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Court cuts award in BoU-Sudhir case to Shs500m
What you need to know:
- Justice Mike Chibita, who sat as a single judge, said the initial instruction fees of Shs45b that had been awarded by the registrar of the court to the lawyers, was on a higher side since the appeal by Crane Bank in receivership was prematurely withdrawn, hence no much work was done by the lawyers.
The Supreme Court has awarded Shs500m as instruction fees to lawyers who represented Meera Investments and businessman Sudhir Ruparelia in a Shs397b case that they won against Bank of Uganda (BoU).
Justice Mike Chibita, who sat as a single judge, said the initial instruction fees of Shs45b that had been awarded by the registrar of the court to the lawyers, was on a higher side since the appeal by Crane Bank in receivership was prematurely withdrawn, hence no much work was done by the lawyers.
“The appeal in issue was withdrawn before hearing, therefore, not as much work was done by the advocate in this court as would have been if the appeal had been argued to its logical conclusion,” Justice Chibita said in his May 5 ruling delivered by a registrar.
He continued: “It is trite that the instruction fees should not be too excessive so as to discourage the public from accessing the courts of law and not too low to demoralise new recruits to the profession. The award of Shs45b in the circumstances was excessive, oppressive and punitive. It amounts to an injustice to the applicant and must be interfered with. From the foregoing, I hereby set aside the sum of Shs45b as instruction fees and substitute the same with an award of Shs500m.”
Instruction fees is the money paid to an advocate for the work done on a given case. Difficulty of a case or the amount of work done by an advocate is one of the most important factors when assessing the quantum of instruction fees.
Likewise, Justice Chibita, who rejected what he called two double taxation, awarded the lawyers Shs5m for each of the interlocutory applications in the case before setting aside the initial amount of Shs50m that the registrar of the court had awarded.
Background
The facts that led to the Shs397b legal battle is that on October 20, 2016, Crane Bank was placed under statutory management by BoU pursuant to Sections 87 (3) and 88 (1) of the Financial Institutions Act (FIA) for being under capitalised.
The Central Bank, pursuant to Section 94 of the Financial Institutions Act, placed Crane Bank under receivership, with some of its assets and liabilities sold to dfcu Bank.
On June 30, 2017, Crane Bank in receivership, filed a commercial case before the High Court, Commercial Division, in which it was seeking to recover more than Shs397b from Mr Ruparelia, accusing him of misappropriating the funds as the director and shareholder with his Meera Investment Company.
But on August 29, 2019, then presiding judge David Wangutusi delivered his ruling in which he dismissed the multibillion commercial dispute on grounds that Crane Bank in receivership lost its legal powers “to sue” Mr Ruparelia or “to be sued” the moment it was placed under receivership.
Crane Bank in receivership was dissatisfied with the decision of the Commercial Court and lodged an appeal before the Court of Appeal, which appeal was equally dismissed on similar reasons.
But still being dissatisfied with the judgment of the Court of Appeal, Crane Bank in receivership went on and appealed to the highest court in the land (the Supreme Court), but withdrew the main appeal even before the court could hear it out.
It’s out of these developments that the lawyers involved in this matter filed for costs regarding instruction fees, leading to their award of Shs500m.
