by failing to export the minerals of which the value is equivalent to the loan amount granted or to make the necessary payments, and that its guarantors had also not fulfilled their obligations under the mortgage contract, AMT Ltd sent them a notice letter on 15/05/2019. However, they took no action in response to the notice. Subsequently, on 09/08/2019, AMT Ltd

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decided to refer the case to the court for the contract execution. In doing so, AMT Ltd requested that the respondents should be ordered to record afresh the school with UPI: 1/02/11/02/229 in their names, and also to register it with RDB as a mortgage to guarantee the payment of the loan owed by Gisande Trading Ltd. Additionally, AMT Ltd sought an order that the respondents should be required to pay the outstanding loan in the event that the proceeds from the mortgage sale do not cover the entire loan amount. [2] Gisande Trading Ltd and its guarantors raised an objection of inadmissibility of the claim, alleging that in the contract of 25/05/2018, both parties agreed that any dispute that might arise should be referred to arbitration in London, England. Regarding the merits of the case, they pleaded by stating that the claim lacks merit because AMT Ltd has not demonstrated the fault they allegedly committed because it signed the mortgage agreement on 24/12/2018 having the information about the properties provided as mortgages and no changes were made to those properties. [3] The Commercial Court adjudicated the case RCOM 01669/2019/TC on 31/10/2019. Regarding the objection, it decided that it was inadmissible because the agreement signed by the parties on 25/05/2018 is not the subject matter of the case. Instead, the agreement they concluded on 24/12/2018 clearly states that

in the event of any dispute that cannot be resolved amicably, it may be referred to the courts in Rwanda. Regarding the merits of the case, the Court decided that the claim of AMT Ltd lacks merit and ordered to it to pay Gisande Trading Ltd counsel and procedural fees amounting to 600,000 Frw. [4] While reaching that decision, the Court clarified that it would not order that the property should be registered afresh in the names of the mortgagors because AMT Ltd negligently failed to promptly register them with the competent authority. Furthermore, there was no indication that AMT Ltd initiated the caveat registration against the land transfer after being informed about the persons registered on the properties by the National Land Authority in November 2018 and concluding the agreement with the respondents in December 2018 for stating that there were errors committed by an organ that effected the transfer, notwithstanding the caveat. [5] AMT Ltd appealed to the Commercial High Court, arguing that the fact that the Commercial Court did not decide that the property with UPI: 1/02/11/02/229 should be deregistered from ITS Kigali Ltd for being registered afresh on Niyigaba Ignace and his wife Akingeneye Dally and recorded in RDB as mortgage, is contrary to the agreement concluded on 24/12/2018, it criticizes the Commercial Court for remaining silent on their requests to decide

that if the proceeds from the mortgage sale do not cover the payment of the entire loan, the respondents should be ordered to pay the outstanding loan. [6] The Commercial High Court adjudicated the case RCOMA 00946/2019/HCC on 08/10/2020 and held that the appeal of AMT Ltd has merit. As a result, the ruling of the appealed judgment was reversed. The Court ordered to Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally to jointly participate in the registration of the mortgages they provided to AMT Ltd in the loan and mortgage agreement they entered into on 24/12/2018. If necessary, the names of the property owners should be modified to allow such mortgages to be properly registered. Furthermore, in the event that the mortgages do not cover the full payment of the loan owed to

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AMT Ltd, the outstanding loan should be paid by Gisande Trading Ltd and Niyigaba Ignace. It also ordered to Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally to jointly pay to AMT Ltd counsel and procedural fees amounting to 3,500,000 Frw at the first instance and 1,500,000 Frw at the appeal level, the total is 5,000,000 Frw. [7] The Court clarified that the elements of evidence including the correspondences from the Registrar of Land titles addressed to Counsel Rwigamba Molly (Counsel for AMT Ltd) on 07/11/2018 and on 10/06/2019, indicate that the information given to AMT Ltd regarding the property with UPI: 1/02/11/02/229 was modified after 24/12/2018 when the parties signed the agreement. The first letter indicated that the property was registered in the names of Niyigaba Ignace, whereas the second letter indicated that it was registered under ITS of Kigali Ltd. This discrepancy clearly demonstrates that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally did not comply with the terms of the mortgage agreement they concluded with AMT Ltd. It concluded that based on the agreements of the parties in the contract and articles 64 and 65 of Law Nº 45/2011 of 25/11/2011 governing contracts, the respondents are ordered to register the mortgage as agreed with AMT Ltd. This is especially important since ITS of Kigali Ltd, on which the property with UPI: 1/02/11/02/229

