By Spy Uganda
Kampala: After long court battles, BoU recently wrote to Supreme Court in an attempt to withdraw an appeal they had filed on June 23rd, 2020, against businessman Sudhir Ruparelia contesting Justice David Wangutusi’s 2019 ruling, in which he declared that BoU illegally wound up Crane Bank and sold it to DFCU bank under dubious circumstances.
Click To Read Full Respondents Notes On BoU’s Notice Of Withdrawal
However, Sudhir rejected the above insisting that the case must either continue or Court should compel them to pay costs. Because by trying to run away from the appeal, they are tactfully running away from paying legal costs.
Click To Read Full Respondents Notes On BoU’s Notice Of Withdrawal
“BoU is saying Crane Bank in receivership should pay costs, but remember Crane Bank ceased to be in receivership on January 20, 2018, and went back to its shareholders, so when you say Crane Bank should pay costs, BoU is simply saying that we should pay for our selves, yet it’s them (BoU) who took us to court and lost in all the two lower courts before they ran to Supreme Court. So now they don’t want to pay the costs,” Sudhir said recently.
The above has been stamped by Sudhir’s lawyers of the Kampala Associated Advocates who say that the appellants (Crane Bank in receivership) are trying to reverse the decision of the lower courts in regard to payment of costs.
So What’s Way Forward?
It now remains in the hands of the Supreme Court which is set to determine the costs that will be paid to Sudhir by BoU in the long-running legal battle between the tycoon and his Meera Investments Ltd and the central bank, resulting from the closure of Crane Bank Ltd.
The above is because BoU’s appeal is not yet withdrawn until the final pronouncement by Court.
You may also know that there is a difference between withdrawing and dismissing. BoU has only withdrawn but that can’t save them since the appeal was not dismissed by Court to officially discharge them with conditions, either to pay or not to pay costs and this is where the battle is now!
It is worth noting that in a couple of court battles, both the High Court and the Court of Appeal ordered that the Bank of Uganda pay costs to Suhir who has floored them multiple times.
Previous Rulings
In previous court rulings, BoU said that the decision of shutting Crane Bank was necessary upon discovering that it had significant and increasing liquidity problems that could not be resolved without the Central Bank’s intervention, given that Crane Bank had failed to obtain credit from anywhere else.
“An inventory by external auditors found that the assets of Crane Bank were significantly less than its liabilities. In order to protect the financial system and prevent loss to the depositors of Crane Bank, Bank of Uganda had to spend public funds to pay Crane Bank’s depositors,” Mutebile said then.
However, tycoon Sudhir denied the allegation thus counter-suing BoU, seeking compensation of $8m (Shs28 billion) in damages for breach of contract.
He asked the High Court to dismiss the case arguing that the Central Bank overstepped its mandate in commencing court proceedings against him and his Meera Investments Company.
READ ALSO: At Cross Roads:BoU Bosses Clash Over Lost Case Appeal Against Tycoon Sudhir
Presenting an objection against BoU, Sudhir through his lawyers Kampala Associated Advocates, told Justice Wangutusi that when dissolving a bank, BoU had three options including putting someone else in its management – what is termed as statutory management, receivership or liquidation.
Counsel Elison Karuhanga a lawyer at Kampala Associated Advocates, argued that however, BoU chose to go for receivership yet under the law, specifically only the manager and the liquidator of the said bank is mandated to file a suit and not a Receiver.
He further explained that BoU as a Receiver could only dissolve or sell Crane Bank within 12 months but not sue its managers.
Genesis Of The Matter
On June 30, 2017, Crane Bank Limited (in Receivership) took Mr. Sudhir Ruparelia and his Meera Investments Ltd. to court for causing financial loss amounting to UGX 397 billion to Crane Bank in fraudulent transactions and land title transfers.
Crane Bank (in receivership) in its Civil Suit No. 493 of 2017 sought High Court to compel Mr. Ruparelia to pay back the US$80,000,000, US$9,270,172.00, US $ 3,560,000.00, US$990,000.00 and UGX 52,083,995.00 as compensation for breach of fiduciary duty.
While Hon. Justice Wangutusi dismissed the UGX397 billion case against Mr. Ruperalia on a technicality, alleging that Crane Bank (in Receivership) lost its powers to “sue” and to “be sued”, thus rendering its suit a nullity, Crane Bank (in Receivership) maintaining that receivership is a management situation, and hence no legal change as to the capacity of a company to sue and be sued.
