Dr. Sudhir Ruparelia secures a significant victory as the Court of Appeal in London finds DFCU liable for fraudulently acquiring Crane Bank. The ruling is a unanimous decision by all three judges of the Court of Appeal. Additionally, the court recommends the prosecution of Bank of Uganda officials involved in the transaction for corruption.
The Court of Appeal’s judgment overturns an earlier ruling by a lower court, which had absolved DFCU bank and its shareholders of any wrongdoing in the acquisition of Crane Bank. The court supports Dr. Sudhir Ruparelia and seven other applicants’ claims that DFCU bank and its shareholders utilized a corruption scheme involving Bank of Uganda officials to take over Crane Bank Limited.
The ruling also addresses the issue of jurisdiction, as the lower court had declared that it lacked the authority to hear the case in London. However, the Court of Appeal quashes this decision, recognizing Dr. Sudhir’s claim of £170 million in damages.
The Court of Appeal from the High Court of Justice Business and Property Courts in England issued a judgment quashing an earlier decision by the lower court that had exonerated DFCU bank and its shareholders from fraudulently taking over Crane Bank.
According to the Court of Appeal, there is substantial evidence to support Sudhir Ruparelia and seven other applicants’ claims that DFCU bank and its shareholders engaged in a well-crafted corruption scheme with the officials of Bank of Uganda to acquire Crane Bank Limited (CBL).
Furthermore, the Court of Appeal recommends that Bank of Uganda officials involved in the transaction should face prosecution for their alleged corrupt actions.
This ruling comes after a previous judgment by the High Court of Justice of England and Wales on October 19, 2022, where Judge Pelling QC sitting in London had absolved both DFCU and Bank of Uganda of any wrongdoing in a $211 million litigation.
The lower court’s ruling was based on the grounds that there was no serious issue to be tried and that it lacked jurisdiction to hear the appellants’ claims against the respondents. The Judge had rejected the appellants’ arguments that their claims might fall within one or more exceptions to the foreign act of state rule.
In contrast, the Court of Appeal’s three judges, including Justice Phillips, Justice PoppleWell, and Sir Julian Flaux, ruled that the High Court should have acknowledged that there were serious issues to be tried. They held that the sale of Crane Bank by Bank of Uganda to DFCU was commercial rather than sovereign in character, and the acts in question were engaged in combating and not giving legal protection to bribery and corruption, thereby falling outside the foreign act of state rule (“the Public Policy Exception”).
As a result, the Court of Appeal ruled in favor of Dr. Sudhir Ruparelia, recognizing the validity of the claims against DFCU and the alleged involvement of Bank of Uganda officials in the acquisition of Crane Bank.
“I would allow the appeal on the ground that there are serious issues to be tried as to whether part or all of appellants’ claims fall within the Commercial Activity Exception and/or the Public Policy Exception,” stated LORD JUSTICE PHILLIPS in the ruling.
Consequently, Dr. Sudhir Ruparelia and other appellants seek damages in excess of £170 million for conspiracy to injure by unlawful means and/or an account of profits alleged to have been made by the respondents through their dishonest assistance in the corrupt scheme or equitable compensation. The appellants further assert that DFCU Bank is liable to account for sums received on the basis of knowing receipt of assets transferred in breach of fiduciary duty. It is agreed that all these claims are governed by Ugandan law.
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