21 December 2017

Uganda: Court Kicks BOU Lead Lawyers Off Sudhir Crane Bank Case

The lawyers who prepared the case against Sudhir Ruparelia, in which Bank of Uganda accuses the property mogul of stealing Shs 400 billion from Crane bank, can no longer represent the central bank in the case.

The direct involvement of BOU lawyers Timothy Masembe Kanyerezi (MMAKS Advocates) and David Mpanga (AF Mpanga/Bowmans) respectively, in the case has ended after Justice David Wangutusi, the head of the Commercial court, agreed with Sudhir that the duo were too conflicted to be lawyers in this particular case.

In his September application Sudhir argued that the two lawyers should be kicked out because they represented Crane bank until October 20, 2016, when BOU took over its management and thus the law firms shared confidential information with the central bank.

In response to this charge both Masembe and Mpanga didn't deny that over the years they have represented Crane bank. But their point of departure was that they were not conflicted since they represented Crane bank which is a separate entity from Sudhir, who has been sued as an individual in this current case.

Justice David Wangutusi didn't buy the two lawyers' defence. The Achilles-heel for Masembe and Mpanga, according to Justice Wangutusi, was in the very way they drafted the main case against Sudhir. In their main pleadings, the lawyers acting on behalf of BOU, accused Sudhir not only of being the sole owner of Crane Bank which is against the Financial Institutions Act but also running the bank on his whims, suggesting that he was running its day-to-day activities.

Justice Wangutusi then found it strange that the lawyers diverted from that argument when they defended themselves once Sudhir accused them of conflict of interest, passionately arguing that they got instructions "from neither Crane bank not Sudhir".

"The meaning of this, is that Crane bank and Sudhir were one and the same person," Justice David Wangutusi noted adding, " So going by that it means that there was a fiduciary relationship between the applicant [Sudhir ] and first (Masembe) and second (Mpanga) respondents."

Justice Wangutusi, whose ruling was read for him by Nakawa chief magistrate Lilian Buchana, agreed with Sudhir's lawyers Kampala Associated Advocates (KAA) that perhaps during interactions between him and the two lawyers, Sudhir could have confided to them information which they could use against him in this case.

In the bid to have Masembe and Mpanga kicked out of the case, Sudhir contended that the duo cannot prosecute him because he has listed them as his witnesses. In response, Mpanga argued that this would amount to conscription of lawyers akin to what warlord Joseph Kony was doing in Northern Uganda for some years. Nevertheless, Justice Wangutusi agreed with Sudhir that Mpanga specifically was a compellable witness since he was the architect of and signatory to the Confidential Settlement and Release Agreement (CSRA). Under the CSRA which is now under contention in the main case, Sudhir paid BOU US$8m purposely to get back his bank.

Justice Wangutusi said that Mpanga ought to have known better that once he signed the agreement he stopped being just a lawyer and became a potential witness.

"Evidence has be laid showing Mpanga was heavily involved in the negotiations of the agreement; it should have been good to think that he would likely...be witness," Justice Wangutusi ruled, "if the agreement is contested in court."

After the ruling, Moses Adriko, a senior partner in MMAKS advocates, indicated that they are going to file a notice of appeal at the court by close of business today.

"We pray that typed record of proceedings is availed and the ruling is availed to us because we are going to appeal this ruling," Adriko, who represented Masembe who was not in court, said.

David Mpanga, at press conference held at his law chambers in Nakasero the same day, reiterated Adriko's point that an "appeal" is in the offing.

"Cases in court are determined by precedents," Mpanga said," And this ruling cannot stand because it wouldn't be good for practicing lawyers."

The focus of the public, according to Mpanga, should more on "why Crane bank was closed and who is responsible for the closure."

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