The UK Court of Appeal referred a case brought to it by Crane Bank to determine that the UK High Court has jurisdiction to rule over the sale of Crane Bank’s assets and liabilities to DFCU. Crane Bank argued that the sale of its assets and liabilities to DFCU was unlawful and sought to challenge the decision in the UK High Court. The UK Court of Appeal's referral signifies the importance of clarifying whether the UK court has authority to make a ruling on this matter.
Crane Bank and its shareholders filed the lawsuit against DFC Ltd.
Sir Julian Flaux examined the matter in question. Lord Jusice Popplewell, Lord
Jusice Phillips, and the Chancellor of the High Court
Background
The Bank of Uganda took over and sold Crane Bank’s assets and
liabilities to DFCU in 2017. Crane Bank sued DFC in the UK for this. DfCU
argued successfully in the UK high court that the UK court has no jurisdiction
to hear the case. Crane Bank appealed to the court of appeal against this
decision.
The case brought by Crane Bank and its shareholders against DFC
Ltd. and some of its directors and shareholders were heard by Sir Julian Flaux,
Chancellor of the High Court,Lord Jusice Popplewell and Lord Jusice Phillips
The court confirmed two of the high court’s prior rulings that the
Bank of Uganda was a sovereign entity carrying out its official duty outside the
mandate of UK courts. However, the court said it did not have enough
information to rule on whether the sale was a purely commercial transaction and
whether it infringed on public policy, referring these back to the high court
for interpretation.
Dfcu said they reserve the right to appeal to the Supreme Court
but will decide on their next course of action after consultation. “This poses
no threat to the bank’s stability or ability to serve its clients,” said DFCU
Ltd. CEO Charles Mudiwa spoke at a press conference after the ruling. He said
the bank was fully capitalized and was one of the first banks to meet BOU’s new
capitalization requirements, which saw the minimum paid up capital increase to
Sh120b from the previous sh25b.
Crane Bank founder and major shareholder Sudhir Ruparelia was keen
for his day in Court “It is clear that the DFCU is going to face a full trial
for conspiracy, fraud, and corruption for their hand in the sale of assets of
Crane Bank,” Ruparelia told New Vision. “We want this case concluded and out of
the way. It will be a lesson to all those who connive to take people’s property
illegally.”
Crane Bank was shut down by the Bank of Uganda on the grounds that
depositor funds were in danger and the bank had become technically insolvent.
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