Trash: Sudhir trashes BoU and CBL claims, demands for Shs28bn compensation

Sudhir Ruparelia

By Kagenyi Lukka

If Dr Sudhir’s prayers before the commercial succeed, it will be another round of several knockouts that the City property mogul has inflicted on the troubled Bank of Uganda.

First,Dr Ruparelia successfully managed to permanently extinguish conflicted lawyers from all matters involving him, crane bank limited and other associated entities in the Ruparelia group such as Crane management Services.

The commercial division of the high court presided over by astute judge David Wangutusi will on 26th August 2019 give a landmark ruling in a case where Bank of Uganda accuses Dr Ruparelia and Meera Investments company of swindling Shs397 billion from  the defunct Crane Bank Limited (CBL).

Victoria University

Sudhir denied the allegations and counter-sued BoU seeking $8m compensation in damages for breach of contract.

It should be emphasized that before placement of cbl into receivership, Dr Sudhir was no longer the majority shareholder in Crane Bank having sold 47% of the banks shared to Kenyan businessman Mr Rasik Kantaria (Chairman Prime Bank ltd) who later transferred his shares to White Sapphire Ltd, a company incorporated in Mauritius.

 BoU argued that Crane bank posed a systemic threat to the bank in sector, an allegation that has never been substantiated to date.

Dr Sudhir through his apt lawyers of Kampala Associate Advocates (KAA) has rightly argued before the commercial court that Cbl under receivership had no mandate to sue.

“BoU chose to go for receivership. Under the law, specifically only the manager and the liquidator can sue. A suit cannot be filed by the receiver,”Argued Dr Ruparelia through his lawyers of KAA.

Dr Ruparelia further opined that when dissolving a bank, BoU had three options. It can put someone in management in what is called statutory management, receivership or liquidation and it chose to go for receivership. Under the law, specifically, only the manager and the liquidator can sue. The case cannot be filed by a receiver.

He added, “The functions of the receiver are four. They are listed in the law. They mainly revolve around selling the financial institution. The receiver cannot be sued for that act and he cannot sue anyone. His action is protected by law so he cannot be sued for any decision he makes as a receiver. Similarly, he cannot sue anyone,”

The breached Confidential Release and Settlement Agreement (CSRA) between Sudhir and BoU

Between 29th January and 20th March both parties had a series of meetings to amicably resolve the dispute which culminated in entering into a CSRA on 20th March.

Clause 6 of the agreement which states that, “This confidential settlement and release agreement is in full, complete and final settlement of all claims that either party (or related parties or shareholders) may have against the other, and each of Bank of Uganda and Crane Bank Limited hereby fully and finally releases and forever discharges and shall refrain from instituting, directing, procuring, instigating or maintaining all or any actions, claims, sanctions [whether administrative, civil or criminal in nature].”

t should be noted that Dr  Sudhir entered into the CSRA not conceding claims against him but to avoid delay, inconvenience and uncertainty of protracted legal proceedings as stated in the document.  

Clause G of the agreement provides that, “This confidential settlement and release agreement is neither an admission of fact nor liability by Sudhir Ruparelia in connection with the covered conduct or a concession or acceptance by Sudhir Ruparelia that he would not have any well- founded defences to the claims and demands made by BOU in connection with the covered conduct or a waiver of any advocate-client privilege which he or his advisers would benefit from.”

Under Clause 7 of the CSRA, both parties specifically agreed not to sue each other in Uganda or any other jurisdiction.

Under the CSRA Clause 3.1, the counterclaimant (Sudhir) would pay a total of $60m partly in cash and partly in surrender of property. In return, BoU would release loans totaling to Shs63.6 billion and release all securities to those loans to him.

Breach of the CSRA will be the preliminary defence during the trial.

“At trial, the defendants shall raise a preliminary point of law to the effect that the CSRA is a complete bar or estoppels to the filing of any suit by the plaintiff against the defendants and further that, by the executing of the CSRA, the plaintiff is stopped from bringing the instant suit, the suit is barred in law, is in breach of contract and one of the remedies listed in the plaint are available to the plaintiff by virtue of the CSRA,” Sudhir contends.

By instituting a suit against Ruparelia, BoU acted in breach of the CSR and this is why Dr Ruparelia demands for Shs28 billion in damages for breach of contract.

The author is a current affairs analyst and aspiring MP Ikiiki County.



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