is registered, belongs to Niyigaba Ignace and Akingeneye Dally with 100% shareholding, as demonstrated by the document titled "Full Registration Information of Domestic Company" issued by RDB on 09/10/2018. [8] Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally appealed to the Court of Appeal, arguing that the Commercial High Court disregarded the following: - the fact that the properties provided by Niyigaba Ignace and Akingeneye Dally as mortgages are listed in Exhibit A of the mortgage agreement they concluded. These properties are still in their possession, and they failed to take any action to fulfill their obligations as stated in clause 3, subparagraphs 31 and 212 of the mortgage agreement dated 24/12/2018 that they entered into with AMT Ltd. - The fact that AMT Ltd did not indicate that there had been changes on the mortgages received, if there were sold or mortgaged to another by Niyigaba Ignace, or that it attempted and failed to register the mortgages received, especially it was conferred the power of attorney for the mortgage registration in case the mortgagors are not available. - The fact that the ITS of Kigali Ltd belongs to the mortgagors implies that the property is still under their ownership, and nothing is therefore likely to prevent AMT Ltd from cooperating with them for the registration of the mortgage. - The fact that AMT Ltd did not file a claim for payment of the loan seeking a related decision and it does not allege that the mortgages cannot be used for payment in case they are not recorded in RDB and in case they are not sold for the purpose of indicating the remaining loan for which a claim would be filed, as mentioned in subparagraph 20 of the mortgage agreement dated 24/12/2018;

1 The Loanor and the Guarantor agree not to mortage or sell property described in Exhibit A and any developments thereon, to any entity whatsoever without the knowledge and written consent from the Creditor. 2 The Collateral as described in Exhibit A and any future developments thereon shall remain the Creditor security up to the total reimbursement of the facility.

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- The fact that Gisande Trading Ltd indicated that it did not discontinue making payments as evidenced by the correspondence addressed to it by AMT Ltd on 18/02/2020, which shows that the loan owed amounts to 3,772,064.15 USD, this contradicts the content of the claim filed by AMT Ltd, where it states that Gisande Trading Ltd owes a loan amounting to 4,7 million USD. [9] These grounds of appeal have been the subject of debate in the hearing of 28/06/2021, but when the hearing was resumed on 11/10/2021, Niyigaba Ignace appeared in person as ordered by the Court. He stated that the mortgage was not registered because AMT Ltd breached the contract. He explained that Gisande Trading Ltd incurred losses due to the fall in mineral prices and the problem of mineral theft. He also mentioned that they concluded another contract with AMT Ltd on 24/12/2018, in which each party made certain commitments. On the side of AMT Ltd, it had the obligation to continue helping Gisande Trading Ltd by providing it with money, while Niyigaba Ignace and his wife would provide mortgage over their property once Gisande Trading Ltd received the agreed-upon amount of money. However, the loan was not granted, this hindered the registration of the mortgage and ended the undertakings. He further argued that, for the registration of mortgage over the property, they first need to reach an agreement with AMT Ltd

to be granted the agreed-upon amount as per the contract. [10] In the case RCOMA 00091/2020/CA rendered on 05/11/2021, the Court of Appeal declared that the appeal filed by Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally has merit. As a result, the Court ordered to AMT Ltd to pay to the appellants 1,500,000 Frw as counsel fee for all levels and 50,000 Frw as court fee. [11] The Court of Appeal made its decision based on the following reasons:  Niyigaba Ignace and Akingeneye Dally should not have been ordered to get the mortgage registered as agreed with AMT Ltd, especially since AMT Ltd did not fulfill its obligation to release the accepted loan amounting to 700,000 USD, in addition to the existing loan of 4,680,456 USD. Furthermore, AMT Ltd has not demonstrated what actions were taken to preserve the good collaboration, considering the agreements they made that AMT Ltd would continue to support Gisande Trading Ltd as before by providing it with money according to the prevailing situation.  The property registered under UPI: 1/02/11/02/229, which was initially registered in the names of Niyigaba Ignace and Akingeneye Dally at the time of the conclusion of the mortgage contract, is to date registered in the names of ITS of Kigali Ltd. There is no basis upon which the Court could rely to order for its deregistration from that school and its registration in the names

of the persons to whom it was originally registered and that school was not sued in the instant case.  Regarding the loan, AMT Ltd's loan is not secured with mortgages to date because it did not register them. Therefore, it should not consider selling the mortgages it does not have. While no claim was initiated regarding the amount of the loan, and no decision over it has been made, the Court has no basis to order to Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally to pay unspecified loan.

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[12] On 20/11/2021, AMT Ltd, represented by Counsel Rwigamba Molly, wrote to the President of the Supreme Court, requesting the review of the judgment RCOMAA 00091/2020/CA rendered by the Court of Appeal on 05/11/2021 on the grounds of injustice. After assessing that application, in the order No. 034/CJ/2022 of 25/02/2022, the President of the Supreme Court decided to transfer the case to the Supreme Court registry for record and adjudication. It was given the docket number RS/INJUST/RCOM 00004/2022/SC. [13] The case was heard for the first time on 14/06/2022, the Court noted that AMT Ltd was represented by Counsel Rwigamba Molly and Counsel Dushimimana Reuben. On the other hand, Niyigaba Ignace and Akingeneye Dally were represented by Counsel Hakizimana François Xavier. The counsel for AMT Ltd informed the Court that among the properties stated in the contract that AMT Ltd concluded with the respondents, the disputed property for which it requests that a related decision should be taken is registered in the names of ITS of Kigali Ltd. On that day, the hearing was not closed to allow for the forced intervention of that school in the case. The Court also ordered that no transfer of ownership should be executed again over that property until the judgment pronouncement. [14] The hearing was resumed on 12/10/2022, with AMT Ltd, Gisande Trading Ltd, Niyigaba Ignace, and Akingeneye

