Probably the longest litigation battle in Uganda’s financial sector has come to an end after five years with Bank of Uganda, the regulator of the financial sector, coming out of it bruised, hurt and shamed for not knowing how to do its job.

As the public expected, the Supreme Court on Friday dismissed, with costs to the respondents, an appeal by Bank of Uganda against businessman Dr. Sudhir Ruparelia and Meera Investments, the real estate arm of the Ruparelia Group.

The highest ranking court in the country ordered Bank of Uganda directly pay costs at all court levels, right from the Commercial Division of the High Court. The court also directed that the management of Crane Bank be reverted to its shareholders.

The Supreme Court ruling effectively settles a long-standing legal battle between Sudhir Ruparelia and the central bank, dating back to 2017 when the regulator erroneously took over the management of Sudhir’s Crane Bank and eventually sold it to DFCU Bank.

According to the ruling, Sudhir Ruparelia will not pay the Shs397b that Bank of Uganda had wanted him to pay. This ruling excited Sudhir Ruparelia who over the period of the litigation maintained the Bank of Uganda has stolen his bank.

Crane Bank Limited (in receivership) had sued Sudhir and Meera Investments Limited in the High Court Commercial Division. The bank had sought recovery of money, allegedly misappropriated by Sudhir Ruparelia as a director and shareholder.

The latest ruling was on an application to withdraw an appeal and the party that was supposed to meet the costs of the withdraw of the appeal.

Businessman Dr. Sudhir Ruparelia has won a case in the Court of Appeal in which Bank of Uganda (BoU) contested the ruling of the lower court.

The court upheld the judgment of Commercial Court in an application filed by BoU seeking a refund of UGX 397 billion from Sudhir which he allegedly pulled out from Crane Bank.

“The person (petitioner) should pay cost and that is non other than Bank of Uganda because Margret Kasule filed on behalf of Bank of Uganda. They knew Crane Bank was in receivership as it wasn’t in existence but they went ahead to sue it” read the judgement.

Justice David Wangutusi of Commercial Court in August 2019 this week 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 22-page ruling that was delivered by the court’s deputy registrar, Mr Festo Nsenga, Justice Wangutusi noted that 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.

SSOURCE: PMLDaily