Lawyers to walk to the bank smiling as Bank of Uganda continues to make one mistake after the other in its fight for Crane Bank spoils with former owner billionaire Sudhir Ruparelia.
The story of Crane bank massacre was well explained in the parliamentary probe which wound up its hearing early 2019, concluding that Bank of Uganda should compensate Crane Bank owners for closing the bank in error. This followed the audit by the Auditor General which found BoU bosses acting with impunity in closing six other commercial banks in the last couple of years.
Now courts of law are also faulting BoU for lacking good legal advice in handling the matter to its conclusion.
Justice David Wangutusi ruled that the central bank pays Sudhir all legal costs incurred in the case he dismissed on August 26 2019. BoU is bound by the ruling to settle any legal fees in accordance with the law governing remuneration of advocates.
The amount will even double if the threat to appeal by Bank of Uganda lawyers comes to pass.
The biggest winners therefore in the case the Commercial court dismissed against the billionaire are lawyers, not necessarily Mr Ruparelia, or, Bank of Uganda per se.
Judge Wangutusi’s ruling which was read by deputy registrar Festo Nsenga stated clearly that at the time of filing the suit in January 2017, Crane bank was a non-existent entity since it had gone into receivership after it sold its assets to DFCU Bank in October 2016. One wonders what’s there to appeal when the law is in black and white.
In 2017 Bank of Uganda accused and sued Sudhir of carrying out transactions and land titles totaling to Shs 397 billion out of Crane Bank before it was closed and taken over by DFCU bank. They Ruparelia Group chairman challenged the suit in court.
He also took on the lawyers who were representing BoU, who he said were “conflicted”. In his ruling delivered in December 2017, Wangutusi stated that David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations. Section 4 of the regulation provides that an advocate shall not accept instructions from any person in respect of a contentious or non-contentious matter if the matter involves a former client and the advocate as a result of acting for the former client is aware of any facts which may be prejudicial to the client in that matter.
In the aftermath of the Monday ruling, many people are wondering how much Bank of Uganda will pay for losing cases in court to Sudhir lawyers and its own?
The law states that the lawyer’s legal fees amount to 10% of the value of the case before the court.
Let’s come to the breakdown.
In the High court, trusted sources say Sudhir could have used up to USD5m(ugx18.4 billion), while Meera Investments used another USD5m. The cost of the high court award is USD10 million which is equivalent to UGX 36.86 billion.
If Bank of Uganda, goes to the Court of Appeal as it is rumored, and goes ahead to lose there too, the tax payer will even incur more losses. However, like it was in the beginning of Crane Bank closure, it is lawyers going to the bank smiling.
Analysts say, Sudhir and Meera Investments could use up to USD10m each on lawyers, totaling to Shs20m (sh73.72 billion) in the court of appeal. And since Bank of Uganda is also hiring external lawyers, it is clear they are footing equally same amounts.
If the USD20 million award is added to the High court award, it will come to a total of Shs30m (ugx110.58 billion), of the taxpayer’s money.
That is almost a third of the total amount contested by Mr Ruparelia and Bank of Uganda.
“At the end of the day, the biggest winners in this case are lawyers who keep mis-advising BoU for personal gain”, said Annette Kamala on her twitter.
More Ugandans on social media are already complaining that if Bank of Uganda lost at the high court, there are likely not going to get an overturn at the court of appeal which examines the same evidence, which is a detriment to the tax payer.
“It is clear lawyers want to extort more money from Bank of Uganda”, posted Akiiki Jonah.
Justice David Wangutusi ruled in Sudhir’s favour saying that BoU and Crane Bank wrongfully filed the suit against the tycoon and that the latter had no legal basis since it had no assets to claim.
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