The Commercial Division of the High Court in Kampala has issued a temporary order stopping Kenya Commercial Bank (Uganda) Limited (KCB) from selling the Kololo residence of the late Cedric Ndilima Babu as a legal battle over mortgage insurance unfolds.

The decision, delivered by Assistant Registrar Mulondo Mastula, grants an interim injunction in favour of Babu’s estate, effectively blocking the bank and its agents from advertising, auctioning, transferring, or taking possession of the property until the main case is heard and determined.

Babu, a well-known sports administrator and media personality, secured a mortgage facility reportedly worth about USD 200,000 in July 2023, using his Kololo home as collateral. Following his death, the bank initiated steps to recover the outstanding loan, prompting his family to challenge the move in court.

At the heart of the dispute is a mortgage protection insurance policy that was allegedly tied to the loan. Administrators of Babu’s estate argue that the outstanding balance should be cleared under the terms of the insurance cover in the event of the borrower’s death. They contend that the bank had a responsibility to ensure the policy remained active, particularly if the agreement required renewals to be handled through the bank’s bancassurance arrangement.

However, the bank maintains that the obligation to keep the insurance policy active rested with the borrower. According to its position, the policy lapsed before Babu’s death due to non-payment of premiums, leaving the loan unsecured and recoverable through sale of the mortgaged property.

In granting the interim order, the court noted that the matter raises substantial legal questions that warrant a full hearing. The judge observed that proceeding with the sale before resolving the dispute could cause irreversible harm to the deceased’s family, who continue to occupy the residence.

The ruling offers temporary relief to the estate but does not determine liability. The substantive suit will now proceed, with the court expected to examine whether the mortgage agreement imposed any duty on the bank to facilitate or enforce renewal of the insurance policy, and whether failure to do so affects its right to exercise the power of sale.

Until that determination is made, the Kololo property will remain protected from any recovery action by the lender.
The case has drawn public attention, given Babu’s prominence in Uganda’s sports and media circles, and is likely to shape how mortgage protection insurance clauses are interpreted in future lending disputes.