Dally represented as before. ITS of Kigali Ltd was represented by Counsel Karenzi Jean Paul. The latter informed the Court that such company is no longer registered under Niyigaba Ignace and his wife Akingeneye Dally; instead, it is now registered under Ingabire Jeannine since 11/02/2022, as indicated by the document titled "Full Registration Information of Domestic Company" issued by RDB. They also mentioned that the disputed property was provided as a mortgage to KCB Bank Rwanda Plc, currently BPR Bank Plc. Based on that information, the legal counsel for AMT Ltd requested that BPR Bank Plc should intervene in the case. Following the arguments of the other parties regarding that request, the Court adjourned the hearing for the purpose of BPR Bank Plc intervention in the case. [15] The hearing was resumed on 13/12/2022, with AMT Ltd, Gisande Trading Ltd, and Akingeneye Dally being represented as before, while ITS of Kigali Ltd was also represented as before. BPR Bank Plc was represented by Counsel Buzayire Angèle. [16] Considering the submissions of ITS of Kigali Ltd and BPR Bank Plc uploaded in the system, they request mainly not to be considered parties to the case, as they believe that being forced to intervene in the case for the first time at the Supreme Court instance violates the article 116 of Law N° 22/2018 of 29/04/2018 relating to the civil, commercial, labour and

administrative procedure, the Court recalled that the decision over their intervention has already been made. The position on the matter regarding the intervention in cases tainted with injustice had already been adopted in various cases. [17] The hearing proceeded to consider the merits of the case by determining the following issues: 1. Whether the property registered under UPI: 1/02/11/02/229 should be deregistered from ITS of Kigali Ltd and registered afresh in the names of Niyigaba Ignace and Akingeneye Dally, in order to be recorded as mortgage in favor of AMT Ltd;

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2. Whether the respondents should be ordered to pay the remaining loan if the proceeds of the mortgage do not cover the payment of the entire loan. 3 Damages sought in this case.

II. ANALYSIS OF LEGAL ISSUES A. Whether the property registered under UPI: 1/02/11/02/229 should be deregistered from ITS of Kigali Ltd and registered afresh in the names of Niyigaba Ignace and Akingeneye Dally, in order to be recorded as mortgage in favor of AMT Ltd [18] Counsel Rwigamba Molly and Counsel Dushimimana Reuben argue that the Court of Appeal decided that AMT Ltd, which they represent, breached the contract it concluded with Gisande Trading Ltd on 24/12/2018 for granting it an addendum loan of 700,000 USD. The Court based this decision solely on the untrue statements made by Niyigaba Ignace during the hearing on 11/10/2021 when he was ordered to appear in person, and explained that they intentionally concealed the property registered under UPI: 1/02/11/02/229 because AMT Ltd failed to provide them with the additional loan as previously agreed. [19] They state that the Court of Appeal adopted this position while disregarding the fact that, from the first instance, Gisande Trading Ltd and its guarantors did not criticize AMT Ltd regarding the execution of the loan agreement they concluded. Instead, they alleged that AMT Ltd's claim lacks merit because it does not indicate any changes over the properties they provided as mortgage following the contract they concluded. Furthermore, they argue that AMT Ltd attempted and failed to register the mortgage, as it was

conferred the power of attorney for mortgage registration in case the mortgagors were not available. [20] They further state that the Court of Appeal disregarded the elements of evidence in the file proving that on 11/12/2018, AMT Ltd paid 400,000 USD, and on 20/12/2018, it paid 300,000 USD, totaling 700,000 USD. They explain that the reason for the conclusion of the agreement on 24/12/2018 is that AMT Ltd used to provide Gisande Trading Ltd with US dollars to buy minerals on its behalf for a long time, but it failed to fulfil its obligations. This led to a reevaluation of the transactions, and as a result, they agreed that AMT Ltd would grant an additional amount of 700,000 USD, the total owed loan is 4,680,456 USD. AMT Ltd signed the new agreement in Singapore on 6/12/2018, and Gisande Trading Ltd and its guarantors signed it on 24/12/2018 in the presence of a notary public in Rwanda, as they had to sign it after being granted that additional loan of 700,000 USD. [21] They also state that the loan and mortgage agreement of 24/12/2018 deserves to be interpreted in conjunction with the prior agreement of 25/05/2018, which relates to the commercial

