Businessman Sudhir and his son Rajiv Ruparelia who doubles as the Managing Director of Crane Management Services at Commercial Court

Deputy Registrar of the Commercial Court Festo Nsenga on Monday April 29, 2019 delivered a ruling in which city businessman Sudhir Ruparelia emerged the victor after seeking dismissal of Sebalu & Lule Advocates from a case involving Crane Management Services Limited (CMS) and Dfcu Bank Limited which had hired the law firm to defend it in a suit where CMS was seeking rent arrears of about Shs3 billion as well as recovering US $385,728.5 from the bank.

The Commercial court is yet to hear the pending applications in the case between Bank of Uganda (BoU) and Ruparelia over sale of Crane bank to Dfcu bank. The BoU sued Ruparelia and his Meera Investments Company for allegedly fleecing Crane bank of Shs397 billion in fraudulent transactions and transfers.

The third application was filed by Ruparelia, demanding dismissal of BoU pleadings. Crane bank was taken over by the central bank on October 20, 2016 and later sold to Dfcu bank in 2017. Ruparelia has denied the fraud accusations and instead counter-sued the central bank, seeking compensation of about Shs28 billion in damages for breach of contract between him and BoU.

Click to read the ruling:20190429105630628

However, April 29th’s ruling means that BoU and Dfcu Bank cannot hire any lawyers that were in the past employed by any company of the Ruparelia Group on the grounds that such lawyers or law firms have a privilege to some information that they can use against Sudhir and his companies, thus creating a scenario of conflict of interest as agreed by Justice Paul Gadenya Wolimbwa who said there exists an Advocate-client relationship between Sebalu & Lule Advocates and Meera Investments, a member of the Ruparelia Group.

In December 2017, the Commercial Court also kicked out Timothy Masembe and David Mpanga of MMAkS Advocates and AF Mpanga Advocates respectively from the case between Sudhir Ruparelia and Bank of Uganda. Sudhir through his lawyers of Kampala Associated advocates lodged a complaint saying that the two lawyers and their firms are his potential witnesses and therefore, cannot continue representing Bank of Uganda citing conflict of interest having represented him and the defunct Crane Bank Limited (CBL) in the past.

The latest ruling in which Justice Gatenya awarded costs of the suit to the applicant, also means that both Dfcu Bank made losses by hiring Sebalu and Lule Advocates since they can no longer represent them against Ruparelia Group. It also means the bank will incur more costs as it seeks new lawyers to represent it in that particular case.

Further the ruling which is a precursor to the main ruling puts BoU in a weaker position as officials there were hoping to bank on the knowledge of Sebalu and Lule Advocates in regard to Ruparelia Group businesses. Now they will have to look elsewhere for lawyers who have never worked for Sudhir. It will be hard for new lawyers to present evidence pinning Sudhir.

The ruling also comes after parliament’s Committee on Commissions, State Authorities and State Enterprises (COSASE) established that Shs478 billion BoU claimed it put in Crane Bank during receivership was not all used as Shs320 billion is not accounted for. Interestingly CBL needed only Shs150 billion to remain operating, yet BoU handed over CBL assets to Dfcu Bank at Shs200 billion. BoU will have to prove how Sudhir fleeced CBL of Shs397 billion in alleged fraudulent transactions and transfers.

For now one can say Ruparelia has scored two goals against BoU and Dfcu Bank as the next round of the legal battle awaits to be contested in court. Stakes are high for another Sudhir win.