KAMPALA – The Supreme Court has dismissed with costs, an application by lawyers representing the Bank of Uganda (BoU) in which they sought to substitute the court record as the central bank appealed the Court of Appeal’s dismissal of their claims against city tycoon Sudhir Ruparelia.
The BoU filed the case through Crane Bank Limited (in Receivership) against Mr. Sudhir Ruparelia and Meera Investments Ltd.
BoU lawyers thought to substitute the Crane Bank Ltd (in receivership) to Crane Bank Ltd (in Liquidation), but the court has rejected the move, and condemned the Bank to costs yet again.
A panel of the Supreme Court Justices including Ruby Opio-Aweri, Faith Mwondha, Lillian Tibatemwa, Ezekiel Muhanguzi and Night Tuhaise, in a ruling issued on Thursday August 12 said, the arguments by BoU lawyers led by veteran attorney Dr. Joseph Byamugisha did not hold any water, as they status of the Crane Bank Ltd (in receivership), could be updated at the start of the hearing of the appeal.
The Court said the application by Bank of Uganda to replace Crane Bank (In Recievership) with Crane Bank (In Liquidation) was in bad faith and intendend to circumvent facts of the case in which the Central Bank is appealing following two consecutive losses at the Hight Court and Court of Appeal.
The justices also reiterated that in law, Crane Bank Ltd (in Receivership), Crane Bank Ltd (in Liquidation), and Crane Bank Ltd are three distinct entities with different rights, powers and obligations.
“This application is therefore dismissed with costs to the respondents,” the panel ruled in an unanimous judgement.
On June 23, 2020, the Court of Appeal upheld the judgment of Commercial Court in an application filed by BoU seeking a refund of UGX 397 billion from Mr. Sudhir Ruparelia which he allegedly pulled out from Crane Bank.
Justice David Wangutusi of Commercial Court in August 2019 dismissed a case in which BoU claimed that Mr. Ruparelia and his Meera Investments Ltd fleeced his own Crane Bank Ltd (now in receivership) of UGX397 billion.
But on June 30, 2020, the BoU announced they would appear the judgement reasoning that receivership does not take away the corporate personality of a company which includes the right to trace and recover assets and the right to sue for those assets.
Justice Alfonse Owiny-Dollo, then Deputy Chief Justice then led the panel that included Justices Cheborion Barishaki and Steven Musota to dismiss the BoU claims.
Justice David Wangutusi of Commercial Court in August 2019 had dismissed a case in which BoU claimed that Ruparelia and his Meera Investments Ltd fleeced his own Crane Bank Ltd (now in receivership) of UGX397 billion.
In his 52-page ruling, he said at the time BoU and Crane Bank (in receivership) filed the suit against Mr Ruparelia and his Meera Investments in January 2017, Crane Bank was a non-existing entity, having been terminated when the Central Bank sold its assets to DFCU Bank in October 2016.
The judge ruled that this rendered Crane Bank in receivership incapable of suing or being sued since there would be no assets to be claimed for.
Court noted that the public notice made it clear that BoU as the receiver had done an evaluation of the respondent (Crane Bank in receivership) and arranged for the purchase of its assets and assumption of its liabilities by another financial institution.
“In his [BoU] notice, he specifically stated that the liabilities of the respondent had been transferred to DFCU Bank Ltd and that because DFCU Bank had taken over the liabilities, it would, by way of consideration, be paid by conveying to it the respondent’s assets,” the judge ruled.
Bank of Uganda, through their new attorney Dr. Joseph Byamugisha of Byamugisha & Co Ltd the chose to file an appeal.