Why BoU dropped lawyers David Mpanga and Masembe Kanyerezi

The Bank of Uganda has hired new legal brains to represent its interests in the mediation process with city businessman Sudhir Ruparelia, involving the closure of Crane Bank.

The law firm that has replaced David Mpanga of AF Mpanga-Bowmans and Timothy Masembe Kanyerezi of MMAKS is Sebalu, Lule and Company Advocates, and sources say this twist that could have forced BoU to drop the two lawyers is related to a ‘leaked’ confidential document detailing account particulars of former clients of Crane Bank.

This is contrary to the confidential clause that governs the banking sector and is said to have irked Mr. Ruparelia to the point that he was considering filing another case against BoU and the law firms.

It is pertinent to recall that earlier, in a Notice of Motion filed in court Mr. Ruparelia had said that by representing the BoU and Crane Bank, the two law firms, once retained as counsel by the latter, were acting in conflict of interest.

‘A declaration that the 1^st and 2^nd Respondents are conflicted in acting for the 3^rd and 4^th Respondents and in so acting are in violation of the advocate-client relationship and the Advocates (Professional Regulations) conduct’, the Notice of Motion filed around August this year by Messrs. Kampala Associated Advocates (KAA) on behalf of Mr. Ruparelia, reads in part.

At the time, according to Mr. Ruparelia, the two lawyers were privy to sensitive information regarding the Crane Bank, owing to their past relationship with the latter. The businessman also averred that the two law firms or their lawyers were instead potential witnesses in the case.

‘A declaration that the lawyers in the 1^st and 2^nd Respondents are potential witnesses in HCCS 493 of 2017 and are barred from representing the 3^rd and 4^th Respondents in the said suit’, the Notice of Motion added.

Further, Mr. Ruparelia sought court to permanently restrain the lawyers from representing the BoU and Crane Bank.

 ‘A permanent injunction and/ or restraining order be granted restraining the   1^st and 2^nd Respondents from appearing and or acting as Counsel for the 3^rd and 4^th Respondents in HCCS 493 of 2017,’ the depone adds.

So, the sources say that for BoU and Mr. Ruparelia to be able to sit on the same table for mediation as directed by Commercial Court Judge Justice David Wangutusi, Mpanga and Masembe had to be dropped and another set of lawyers hired. In this case, Sebalu and Lule, had to be brought in for the negotiation to proceed in an amicable manner.

 Background to the case

Crane Bank was closed by BoU in 2016 and, as receiver/Manager ‘offloaded’ the bank to DFCU bank early this year.

The BoU was later to drag Mr Ruparelia, the majority shareholder, and the other shareholders to the Commercial Court and engaging the services of lawyers David Mpanga and Timothy Masembe, a development which Mr. Ruparelia objected to.

In the ensuing period Mr. Ruparelia Sudhir petitioned court, seeking to stop the city law firms of MMAKS Advocates and AF Mpanga Advocates – Bowmans Uganda, from representing the Bank of Uganda (BoU) and Crane Bank in the case.

“The Bank of Uganda wants this matter sorted out, now that mediation has been agreed upon, so it cannot continue with the lawyers who have been objected to by the other party (Mr. Ruparelia),” the source told the EagleOnline. 

And since the matter is before court for mediation, this newspaper could not get comment from the two lawyers or Mr. Ruparelia.