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transactions of minerals they used to carry out together. In this prior agreement, AMT Ltd used to provide Gisande Trading Ltd with money, and in turn, the latter used to buy and export the minerals to Singapore. This is the reason why, in the preamble of the agreement, it was stated that Gisande Trading Ltd still owes to AMT Ltd the loan amounting to 4,680,000 USD. This suggests that the mortgages stated in this agreement were meant to secure such an existing loan, along with the new loan amounting to 700,000 USD. [22] Regarding the arguments of Gisande Trading Ltd and its guarantors from the first instance, claiming that AMT does not indicate the fault they committed because it was given the power of attorney, they allege that, despite being given that power, it was hindered by the fact that the title deeds it was handed were photocopies, while the registration of the mortgage requires the presentation of original documents. They further state that the confession made by Niyigaba Ignace before the High Court, admitting that they concealed the mortgages, constitutes evidence proving that the failure to register the mortgages is not their fault, but rather the fault of him and his wife. [23] They also argue that from the signature of the loan and mortgage agreement on 24/12/2018 to the date of registration of the properties to ITS of Kigali Ltd on 19/03/2019, there is a period

of three months, AMT Ltd would not have anticipated that Niyigaba Ignace, with whom they have undertaken transactions and trusted each other, would immediately dispose of the property so that it would apply for the caveat registration on the property just after the signing of the agreement, especially that Niyigaba Ignace alleged that he was absent as he was travelling. They further argue that when it was realized that the properties were no longer registered in the names of Niyigaba Ignace and Akingeneye Dally, AMT Ltd immediately filed a claim and requested that the properties should be registered afresh in their names so as to be recorded in RDB as mortgage. [24] Counsel Rwigamba Molly and Counsel Dushimimana Reuben argue that there is injustice in the judgment RCOMAA 00091/2020/CA based on the Court of Appeal noted that the disputed property was indeed registered under the names of Niyigaba Ignace and Akingeneye Dally at the time of the mortgage agreement, but it disregarded this registration and ruled that the parties were not obliged to fulfill the terms of the contract they had entered into by registering afresh the property in their names which should be recorded in Rwanda Development Board (RDB) as mortgage in favor of AMT Ltd, on the pretext that the school ITS of Kigali Ltd on which the property is registered was not a party to the ongoing lawsuit. [25] They argue

that the Court of Appeal so ruled by disregarding the fact that the acts of Niyigaba Ignace and Akingeneye Dally breach the agreement and violate Article 64 of Law N°45/2011 of 25/11/2011 governing contracts, and Article 7 of Law N°10/2009 of 14/05/2009 on mortgages. Additionally, they point out that the Court did not consider the position adopted by the Supreme Court in the case RCOMAA 0008/14/CS rendered on 22/07/2016 between Mujawimana Rose and others vs. Bank of Kigali. In paragraph 17 of that ruling, the Supreme Court held that when a mortgage agreement is concluded in accordance with the law, it binds the parties and cannot be invalidated even if the mortgage is not recorded. [26] They argue that when Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally won the case before the Court of Appeal, they sought the cancellation of the caveat lodged by AMT Ltd over the property in dispute, upon realizing that the application for review due to injustice was

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filed on 03/03/2022, they hurriedly went to KCB Bank Rwanda Plc, currently BPR Bank Plc, and on 14/03/2022 they mortgaged the concerned property for the loan application on behalf of their school, ITS of Kigali Ltd, they sought another shareholder to whom they registered that school to indicate that it does not belong to them, all these facts are indicative of fraud committed by Niyigaba Ignace and Akingeneye Dally. [27] They argue that the transfer of the property to ITS of Kigali Ltd by Niyigaba Ignace and Akingeneye Dally could be considered as transferring stolen property. Therefore, they assert that any transfer made over the property with UPI: 1/02/11/02/229 after the contract was signed on 24/12/2018, as well as any other mortgage provided to BPR Bank Plc, should be invalidated. They propose that the property should be registered afresh in the names of Niyigaba Ignace and Akingeneye Dally and recorded as mortgage in RDB for AMT Ltd. [28] Counsel Hakizimana François Xavier, representing Gisande Trading Ltd, Niyigaba Ignace, and Akingeneye Dally, states that the 700,000 USD, as stated by the legal counsel for AMT Ltd, were granted in the context of executing the agreement dated 25/05/2018. According to this agreement, Gisande Trading Ltd should be provided with dollars for the purchase of minerals, and the value of each supplied batch of minerals would be subtracted from

the loan until full reimbursement. Therefore, these dollars were not granted to comply with the agreement of 24/12/2018, as the latter was not yet concluded, and they would not be granted before the conclusion of the agreement. [29] When he was asked how he reconciled the dollars transferred to Gisande Trading Ltd on 11/12/2018 and on 20/12/2018 with the clauses of the agreement dated 25/05/2018, he stated that the said agreement was intended to revise the one of 08/01/2017, under which 700,000 USD were granted. [30] He further states that there is other agreement they concluded later on 01/04/2019, in which they agreed on another way of collaboration and how percentages would be shared over the supplied minerals. However, this agreement was not respected, and that is the reason why Niyigaba Ignace, after realizing that Gisande Trading Ltd fell short of money, sold the mortgage with the consent of AMT Ltd. [31] Regarding the arguments of the legal counsel for AMT Ltd that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally breached the mortgage agreement they entered into, he argues that in article 3, subparagraph 19 of such contract, they recorded that both parties shall jointly participate in the registration of the mortgage, but that, in the event that the mortgagors are not available, the mortgagee has the power of attorney to do so on their behalf. Therefore, AMT Ltd

