By Andrew Irumba
Kampala: City businessman Dr. Sudhir Ruparelia is ready for a showdown with Bank of Uganda (BoU) after the High Court Commercial Division set the date for hearing of their case.
Justice David Wangutusi, the head of Commercial Court revealed Thursday morning that he will on August 26 2019 rule on whether to dismiss BoU’s case against Sudhir or go ahead and hear it on its merits, before the final judgment can be delivered.
Wangutusi’s decision came after submissions of Sudhir’s lawyers and those of Crane Bank in receivership “for” and “against” the dismissal of the Shs397 billion case against the businessman. BoU accuses Sudhir and others of allegedly engaging in fraudulent transactions in the name of crane Bank and executing questionable land title transfers.
Details Of The Case
BoU filed the said case against Sudhir, Meera Investments and others in June 2017. But Sudhir denied the allegations and counter-sued BoU, seeking compensation of USD8m (Shs28Bn) in damages for breach of contract. The substantive case has since been under mediation on the advice of the head of the Commercial Court on grounds that a losing party would pay heavily if it goes for full trial.
However, Joseph Matsiko of Kampala Associated Advocates (KAA), who is one of Sudhir’s lawyers, argued that on October 20, 2016, Bank of Uganda (BoU) took over the management of Crane Bank pursuant to Sections 87 (3) and 88 (1) a & (b) of the Financial Institutions Act and that on January 20, 2018, BoU placed it under receivership. Matsiko asserts that since Crane Bank was placed under receivership, it did not have powers to lodge a law suit against its client, and that it did not have audience before court, before asking court to dismiss it on that technicality.
“The suit was filed on June 30 2017 when Crane Bank Ltd (CBL) was in receivership. At issue, therefore, is whether a suit can be filed by a financial institution in receivership,” Matsiko argued.
He argued further that the Supreme Court, which is the final court in the land, has since ruled in a similar case and that it would be wrong for any court to confer the right to sue when Parliament, in its wisdom, did not find it necessary to do so.
“The Supreme Court in essence was saying this honourable court must look only at laws governing receivership of a financial institution, in this case the Financial Institutions Act, and cannot confer or infer any powers that are not specified in the Act. The Financial Institutions Act does not grant an institution in receivership a right to sue. Court cannot infer such a right either,” he submitted.
However, Dr Joseph Byamugisha, who represented CBL in receivership, said when a financial institution is placed under receivership, it does not lose its powers to commence or continue with lawsuits. Submitting on the second issue, another lawyer from KAA, Elison Karuhanga, said CBL was a foreign company hence could not possess powers to own freehold land.
