The UK Court of Appeal referred an action made by Crane Bank to the UK High Court in order to decide whether the UK High Court has jurisdiction to rule on the transfer of Crane Bank's assets and liabilities to DFCU. Crane Bank claimed that the sale of its assets and liabilities to DFCU was illegal and filed a challenge in the UK High Court. The referral by the UK Court of Appeal emphasizes the necessity of determining whether the UK court has the power to rule on this case.
The case was launched by Crane Bank and its patrons against DFC Ltd. Sir Julian Flaux investigated the situation. Lord Jusice Popplewell, Lord Jusice Phillips, and the High Court Chancellor
Background
In 2017, the Bank of Uganda took over Crane Bank and sold its assets and liabilities to DFCU. Crane Bank sued DFC in the United Kingdom over this. DfCU successfully argued before the UK High Court that the UK court lacks jurisdiction to hear the matter. Crane Bank filed an appeal with the court of appeals in response to this verdict.
Crane Bank and its shareholders launched the lawsuit against DFC Ltd. and several of its directors and shareholders before Sir Julian Flaux, Chancellor of the High Court, Lord Jusice Popplewell, and Lord Jusice Phillips.
The court upheld two previous high court findings that the Bank of Uganda was a sovereign organization carrying out its official duties beyond the jurisdiction of UK courts. However, the court said that it had sufficient evidence to determine on whether the sale was merely commercial or if it violated public policy, sending these questions back to the high court for interpretation.
Dfcu said that they retain the right to file an appeal with the Supreme Court but would decide on their future steps after consulting. "This poses no threat to the bank's stability or ability to serve its clients," DFCU Ltd. CEO Charles Mudiwa said after the verdict at a news conference. He said that the bank was fully capitalized and was one of the first to fulfill BOU's new capitalization standards, which increased the minimum paid-up capital to Sh120 billion from Sh25 billion before.
Sudhir Ruparelia, the founder and majority shareholder of Crane Bank, was eager for his day in court. "It is clear that the DFCU will face a full trial for conspiracy, fraud, and corruption for their involvement in the sale of Crane Bank assets," Ruparelia told New Vision. "We want this matter to be over and done with. It will serve as a message to all those who collude to unlawfully seize people's property."
Crane Bank was closed down by the Bank of Uganda because depositor money was in jeopardy and the bank had become technically insolvent.