cannot allege that Niyigaba Ignace was not available for the registration of the mortgage when he was entrusted with the right to do so. [32] In contrast, regarding the statements of AMT Ltd that when they took a step for registration of the mortgage over the property given as a mortgage, they realized that it was no longer registered in the names of Niyigaba Ignace and Akingeneye Dally, as it was instead registered under ITS of Kigali Ltd, he argues that this change occurred after the courts had discharged them of the duty of registration of the mortgage.

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[33] Counsel Karenzi Jean Paul states that the ITS of Kigali Ltd School, which he represents, was purchased by Ingabire Jeannine on 11/02/2022, as indicated by the document issued by RDB and included in the file. She bought the school along with all its assets, including the property with UPI: 1/02/11/02/229. At the time of purchase, she verified that the sellers legally owned it, and there were no other problems, such as being under caveat or mortgaged. Subsequently, on 11/03/2022, the school provided the property as a mortgage to be granted a loan by KCB Bank Rwanda Plc, currently BPR Bank Plc. The mortgage has been duly registered with RDB. [34] He states that ITS of Kigali Ltd owns the property with good faith, and any other agreement over it would bind the contracting parties. In case of any breach, Niyigaba Ignace, Akingeneye Dally and Gisande Trading Ltd should be held liable for their respective obligations, while Advanced Material Trading Pte Ltd should be accountable for its own obligations. [35] Counsel Buzayire Angèle, representing BPR Bank Plc, argues AMT Ltd does not have any guarantee to date because it did not register it. The mortgages stated in the agreement it concluded with Gisande Trading Ltd and its guarantors would have been valid if they were recorded to comply with article 4 of the Law n° 10/2009 of 04/05/2009 on mortgages, which states that “a mortgage

is considered valid when recorded in the mortgage register in the office of the Registrar General”. [36] She states that the arguments made by AMT Ltd, claiming to have lost the original land title in order to register the mortgage, should not be considered. This is because they could have relied on Article 213 of Law N° 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedures providing that “any creditor or interested party may submit a request to the Registrar of land titles or to the officer in charge of land in the Sector or the District in the area where the property is located in order to prevent any transfer of the immovable property belonging to the loanor.” AMT Ltd also had the option to lodge a caveat against the transfer of the property that was provided as mortgage and subsequently file a claim to request the respect of the mortgage contract, as per that provision. The fact that they did not take these actions leads to the conclusion that the mortgage contract no longer exists, and the only valid contract is the mortgage agreement. Consequently, AMT Ltd would be considered an unsecured creditor. [37] She also argues that BPR Bank Plc did not commit any fault or fraud during the registration of the mortgage. Moreover, since this Bank complied with the requirements of the Law on mortgages before granting the loan to ITS of Kigali Ltd, it cannot be deprived of its rights when it acted in accordance with the law.

DETERMINATION OF THE COURT i. Regarding the statements of AMT Ltd that it respected the agreement concluded with Gisande Trading Ltd and its guarantors [38] Before determining whether the property registered on UPI 1/02/11/02/229 should be registered afresh in the names of Niyigaba Ignace and Akingeneye Dally in order to get recorded in the mortgage register of the office of the Registrar General in RDB as mortgage given to AMT Ltd, it must first be examined whether, as decided by the Court of Appeal, AMT Ltd breached its obligations relating to the grant of additional loan stated in the agreement of 24/12/2018. If it is

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found that such a breach occurred, then AMT Ltd would not be entitled to request that Gisande Trading Ltd and its guarantors should be ordered to execute their obligations relating to the mortgages they agreed to provide under this agreement. [39] This issue shall be examined on the basis of the provisions of article 9 of the Law N° 15/2004 of 12/06/2004 relating to evidence and its production reading that “An evidence (…) can be established by a written document, testimony, presumption or circumstantial evidence, admission of a party or any other material evidence”, as well as article 12 of the Law Nº 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedure, stating that “the claimant must prove a claim, failing which the respondent wins the case. Likewise, a party who alleges that he/she has been discharged from an obligation established by evidence must justify the cause as a result of which the obligation has extinguished. Failure to do so, the other party wins the case”. [40] The Court observes that the case file of the Commercial High Court includes two documents, called payment details, indicating that on 11/12/2018, AMT Ltd transferred 400,000 USD to Gisande Trading Ltd, and again on 20/12/2018, an additional 300,000 USD was sent, making the total transfer 700,000 USD. These are the documents on which AMT Ltd relies to argue that it

