UGANDA, Kampala | Real Muloodi News | Despite a recent Supreme Court judgement directing the Bank of Uganda (BOU) to pay all of the businessman’s legal fees, the dispute between the Central Bank and the attorneys for Meera Investments Ltd and property magnate Sudhir Ruparelia over the acquisition of Crane Bank has yet to come to an end.
On February 11, the Supreme Court ordered BoU to pay all legal costs in the USh397 billion multi-billion dollar case that Crane Bank in receivership had brought against city businessman Sudhir Ruparelia and his construction company Meera Ltd, effectively ending the five-year litigation.
The Supreme Court judges collectively agreed that BoU was behind the Shs397b commercial action against the businessman, not Crane Bank in receivership.
However, the central bank claimed in a statement on February 18 that before the current Supreme Court judgment, Crane Bank in receivership had requested reconsideration of its findings.
According to BoU, the application above has still to be heard, and the conclusion might significantly influence the final orders.
“Prior to this recent Supreme Court decision, Crane Bank Ltd in receivership and Bank of Uganda had in October 2021, filed an application before the Supreme Court for review of its findings. One of the grounds of that application relates to the interpretation and application of the repealed/ substituted section of the Financial Institutions Act, 2004,” BoU’s statement read in part.
“That application is yet to be heard and disposed of by the Supreme Court. The determination of that application is critical in guiding the Bank of Uganda in implementing the court decisions. We are following up with the court to have this application fixed for hearing.” the statement further read.
Counsel Joseph Matsiko, one of the attorneys for Meera Investment Ltd and Mr Ruparelia, responded to the statement by saying that because the Supreme Court denied the primary appeal, BoU could not claim a current application for review.
“You cannot talk of an existing application for review when the main appeal has since been dismissed. This is misconceived and unfortunately, as they prolong this legal matter, it’s the tax payers to bear the consequences,” Counsel Matsiko said.
In addition, the Supreme Court declared unanimously on February 11 that Crane Bank reverts to the shareholders as of January 20, 2018.
Sudhir’s Attorneys Refute the BoU Statement
Lawyers for city tycoon Sudhir Ruparelia have expressed astonishment at the Bank of Uganda’s reaction following the Supreme Court’s denial of the central bank’s appeal against businessman Sudhir Ruparelia and his real estate arm, Meera Investments Ltd., with costs.
Sudhir’s attorneys, led by Peter Kabatsi of the Kampala Associated Advocates, stated that the Central Bank’s Friday press statement, which the BoU reiterated, is still investigating one of the case’s bases, which “relates to the interpretation and application,” was shocking.
A responding press statement from KAA reads in part, “Our attention has been drawn to a statement issued by Bank of Uganda on the Supreme Court Ruling in Civil Appeal No. 07 of 2020; Crane Bank Limited (In Receivership) Vs Sudhir Ruparelia and Meera Investments Limited. We have noted with concern that the statement contains many incorrect assertions, and it has become necessary for us to respond to it to set the record straight.”
KAA goes on to list the correct facts that emanated from BOU placing Crane Bank Limited (CBL) under Receivership on the 24th January 2017. BOU then sold CBL the next day-25th January, 2017. BOU used CBL to file an action in the High Court (Civil Suit No. 493 of 2017) against Sudhir Ruparelia and Meera Investments Limited.
“We objected to the case on the basis that it had no merit. The suit was dismissed with costs against BOU. BOU, through CBL, then appealed to the Court of Appeal (Civil Appeal No. 252 of 2019).”
“The Court of Appeal upheld all the findings of the High Court and dismissed the Appeal with costs against BOU and also found that receivership had ended in January 2018 in accordance with the express provisions of the law. BOU then appealed to the Supreme Court (C.A 07 of 2020),” the KAA statement reads.
Because the issue has been resolved, Mr Kabatsi believes the BoU statement is misguided and inept.
“Once the appeal is withdrawn per the law, nothing is left, except to pay costs,” Mr Kabatsi said.
In their view, the verdict ends a 5-year-long commercial battle between businessman Sudhir and Uganda’s banking authority.
The Backstory
The circumstances of this lawsuit are that BoU licensed Crane Bank to conduct financial institution activities.
Crane Bank was placed under statutory administration by BoU on October 20, 2016, following Sections 87 (3) and 88 (1) of the Financial Institutions Act due to under capitalisation.
Crane Bank was placed into receivership by the Central Bank under Section 94 of the Financial Institutions Act, with some assets and liabilities transferred to DFCU Bank.
Crane Bank, which was in receivership at the time, filed a commercial complaint in the High Court on June 30, 2017, to collect Ush397 billion from the businessman Sudhir, which he allegedly stole as a director and shareholder of Meera Investment Company.
David Wangutusi, the sitting judge, issued his decision on August 29, 2019. He dismissed the multibillion-dollar commercial dispute because Crane Bank in receivership lost its legal right to “sue” or “be sued” Ruparelia the minute it was placed in receivership.
In receivership, Crane Bank was displeased with the Commercial Court’s judgment and filed an appeal with the Court of Appeal.
A panel of three judges chaired by then-Deputy Chief Justice (Alfonse Owiny-Dollo, now Chief Justice) similarly dismissed the appeal and affirmed the Commercial Court’s decision.
But, still displeased with the Court of Appeal’s judgment, Crane Bank, which is in receivership, has filed an appeal with the Supreme Court. Crane Bank, which was in receivership at the time, withdrew the appeal notice before it could be heard on its merits.
On this reasoning, the same court ordered on February 11 that BoU should pay all legal fees spent by Sudhir from the High Court to the Supreme Court.
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