The UK Appeal Court delivers its decision in the Crane Bank-DFCU dispute.

The United Kingdom (UK) Court of Appeal has determined that the Crane Bank-DFCU asset dispute may be heard in the UK.

The Crane Bank Limited (CBL) suit had previously been rejected by the UK High Court on the grounds that it was based on activities taken by the Bank of Uganda and so constituted acts of the State of Uganda. The Court of Appeal has recently concluded that some of the activities are of a business character and may be prosecuted in an English court.

CBL filed a lawsuit in the English courts in December 2020, alleging the transaction involving the Bank of Uganda's sale of some of CBL's assets and assumption of some of CBL's liabilities to dfcu Bank Limited (dfcu). Crane Bank's assets were transferred to DFCU Bank by the Bank of Uganda in a 2017 acquisition.

To counter this, dfcu filed an application challenging the English courts' jurisdiction to hear the claim, claiming that the actions of the Bank of Uganda (BOU) were an act of the State of Uganda carried out in pursuit of the BOU's constitutional and statutory powers, which an English court should not inquire into. The English High Court concurred, ruling that the English courts lacked jurisdiction to consider the matter. Crane Bank Limited then appealed to the UK Court of Appeal, which heard the case on April 3-5, 2023.

The Court of Appeal issued its decision today, holding that, while dfcu Bank, dfcu Limited, and others who challenged the jurisdiction of the UK Courts to try this matter may be correct in that the English Court lacks authority to consider the claim, because some of BOU's acts may be of a commercial nature and/or there may be public policy reasons why the English Court should decide the claim, this issue should not be decided at a preliminary stage through a jurisdiction challenge.

According to a Kampala-based legal expert, the Court of Appeal reached no ruling on the underlying facts or the merits of the claim since these questions were not before the Court.

"The Appeal addressed technical legal issues raised at the preliminary stage rather than the merits of the claim." "The factual allegations will be determined by the trial judge," the expert stated, adding that "under English Law, DFCU has the right to seek damages."