London Court rejects application for security deposit in Crane Bank case

The High Court of Trade and Property in England and Wales, King’s Bench Commercial Division, dismissed an application by dfcu Bank seeking to compel Crane Bank to deposit security for the costs in court.

The purpose of Crane Bank and its shareholders depositing the security for the costs was that there would be a reversal if they lost the ongoing case in London of around Shs825b.

But chief judge Stephen Hofmeyr KC said in his preliminary ruling that Crane Bank and its shareholders, including businessman Sudhir Ruparelia, had put their financial strength to court to pay the costs of the case if they lost the legal battle against dfcu Bank. Therefore, there is no need to direct them to first deposit security for the costs with the court.

“While it is theoretically true that there is no certainty as to the future value of his assets (Mr Ruparelia’s assets), the same can be said for any party and any asset. Moreover, given the size of the second claimant’s fortune, it is only possible, in extraordinary circumstances, that by the end of these proceedings his assets will have been exhausted and that he will not be able to promptly pay any costs order eventually made against him. On October 30, Judge Stephen delivered his decision.

Annexure: “It is alleged that some of the assets of the second plaintiff are illiquid and some are inaccessible because they are jointly owned. Based on the evidence before me, I do not find the allegation credible. The evidence persuades me that there are good reasons to believe that the second plaintiff (Mr Ruparelia) would be able to pay the defendants’ costs forthwith if so ordered. None of these six claims undermines my conclusion based on the totality of the evidence. If a costs order were to be made against the plaintiffs, I believe that the second plaintiff (Mr Ruparelia) would be able to pay it immediately. “For the reasons I have stated, their security applications have been rejected.”

The London case is between Crane Bank Ltd, Mr Ruparelia, Ms Jyostsna Ruparelia, Ms Meera Ruparelia, Mr Rajiv Ruparelia, Mr Tom Mugerwa and Ms Sheena Ruparelia against dfcu Bank Ltd, dfcu Ltd, Mr Jimmy Mugerwa, Mr Juma Kisaame, Mr William Sekabembe . , CDC Group PLC, Norfinance AS, Rabo Partnership BV, Mr Stephen Caley, Mr Michael Alan Turner, Mr Albert Jonkergouw, Mr William Cramer, Mr Ola Rinan and Mr Deepak Malik.

The rejection of the application for security costs now paves the way for the main case to be heard in London at a later date.

Court documents show that this dispute relates to events surrounding the takeover, closure and sale of assets and liabilities of Crane Bank, a major local bank in Uganda, by the Central Bank.

Crane Bank and its shareholders allege that, beginning in 2016, senior Ugandan government officials and Bank of Uganda officials engaged in a corrupt scheme to gain control of Crane Bank through the improper use of legal and regulatory powers, which they then sold off. uses its assets for their benefit.

Additionally, court documents show that dfcu Bank participated in the corrupt scheme by acting as its buyer, as the purchaser of Crane Bank’s assets from the Federal Reserve, and that the value of the purchase was too low.