Court sets date for BoU-Sudhir case ruling - Business | NTV

Court sets date for BoU-Sudhir case ruling

Thursday July 4, 2019
Court sets date for BoU-Sudhir case ruling

City businessman Sudhir Ruparelia. FILE PHOTO 

Kampala. The head of Commercial Court, Justice David Wangutusi, will on August 26 rule on whether to dismiss the original multibillion commercial dispute filed against city businessman Sudhir Ruparelia by Crane Bank in receivership or go ahead and hear it on its merits before the final judgment can be delivered.
The fixed date followed submissions of lawyers of Mr Ruparelia and those of Crane Bank in receivership “for” and “against” the dismissal of the Shs397b case against Mr Ruparelia, who is accused of fraudulent transactions and land title transfers.

Mr Joseph Matsiko from Kampala Associated Advocates (KAA), one of Mr Ruparelia'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.
He said 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 the 30th day of June 2017 when Crane Bank Ltd was in receivership. At issue, therefore, is whether a suit can be filed by a financial institution in receivership,” Mr Matsiko said.
He argued further that the Supreme Court, which is the final court in the land, has since ruled in a similar case 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 Crane Bank 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, Mr Elison Karuhanga, said Crane Bank Ltd was a foreign company hence could not possess powers to own freehold land.

The suit. In June 2017, Crane Bank in receivership sued Mr Ruparelia and his Meera Investments Company, the real estate arm of his business, for allegedly fleecing his own bank of Shs397b in fraudulent transactions and land title transfers.
Mr Ruparelia denied the allegations and counter-sued BoU, seeking compensation of $8m (Shs28b) 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.