Bank of Uganda has responded to the Supreme Court ruling dismissing an Appeal in Crane Bank Limited (In Receivership) Vs. Sudhir Ruparelia and Meera Investments Ltd case.
The dismissal by the Supreme Court followed the filing of a Notice of Withdrawal of the Appeal by Crane Bank Limited (In Receivership) on September 15th, 2021 and an objection to the withdrawal filed by Sudhir Ruparelia and Meera Investments Ltd on September 20th, 2021.
In its ruling on February 11, 2022, the Supreme Court decided that the Judgments of the lower courts, stood. The lower courts found that the receivership of Crane Bank Ltd ended on January 20, 2018, it was a closed financial institution and was non-existent.
Upon withdrawal of the appeal by Crane Bank Ltd (In Receivership) and objection by Sudhir Ruparelia and Meera Investments Ltd on September 20, 2021, the Appeal stood dismissed and the only issue to be determined was on costs and who should pay. However, the dismissal would take effect on the date of endorsement of the ruling (February 11, 2022).
Court ruled that Bank of Uganda should pay the costs of the suit because it was aware at the time of take over that Crane Bank Ltd was financially distressed, incapacitated and could not be expected to pay costs. That it is not logical to expect a shareholder of Crane Bank Ltd (In Receivership) who is entitled to costs of an action to pay costs to himself.
Further, the Supreme Court noted that the implication of the finding that the receivership of the Appellant had ended was that the management of the Appellant reverted to the shareholders after the 20th of January 2018.
Prior to this recent Supreme Court decision, Crane Bank Ltd (In Receivership) and Bank of Uganda had in October 2021 filed an application before the Supreme Court for review of some of its findings and declarations.
According to BoU, one of the grounds of that application relates to the interpretation and application of a repealed/substituted section of the Financial Institutions Act, 2004 as amended in 2016 when making its ruling of 4th October 2021.
“That application is yet to be heard and disposed of by the Supreme Court. The determination of that Application is critical in guiding the Bank of Uganda in implementing the court decisions. We are following up with the Court to have this application fixed for hearing,” BoU said.
The main suit that related to a claim against the shareholders for wrongful extraction of funds from Crane Bank Ltd by Sudhir Ruparelia and Meera Investments Ltd has never been heard on its merits.
“The Central Bank remains committed to fostering a safe and sound financial sector,” BoU said.
