Prime
Supreme Court puts brakes on Crane Bank liquidation
Sudhir Ruparelia (2nd right) with his lawyers Sharma Kooki (right), Peter Kabatsi (2nd left) and Joseph Masiko after the ruling at the Supreme Court in Kampala yesterday. PHOTO / ISAAC KASAMANI
What you need to know:
- Appeal case. The main appeal involves Crane Bank in receivership, challenging the decisions of the Commercial Court and the Court of Appeal in which both courts ruled that Crane Bank in receivership did not have the powers to sue city businessman, Sudhir Ruparelia, and his Meera Investment Company, in which it was seeking to recover more than Shs397b that they allegedly misappropriated.
The Supreme Court yesterday stopped Bank of Uganda (BoU) from further liquidating Crane Bank in receivership until the final determination of the main appeal.
A panel of five justices in a unanimous ruling held that the process to liquidate Crane Bank was in disobedience of Court of Appeal judgment in which it ruled that the bank in receivership was a closed financial institution and, therefore, couldn’t be progressed into liquidation.
“The 1st respondent (Crane Bank) was closed as a financial institution and placed under receivership. Upon closure, it ceased being a financial institution under the Act and it could, therefore, not be progressed to liquidation,” ruled the justices.
“A temporary injunction doth issue restraining the 2nd respondent (BoU), their agents or anyone acting under their authority from placing the 1st respondent (Crane Bank) under liquidation pending the hearing and determination of civil appeal no.7 of 2020,” the justices further ruled.
The justices were Rubby Opio Aweri, Faith Mwondha, Lillian Tibatemwa, Ezekiel Muhanguzi, and Night Tuhaise.
The ruling now means the Central Bank cannot continue with managing the affairs of Crane Bank in receivership.
The justices also observed that changing the status of Crane Bank in receivership to Crane Bank in liquidation, were intended to defeat the main appeal that was before them.
However, the same appeal was last month withdrawn by Crane Bank after losing interest in pursuing and the same is pending the official withdrawal by the court next month.
The court yesterday also held BoU in contempt of court orders for having gone against the judgment and orders of the Court of Appeal.
“In the present case, the contempt by the 2nd respondent (BoU) relates to conduct which perverts the course of justice. The attempt at circumvention of the decision of the Court of Appeal by altering the status of the 1st respondent from Crane Bank in receivership to Crane Bank in liquidation, was in our view, aimed at preventing the course of justice before this court and the same amounted to contempt,” held the justices.
The ruling followed the notice by BoU in which it published in the media on November 15, 2020, that they had placed Crane Bank under liquidation and ordered the winding up of its affairs.
