Sudhir can sue dfcu bank in London, UK Court of Appeal rules 

The Court of Appeal in the United Kingdom (UK) has ruled that the High court of England has the jurisdiction to hear the Shs 800 billion claim filed by Ugandan businessman Sudhir Ruparelia against Dfcu Bank Limited over the purchase of Crane bank.

The ruling was handed down on July 26 under case number, CA-2022-002042, by chancellor of the High court, Sir Julian Flaux, Lord Justice Popplewell, and Lord Justice Phillips. The court stated that there were serious issues to be tried, as they consider the transaction a commercial activity that deserves a hearing in accordance with public policy. 

The judgment follows an appeal by Crane Bank Limited, Sudhir Ruparelia, Jyotsna Ruparelia, Meera Rupareliac, Rajiv Ruparelia, Tom Mugenga, and Sheena Ruparelia against dfcu bank and other shareholders, regarding a previous decision by the High court which stated that the English courts have no authority to hear the claim brought by Crane bank and its shareholders.

This ruling is part of a series of legal battles pursued by the Ugandan businessman and billionaire since 2016 when the Bank of Uganda (BoU) placed Crane bank under a statutory instrument. Crane bank alleges that Dfcu, its executives, and financiers, including one based in the UK, colluded with BoU to fraudulently take over its assets.

They claim that Dfcu purchased their assets and liabilities for far less than the market price. The judges argued before the Court of Appeal and agreed that English courts have the authority to hear the case. They emphasized that the involvement of the Bank of Uganda in the takeover does not prevent the case from being resolved in England.

The primary contention centred on whether English courts can adjudicate actions involving sovereign governments like Uganda. Crane Bank Limited was one of Uganda’s largest commercial banks until 2016. It was regulated by the Bank of Uganda (BoU).

In 2016-2017, the BoU took over the management of Crane bank, closed it, and sold off some of its assets and liabilities to Dfcu over alleged fraudulent financial activities. Crane bank and some of its shareholders argue that this sale, along with various side agreements, was conducted at a gross undervalue as part of a corrupt scheme carried out by the BoU using its statutory and regulatory powers.

The claimants allege that the defendants participated in an unlawful means conspiracy, provided dishonest assistance in breach of trust and fiduciary duty, and engaged in unconscionable receipt. The claims are valued at over £170 million (approximately Shs 803 billion).

Crane Bank began its operations on August 21, 1995, with the goal of becoming the largest privately owned Ugandan bank. It was a significant financial services provider in Uganda, with assets of Shs 1.81 trillion and shareholders’ equity of Shs 281.43 billion as of December 31, 2015. The bank had over 750,000 customers by October 2015.

In September 2012, Crane bank acquired the assets and part of the liabilities of the National Bank of Commerce, a small indigenous financial services provider in Uganda that had lost its banking license. Additionally, on January 30, 2014, Crane Bank established Crane Bank Rwanda Limited, a wholly-owned subsidiary with the first branch in Rwanda, which opened to customers on June 30, 2014.