granted to Gisande Trading Ltd an additional loan, as stated in the agreement they concluded. However, Gisande Trading Ltd and its guarantors retort that those dollars were not paid in the context of the execution of the agreement of 24/12/2018. They claim that the payments were instead made to fulfill the terms of the agreement dated 08/01/2017, which was later amended by the agreement of 25/05/2018. According to them, the additional loan of 700,000 USD would not have been granted before the conclusion of the agreement on 24/12/2018. [41] The Court finds that the loan and mortgage agreement concluded between the parties on 24/12/2018 does not contain any clause proving that there is a loan that AMT Ltd should pay to Gisande Trading Ltd. The agreement only states that AMT Ltd should do its best to maintain good collaboration between them. The parties who concluded that agreement instead concur that Gisande Trading Ltd owes AMT Ltd the loan amounting to 5,380,456 USD, comprising 4,680,456 USD of the loan it previously owed and 700,000 USD of the additional loan. All of these are indications that they concluded the agreement when Gisande Trading had received the additional loan. The statements made by Gisande Trading and its guarantors that the loan would not be granted before the conclusion of the contract should not be given any merit. The same applies to the allegations that

the 700,000 USD were sent in the context of the execution of the agreement of 8/1/2017, amended by the agreement of 25/05/2018, because they merely assert this without demonstrating how they reconcile these agreements with the dollars transferred on 11/12/2018 and 20/12/2018. [42] The Court also finds that considering the pleadings and court submissions of Gisande Trading Ltd and its legal counsel from the first instance until they lodged an appeal to the Court of Appeal, and during the pleading before that Court on 28/06/2021, it is evident that they did not criticize AMT Ltd regarding the execution of the agreement they concluded on 24/12/2018. Instead, they only alleged that AMT Ltd failed to point out the faults they committed, which led to the failure of registering the mortgage they provided to it in RDB. This also leads to the understanding that the statements they made for the first time during the hearing on 11/10/2021

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before the Court of Appeal, when the hearing was resumed, claiming that AMT Ltd did not grant the additional loan as agreed in the contract, are not true. [43] Basing on the produced elements of evidence, the Court finds that AMT Ltd respected the contract it concluded with Gisande Trading Ltd and its guarantors for granting an additional loan of 700,000 USD. Therefore, the Court of Appeal based its decision on a non-existent reason when it held that Niyigaba Ignace and Akingeneye Dally would not be ordered to register the mortgage they promised to AMT Ltd as long as AMT Ltd does not also fulfill its obligation of granting the loan as agreed.

ii. Whether the property registered under UPI: 1/02/11/02/229 should be deregistered from ITS of Kigali Ltd and registered afresh in the names of Niyigaba Ignace and Akingeneye Dally in order to be registered as mortgage in favor of AMT Ltd [44] Article 147 of the Law nº 45/2011 of 25/11/2011 governing contracts, in its first paragraph, provides that “the court may order a party who has breached or is about to breach the contract to perform contractual obligations.” [45] Regarding the statements of Gisande Trading Ltd and its guarantors that AMT Ltd was entrusted with the full right to register the mortgage and, therefore, should not allege that they did not fulfill their obligations, the Court finds that this amounts to disregard the correspondences from the National Land Authority dated 07/11/2018 and 10/06/2019, which were mentioned earlier. These correspondences indicate that the information given to AMT Ltd about the property with UPI: 1/02/11/02/229 was modified after the conclusion of the contract on 24/12/2018 by the parties. The first correspondence indicated that the property was registered under Niyigaba Ignace, while the second indicated that it was registered under ITS of Kigali Ltd. Moreover, the Court also takes into account the email written by that company on 22/08/2022, which is filed in the case file at this instance and it confirms that the property with

UPI: 1/02/11/02/229 got registered under ITS of Kigali Ltd on 19/03/2019. Niyigaba Ignace and Akingeneye Dally's acts of deregistering the property and transferring it to ITS of Kigali Ltd before even three-month time elapsed since the conclusion of the loan and mortgage contract suggest that they are responsible for the failure to register the mortgage. [46] Regarding the statements of Gisande Trading Ltd and its guarantors that they sold the mortgage in agreement with AMT Ltd, the Court finds that these statements should not be considered as true since they are not supported by evidence, they are contradiced by Niyigaba Ignace's statements before the Court of Appeal that they refused to provide the mortgage because AMT Ltd did not fulfill its promise to grant the loan while this is not true because, as above explained, the agreement was signed while Gisande Trading Ltd had already provided it. [47] Regarding the statements by the counsel of BPR Bank Plc that AMT Ltd is devoid of mortgage over the property with UPI: 1/02/11/02/229 because it is not recorded in the register of the Registrar General in RDB, the Court finds that the subject matter in this case is not to determine whether the unregistered mortgage is valid. Instead, the subject matter regards the execution of the mortgage contract that was supposed to be provided by Niyigaba Ignace and his wife Akingeneye Dally to secure the payment of the loan owed by Gisande Trading Ltd to AMT Ltd.

