City Lawyer Fred Muwema; Bank notes signed by the deceased Central Bank Governor Prof Mutebile are no longer legal tender.

On the 2nd February, 2022, Bank of Uganda issued a statement claiming that the death of Prof. Emmanuel Tumusiime Mutebile, (RIP) the former Governor, did not in any way affect the validity or legal status of the Bank notes he signed. This statement left me with second-hand embarrassment because it tried to oversimplify a complex legal issue without any legal basis. This statement needs to be open up for more scrutiny as it raised more questions than it answered. I think it was a material omission for the statement not to have recognized the vicarious trauma suffered by our Bank notes when they lost a critical signature to which they have owed their existence for the last 20 years. I don’t know why BOU would insist that Bank notes are still legal tender when their tenderability has obviously been voided by an absent signature.

Before we delve into this unprecedented question about the legal status of the bank notes he signed whilst in office, we must recognize that our late Governor is only beaten to the tape as the longest serving Governor in the world by Romanian Central Bank Governor Magur Isarescu who has been in office for more than 30 years. But I am almost certain that the former Governor is the only Governor to have died in office since financial historians can remember.

Whereas BOU acknowledged in the statement that a key design feature of the bank notes is the signature of the Governor, it did not explain how this signature survived the death of the Governor. The Bank of Uganda Act Cap 51 which grants the exclusive mandate to BOU to issue Bank notes which have to be signed by the Governor and Bank secretary as part of the legal authentication process, has no provision extending the validity period of any of the two signatures after the makers leave office.

 

One may wonder why contracts signed by the late Governor will remain valid and enforceable and yet questions are being raised about the validity of Bank notes he signed when he was still in office. My quick answer to that question is that a Bank note is not a contract, it is a distinct and sacred expression of a country’s sovereignty. That is why Bank notes are made as one original and it is an offence to copy the original.

As much as the late Governor’s signature on any BOU Contract he left behind will convey enforceable proprietary rights by and against the bank, the same signature on the Bank note can not convey or transfer any proprietary rights to the bank when the maker passes on. The Governor’s signature on the bank note is personal to holder and it ceases to exist when the maker ceases to exist. The late Governor’s signature cannot be maintained on the Bank note because doing so amounts to a false representation of his existence as Governor. It also misrepresents his appointment by the President and yet the appointment terminated automatically upon his death. It is odd that BOU appears to be usurping the powers of the President by purportedly re-appointing the late Governor as a posthumous signatory in his death.

 

My take is that BOU has no authority under the law to maintain the signature of a Governor or Bank secretary on a bank note, after any of them leaves office. If BOU cannot re-introduce bank notes previously signed by the former Governor, the late Charles Nyonyintono Kikonyogo or Bank notes signed by the former Bank secretary, George William Nyeko on account of their absence from office, why does it think that Bank notes previously signed by the late Governor can still be introduced in his absence as legal tender.

I would therefore argue that every Ugandan Bank note is a living legal instrument which remains alive for as long as it bears the valid signature of the person holding the office of the Governor and Bank secretary.Under the living instrument doctrine which was first articulated by the European Human Rights Court in Tyrer vs United Kingdom (1978), a living instrument includes treaties (and money in my view) which must be interpreted in light of the present-day conditions.

 

Using the living instrument doctrine to interpret the present-day condition of our bank notes, anyone can find that it bears no valid signature of the person of a Governor who is holding that office at this material time. I hasten to add though that the original issuance of the Bank notes with the signature of the late Governor was legal. However, the Bank notes as presently tendered in the public circulation are not legally issued because the late Governor’s signature which appears thereon, is now invalid.

BOU must realize that the former Governors signature was obtained in an electronic form before it was printed on the bank notes. This electronic signature is governed by the Electronic Signatures Act 2011 and is liable to be revoked upon the death of the maker under the provisions of S.69 of the Act. The Bank should therefore stop laying any further claims to the Governors revoked signature because no legal inheritance or survivorship attaches to the said signature under the law.

With respect, I would like to conclude by emphasizing that nobody owns a dead person in any legal sense. Dead people don’t have any notable legal rights except perhaps, the right to remain silent. BOU should leave the Good old Governor to rest in peace and instead take steps to systematically withdraw all Bank notes which bear his signature. At least BOU has a clear mandate under the law to withdraw Bank notes which have suffered an impaired legal status. At the same time, BOU should push for the appointment of a substantive Governor who can sign on new Bank notes. This is the permanent solution to this debacle.

Fred Muwema

Managing Partner

Muwema & Co. Advocates,

Director Legal & Corporate Affairs

Anti-Counterfeit Network Africa