Crane Bank saga: Supreme court dismisses BoU's appeal

The Supreme Court has dismissed an application by Bank of Uganda to amend its appeal in which it sought to challenge a ruling by the appellant court in favour of former owner of Crane Bank and Meera Investments ltd

If successful, the amendment would have reversed the several losses the Central Bank has suffered at the hands of businessman Sudhir Ruparelia 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 the central bank'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.

This latest application to switch parties emanates from the 20th of October 2016 statutory takeover of Crane Bank Limited under the Financial Institutions Act and subsequently placed it under receivership on 20th January 2017, before selling its assets and liabilities to Dfcu Bank on the 25th of January 2017.

Bank of Uganda, through Crane Bank (in Receivership) sued Sudhir Ruparelia, one of the Shareholders of the bank, together with Meera Investments Ltd

Before the main case could be heard, Sudhir and Meera, raised preliminary objections through the High court in which they argued that Crane Bank (in Receivership) had no basis for suing since the law did not allow a company in receivership any powers to sue or be sued.

The High Court sustained the preliminary objections and dismissed the case Bank of Uganda and ordered it to the costs of the suit to Sudhir Ruparelia.

Dissatisfied with the High Court ruling, Crane Bank Limited in Receivership filed an appeal, but the appellate court maintained that a company under receivership can’t sue or be sued.

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.

It is this request that the five justices have now dismissed saying it was done in bad faith and was an attempt to circumvent the main issue in the appeal- which is whether a company in receivership can sue or be sued.