Last year, Hon. Chief Justice Prof. Lillian Tibatemwa-Ekirikubinza of the Supreme Court delivered a ‘big’ ruling that clearly indicated that Bank of Uganda’s (BoU’s) continuous delay in compensating Uganda’s business magnet Dr Sudhir Ruparelia will cost innocent taxpayers more billions.

In Justice Tibatemwa’s ruling, it was clearly put out that since BoU was defeated by Sudhir in a multi-billion Crane Bank scandal with costs on 11th February 2022 (date for commencement of payments due to Sudhir Ruparelia), any delays carry extra charges for Bank of Uganda.

The ruling was out of a failure by the two parties in this scandal [Crane Bank-Bank Of Uganda] and [Meera Investments-Sudhir Ruparelia] to agree on the content of the orders of the decree ensuing from Civil Appeal No.07 of 2021.

You may want to know the background of this matter.

Crane Bank (in receivership) filed an appeal in this Court on 1st August 2020. Before the appeal could be heard, the Appellant withdrew the appeal on 15th September 2020 something the Respondents objected to and prayed that the appeal is dismissed with costs under Rule 90 (4) of the Rules of Supreme Court.

Following a court hearing, on 11th February 2022, Court ruled that the appeal be dismissed with costs to the Respondents in the terms found by the lower courts. Furthermore, that the dismissal took effect on the date of endorsement of the Court’s ruling which was 11th February 2022.

The Respondents who were the successful parties in the application prepared a draft decree of the orders and submitted the same to the Appellant for approval. The decree was in the following terms:

1. The appeal is hereby đismissed with costs in the terms found by the Court of Appeal. The costs shall be borne by the Bank of Uganda.

2. The dismissal of the Appeal shall take effect from the date of this judgment, being 11th February 2022.

3. The Appellant’s receivership ended on 20th January 2018 and thereafter its management reverted to the shareholders.

The Appellant agreed with the first two orders but raised an objection to the third order and re-drafted the decree stating that the dismissal of the Appeal shall take effect from the date of endorsement of this judgment, being 11th February 2022.

Both parties, however, agreed that the Appellant’s receivership ended on 20th January 2018 and thereafter its management reverted to the shareholders. In other words, the appellant did not contest the order that receivership ended on 20th January 2018.

Now, in her ruling, Chief Justice Tibatemwa on 1st July 2022 decreed in favour of Meera Investments Limited and Sudhir Ruparelia thus;

1. The appeal is hereby dismissed with costs in the terms found by the Court of Appeal. The costs shall be borne by the Bank of Uganda.

2. The dismissal of the Appeal shall take effect from the date of this judgment, being 11th February 2022.

3. The Appellant’s receivership ended on 20th January 2018 and consequently, its management reverted to the shareholders to that date. Remember that this is the highest court in the land and no further legal action is expected.

Background Of Entire Saga

BoU /Crane Bank in Receivership had sued Sudhir and Meera Investments Limited for allegedly fleecing Crane Bank Limited (CBL) of Shs397 billion which the Central bank wanted to be refunded.

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,” BoU 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.

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 are 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.

Full Genesis Of The Case

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.