The High Court in London has dismissed an application by dfcu Bank seeking to amend its defence in the ongoing case involving the defunct Crane Bank Limited (CBL), marking yet another legal victory for businessman Sudhir Ruparelia and his fellow former shareholders.
In a strongly worded ruling, the Court declined dfcu Bank’s attempt to rely on the controversial forensic audit conducted by PriceWaterhouseCoopers (PwC), declaring the report inadmissible under Ugandan law. The court further noted that the PwC audit contained multiple inconsistencies and unverified claims, raising serious questions about its credibility.
The ruling arises from a long-running legal battle in which Crane Bank and its shareholders accuse dfcu Bank and other parties of unlawfully acquiring Crane Bank’s assets in a deal allegedly orchestrated with officials from the Bank of Uganda.
dfcu Bank had filed to amend its pleadings to include the PwC report as proof of alleged fraud, corruption, and mismanagement on the part of Crane Bank and its directors. However, the UK court sided with the claimants, striking out the application and emphasizing the unreliability of the evidence provided.
In addition to rejecting the amendment, the Court also denied dfcu Bank’s request for broad disclosure of documents and forensic examination of phone records belonging to CBL shareholders. The Bank has now been ordered to pay legal costs incurred by the claimants.
The London case stems from a larger commercial dispute valued at over US$200 million. The Crane Bank team had earlier secured a major victory in the Court of Appeal in Uganda, which ruled in their favour against the Bank of Uganda in relation to the controversial takeover of the bank in 2016.
Crane Bank was Uganda’s third-largest bank before it was taken over by the central bank and sold to dfcu in a transaction that has since come under intense legal and public scrutiny. The ongoing case in the UK alleges a conspiracy involving dfcu Bank and development finance institutions to purchase Crane Bank’s assets at a gross undervalue.
The UK courts have also previously rejected attempts by dfcu Bank’s UK-based directors to invoke the “foreign act of state” doctrine, which would have shielded the defendants from litigation by arguing that the acts in question were executed by a sovereign foreign government.
