Supreme Court quashes BoU move to liquidate Crane Bank

Supreme Court quashes BoU move to liquidate Crane Bank

The Supreme Court of Uganda has delivered yet another ruling in favour of Sudhir Ruparelia regarding his Bank, Crane Bank which was taken over by Bank of Uganda, placed under receivership and its assets sold to DFCU Bank.

After selling the assets to DFCU, Bank of Uganda filed a suit under Crane Bank in Receivership against Sudhir and Meera Investments seeking to recover over 400 billion shillings and 48 land titles. The suit by Crane Bank was dismissed by High Court with costs to be paid by Bank of Uganda on ground that a bank under receivership cannot sue, receivership had ended and Crane Bank was a non citizen company which could not hold freehold titles.

Bank of Uganda appealed to the Court of Appeal which unanimously upheld the findings of the High Court. Thereafter, Bank of Uganda appealed the matter to the Supreme Court. However, before the hearing of the appeal, Bank of Uganda decided to place Crane Bank into liquidation which materially altered the status of the Bank before the Court.

Bank of Uganda’s application to change the status of the appellant from Crane Bank in Receivership to Crane Bank in Liquidation was equally dismissed by the Supreme Court. After issuing a notice to the public placing Crane Bank into Liquidation, Sudhir through his lawyers, Kampala Associated Advocates filed an Application against Bank of Uganda for a temporary injunction objecting to the move by the Bank of Uganda placing Crane Bank under Liquidation yet there was an appeal before Supreme Court showing that Crane Bank was under Receivership. In the Application, the lawyers sought for an order of court restraining Bank of Uganda from continuing with the liquidation process of Crane Bank and a declaration that Bank of Uganda was in contempt of court orders.

Yesterday 4th October, the Supreme Court delivered its ruling wherein it allowed the Application and restrained Bank of Uganda from placing Crane Bank into liquidation. The highest appellate court of the land made the following findings.

The Court first overruled the objection by Bank of Uganda that it is immune from being sued under the law governing Banks in Uganda. Court found that Bank of Uganda can be sued for anything done in bad faith. Court found that in the instant case Bank of Uganda was rightly sued as it had acted in bad faith by placing Crane Bank into Liquidation which was after losing the appeal […]

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