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[48] Furthermore, regarding the arguments made that the mortgage no longer exists because AMT Ltd did not lodge a caveat on the transfer of the property that was provided as mortgage and is to date not registered to the persons with whom they entered into the contract, the Court finds them groundless. As pointed out above, the failure to register the mortgage was the fault of Niyigaba Ignace and Akingeneye Dally, who deregistered the property from their names when it should have been registered as mortgage for AMT Ltd in RDB. In constrast, the issue at hand is to determine whether the transfer of the property between Niyigaba Ignace and Akingeneye Dally and ITS of Kigali Ltd, should be considered valid, taking into account the text of the agreement they concluded with AMT Ltd. [49] In the agreement of 24/12/2018, Niyigaba Ignace and Akingeneye Dally committed to be guarantors for the loan owed by Gisande Trading to AMT Ltd by providing their own properties as mortgage, including the School located in Kayonza District. They also agreed that those properties would serve as mortgage for AMT Ltd until the full payment of the loan (article 2, the last sentence). It was specified that these properties should not be sold or used as a guarantee for any other person without the written approval of AMT Ltd (article 3.3). Additionally, Gisande Trading Ltd and its guarantors committed to

informing AMT Ltd of any changes that may occur concerning the attached property (article 3.17) and to undertake all necessary processes for the registration of these properties as mortgage provided to AMT Ltd (article 3.19). [50] Basing on the mortgage contract that Niyigaba Ignace and Akingeneye Dally concluded with AMT Ltd, the Court finds that they had no right to deregister the property under UPI: 1/02/11/02/229 from their names without the written authorization from AMT Ltd and without informing them. [51] The Court further finds that the haste with which Niyigaba Ignace and Akingeneye Dally deregistered the property from their names and registered it to ITS of Kigali Ltd School indicates that AMT Ltd could not exercise the power of attorney it was entrusted with to apply for mortgage registration in RDB. This perception is also evident in the statements made by Niyigaba Ignace before the Court of Appeal, where he mentioned that he declined to provide the mortgage because AMT Ltd refused to grant them an additional loan. He also stated that nothing would prevent the deregistration of the property under UPI: 1/02/11/02/229 from ITS of Kigali Ltd and its new registration under his and Akingeneye Dally's names, should AMT Ltd comply with the agreement they concluded. [52] The Court observes that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally concluded the loan and

mortgage contract with AMT Ltd. While AMT Ltd complied with its obligations from this contract, on the other hand, they took all possible actions to hinder the execution of the contract regarding their obligations as guarantors. This behavior implies that their attitude and actions during the execution of the contract were characterized by bad faith, which amounts to a violation of the law governing contracts, as stated above that reads that Contracts made in accordance with the law shall be binding between parties [....]. They shall be performed in good faith (article 64). A contract shall not only cover the subject matter but also the effects that equity, practices or law impute to the obligations according to the nature of the contract (article 65). Each party shall have obligation to perfom the contract in good faith and fair dealing between parties (article 70).

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[53] The Court deems that, for compelling the respondentd to respect the contract they concluded with AMT Ltd, the property registered under UPI: 1/02/11/02/229 should be deregistered from ITS of Kigali Ltd School and registered afresh in the names of Niyigaba Ignace and Akingeneye Dally. This step is necessary to facilitate the registration of the mortgage for AMT Ltd since they deregistered the property in breach of the agreement they had with AMT Ltd. Article 147 of the law governing contracts, as stated above, empowers the court to order a party who has breached or is about to breach the contract to perform their contractual obligations. [54] Regarding other agreements concluded in relation to the property under UPI: 1/02/11/02/229 subsequently to the trial of the case N° RCOMA 00091/2020/CA, the Court deems that since the decisions taken in that judgment are quashed and the status quo is restored, such contracts are invalid with respect to the execution of the loan and mortgage agreement that Gisande Trading Ltd, Niyigaba Ignace, and Akingeneye Dally concluded with AMT Ltd. b. Whether the respondents should be ordered to pay the outstanding loan if the proceeds of the mortgage do not cover the payment of the entire loan [55] Counsel Rwigamba Molly and Counsel Dushimimana Reuben, representing AMT Ltd, argue that Gisande Trading Ltd owes their client a substantial amount of

dollars compared to the value of the mortgage it provided. Therefore, they request that in the event the proceeds from the registered and auctioned mortgages do not cover the entire loan, the respondents should be ordered to pay to AMT Ltd the remaining balance of dollars from other properties owned by Gisande Trading Ltd and its guarantors instead of having to return to court to file a claim for the unpaid loan. [56] Regarding the holdings of the Court of Appeal that there is no basis to order to Gisande Trading Ltd to pay an undetermined loan, Counsel Rwigamba Molly argues that the Court should base its decision on the audit document present in the case file, signed by both parties, which indicates that on 28/01/2019, Gisande Trading Ltd owed to AMT Ltd a loan amounting to 3,994,409.95 USD (3,772,064 USD + 222,345.95 USD). [57] Counsel Hakizimana François Xavier, representing Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally, states that in this case, AMT Ltd has never filed for the loan. It only requested the Court to be paid the balance that would remain unpaid after the auction of the mortgage, which is impossible because the mortgages are not yet registered for being sold. Consequently, the Court has no basis to order to Gisande Trading Ltd and its guarantors to pay to AMT Ltd the unspecified amount of money. He further argues that the arguments by legal

