THE BIG STORY: What was set to be a blockbuster legal battle could end on a whimper after last week’s Supreme court ruling dismissed an application by the Bank of Uganda to amend its appeal Sudhir Ruparelia and Meera Investments Ltd.
The protracted legal war, which started in 2017 after BOU’s closure of Crane bank, had a significant twist in 2019 when Justice David Wangutusi dismissed a suit by BOU against Sudhir for lack of legal basis to sue.
BOU appealed the ruling but afterwards wanted it amended, but last week, five Supreme court justices unanimously dismissed the BOU application to amend.
When BOU closed Crane bank in October, 2016, both parties entered into a Confidential Settlement and Release Agreement. The agreement prohibited BOU from suing Sudhir for any activity that occurred during his management of the bank.
The agreement also provided that the parties would keep the agreement confidential. BOU would hand some property back to Sudhir and he would pay $60m and give up his branches. Part of the payment would be in cash and part of it would be in the property.
However, BOU abandoned this agreement and, through Crane Bank in Receivership, ran to court seeking to recover a total of $93.8 million and Shs 60.3 billion from the bank, together with the freehold titles to Crane bank’s branches, general damages, interest and costs.
Since then, BOU has suffered several setbacks with the latest ruling casting doubt on the sustainability of the suit. Dissatisfied with the High court ruling, BOU appealed, but the appellate court maintained that a company under receivership can’t sue or be sued.
Crane Bank Limited in Receivership then appealed against the decision of the Court of Appeal in the Supreme court, which is pending resolution.
To stop Dr Sudhir and Meera Investments from enforcing the ruling of the Court of Appeal to regain their company, Crane Bank Limited in Receivership also filed Supreme court application against Sudhir Ruparelia which was dismissed.
Following this court defeat of the Bank of Uganda on November 15, 2020, BOU issued a public notice in the media to the effect that it had placed Crane Bank Limited under liquidation and ordered the winding up of its affairs.
Sudhir Ruparelia then filed Supreme Court Miscellaneous Application Nos. 39 and 40 of 2020 against Crane Bank Limited in Receivership and BOU seeking interim and temporary injunctions respectively to stop BOU from continuing with the liquidation process. However, the court also dismissed this application on December 22, 2020.
Following this ruling, Bank of Uganda, this time, through Crane Bank (In Liquidation) went to the Supreme court asking to switch itself with Crane Bank Limited in Receivership as the substantive party in the Supreme court appeal a move that the five justices have now dismissed saying it was a move in bad faith and an attempt to circumvent the main issue in the appeal- which is whether a company in receivership can sue or be sued.
The justices also ruled that the very nature of the amendment sought by BoU would fundamentally change and alter the facts of the main appeal. They also ruled that the Bank of Uganda’s latest application was in bad faith since it was made with the full knowledge that it would impact the main appeal.
If successful, the amendment would have reversed the several losses the central bank has suffered at the hands of businessman Sudhir and his company Meera Investments Ltd.
The five justices, Rubby Opio-Aweri, Faith Mwondha, Dr Lillian Tibatemwa, Ezekiel Muhanguzi and Percy Night Tuhaise in unison dismissed BOU’s bid to substitute Crane Bank in Receivership with Crane Bank in Liquidation, a move the justices said would fundamentally alter the facts of the case and deny both Sudhir and Meera a chance at justice.
Could this be the nail in the coffin for BOU? It remains to be seen what its next course of action will be.