CRANE BANK CASE: Supreme Court dismisses BoU’s application with costs to amend appeal against Sudhir - Daily Post Uganda

CRANE BANK CASE: Supreme Court dismisses BoU’s application with costs to amend appeal against Sudhir

KAMPALA: The Supreme has dismissed an application in which Bank of Uganda had sought permission to amend the memorandum and record of appeal before hearing the appeal in the Crane Bank case.

In 2016, BoU took over Crane Bank citing undercapitalisation and it was acquired by DFCU in January 2017. BoU then filed a case on behalf of Crane Bank (in receivership) against Crane Bank Vice Chairman Sudhir Ruparelia and Meera Investments for allegedly syphoning money out of the bank. BoU lost the case as it was thrown out on grounds a bank in receivership cannot sue or be sued according to the Financial Institutions Act (2004). BoU filed an appeal in the Court of Appeal which it lost.

BoU then ran to the Supreme Court and filed an appeal and went further to file an application to substitute Crane Bank Limited (in receivership) with Crane Bank Limited (in liquidation), saying it is still a licensed financial institution under resolution and the Financial Institutions Act.

BoU lawyers led by Joseph Byamugisha gave a justification, arguing that it was necessary for the disposal of the appeal that the capacity in which BoU is managing and controlling Crane Bank and its assets and liability to be stated.

However, Supreme Court justices; Rubby Opio Aweri, Faith Mwondha, Dr Lilian Tibatemwa, Ezekiel Muhanguzi and Percy Night Tuhaise dismissed the application.

“Since the appeal was filed by Crane Bank (in receivership) at the time when Crane Bank (in liquidation) was non-existent, it only prudent that the appeal proceeds under the same parties and no prejudice will be occasioned,” they ruled.

The justices noted that the amendment of the appeal by substituting of the parties or entities will fundamentally affect the appeal even before it is heard, adding that granting BoU’s application would in effect introduce a new party to the appeal, which was non-existent at the time of filing the suit.

“It is our considered opinion that in the given circumstances, by allowing the amendment, we would introduce the issue of liquidation, which is alien to the subject of the appeal since the said appeal only challenges the lower courts’ decision that Crane Bank in receivership has no powers to sue or be sued under the Financial Institutions Act,” the judgement read.

“We do not agree with the applicant that Crane Bank Limited in receivership is the same as Crane Bank Limited in liquidation. Under the law, the two entitles can never be the same and can never enjoy the same status,” they ruled.

The justices ordered BoU to pay costs to business magnate Sudhir Ruparelia and his Meera Investments Limited, the respondents in the matter.

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