counsel of the AMT Ltd that both parties agreed on the loan amount due to AMT Ltd, are false. He cites that on 18/02/2020, AMT Ltd wrote to Gisande Trading Ltd, informing it that the evaluated loan amount was 3,772,064 USD. The letter also requested confirmation from Gisande Trading Ltd if they concurred with the same. This suggests that the amount of the loan has never been agreed upon between the parties.

DETERMINATION OF THE COURT [58] As it is evident in the claim filed by AMT Ltd before the trial court and in its pleadings until this Court level that the subject matter of this case does not consist of ordering to Gisande

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Trading Ltd and its guarantors to pay the loan they owe to AMT Ltd. Instead, it consists of ordering to them to pay the potential balance of the unpaid loan in case the proceeds from the mortgage sale do not cover the entire amount of payment. [59] The Court further finds that no debates were held about the exact amount of the loan that Gisande Trading Ltd still has to pay to AMT Ltd during all previous tried cases to be likely subject to a decision for the first time at this court level. [60] Therefore, the Court finds that, as explained by the Court of Appeal, the respondents should not be ordered to pay the potential balance of the loan following the auction of the mortgage, as that potential balance is undetermined. Consequently, the claim filed by AMT Ltd lacks merit. C. Claimed damages [61] Counsel Rwigamba Molly and Counsel Dushimimana Reuben, representing AMT Ltd, state that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally breached the mortgage contract concluded with AMT Ltd and did not pay the loan they were granted. Instead, they unnecessarily dragged it into lawsuits. For this reason, they request that the respondents should pay 3,300,000 Frw of counsel and procedural fees to their client. [62] [Counsel Hakizimana François Xavier, representing Gisande Trading Ltd, Niyigaba Ignace, and Akingeneye Dally, retorts that the claimant should not be awarded the

requested damages because he himself opted for judicial remedy, and should, therefore, bear the consequences. He instead requests that AMT Ltd is the one that should pay them 2,000,000 Frw of counsel and procedural fees to each of them, the total being 6,000,000 Frw. [63] The legal counsel for AMT Ltd argues that the respondents are responsible for the disputes that led to the court case and AMT Ltd applied for a review because it suffered injustice. For this reason, it should not be held liable for damages. [64] Counsel Buzayire Angèle, representing BPR Bank Plc, requests that AMT Ltd which dragged it into unnecessary lawsuits, should be ordered to pay 3,000,000 Frw of procedural and counsel fees.

DETERMINATION OF THE COURT [65] Article 111 of the no 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedure reads that “The claim for representation fees is an incidental claim to the principal claim aiming to repay expenses incurred during judicial proceedings. The claim for legal costs is adjudicated at the same time with the principal claim [....]”. [66] The Court finds that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally should pay to AMT Ltd counsel and procedural fees because they breached the mortgage contract they concluded, and it was necessary for AMT Ltd to file the case to request the execution of the contract. The Court finds that the 3,300,000 Frw requested by AMT Ltd are reasonable, considering the four court instances the case went through since the beginning of the trial.

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[67] The Court also finds that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally should pay to BPR Bank Plc procedural and counsel fees. Although they did not request for its forced intervention, they are responsible for its intervention to avoid that the decisions to be taken would affect it while it has not been the party to the case. The awarded amount of 800,000 Frw is reasonable since they did not support the amount they requested with evidence. III. DECISION OF THE COURT [68] Finds the application for review of the judgment RCOMAA 0091/2020/CA rendered by the Court of Appeal on 05/11/2021 due to injustice, with merit in parts; [69] Orders the deregistration of the property with UPI: 1/02/11/02/229 located in Cyaruzinge Cell, Ndera Sector, Gasabo District, Kigali City from International Technical School of Kigali Ltd and be registered afresh in the names of Niyigaba Ignace and Akingeneye Dally; [70] Orders the deregistration of the property with UPI: 1/02/11/02/229 from BPR Bank Plc in the mortgage register in the office of the Registrar General of RDB, and be registered in the names of Advance Material Trading Pte Ltd; [71] Decides that Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally cannot be ordered to pay the potential balance of the loan in the event the proceeds of the mortgage sale do not cover cover the entire payment for the reasons mentioned above; [72] Orders to Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally to pay to Advance Material Trading Pte Ltd 3,300,000 Frw for counsel and procedural fees; [73] Orders to Gisande Trading Ltd, Niyigaba Ignace and Akingeneye Dally to pay to BPR Bank Plc 800,000 Frw for counsel and procedural fees.