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Judge orders Sudhir-BoU case back in court after negotiation stalls

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BUSINESS | Businessman Sudhir Ruparelia and Bank of Uganda will have to tussle it out in court starting next month after failing to strike a common ground in mediation talks, court has said.

The central bank accuses property mogul Ruparelia of stealing about Shs400 billion from defunct Crane Bank and the two parties had been scheduled for mediation but Justice David Wangutusi, the head of the Commercial Court Division, has decided that the two parties should face it out before court instead after a deadlock in the window offered.

When both parties reconvene in Justice Wangutusi’s court on November 21, the judge will first seek to determine about three preliminary applications.

Sudhir‘s application in which he wants court to dismiss BoU’s defence to his counter suit will be heard first. Sudhir insists the BoU defence to his counter record was filed out of time.

When he filed his defence on August 3, 2017, against a BoU suit accusing him of stealing over Shs400 billion from Crane bank, Sudhir also filed a counter claim against the central bank in which he demanded $8 million.

However, he now wants this victory without a protracted legal fight since BoU didn’t respond to his counter claim within 15 days from the date of service.

Another preliminary application that Wangutusi will entertain will be BoU’s in which the central bank wants the court to give it waiver to file its defence out of time.

Though now it’s making a formal application, last year BoU’s lawyers had tried to explain the delay to respond by accusing Kampala Associated Advocates (KAA), who are Sudhir’s lawyers, of repeatedly refusing to serve AF Mpanga Advocates who were part of its legal team, despite earlier protests.

Change of lawyers

In the new arrangement, BoU will be represented by Sebalu and Lule Advocates, one of the oldest law firms in Uganda.

The firm was brought on board after Justice Wangutusi last year kicked BoU lawyers Timothy Masembe Kanyerezi (MMAKS Advocates) and David Mpanga (AF Mpanga/Bowmans) out of the case having agreed with Sudhir that the duo were too conflicted to be lawyers in this particular case.

Though there has been an impasse in the mediation talks, Justice Wangutusi has still given the parties up to December exhaust that avenue as he deals with the preliminary matters.

He hopes that by December 15 they would have conclusively determined that mediationof the main case has worked or not.

Though Wangutusi still insists on settling the case out of court, mid this year Principal Judge Yorokamu Bamwine, who now acts as the mediator in this case, sent the file back to the trial judge.

He was frustrated by lack of interest from either party in the mediation process.

In a July 17, 2018 letter, Justice Bamwine wrote: “I am inclined to forward the file to you (Justice Wangutusi) without the input of the parties but with information to them through counsel to be kept there until such a time when they will be ready to proceed and they move you to forward it this way again with a fresh mandate under the rules or otherwise. Please accept the mediation file back that way.”

The case

One of the charges BOU has against Sudhir is to the effect that when he was still Crane Bank owner, the bank paid US$10.2 million for the core banking system software and other attendant software services between 2003 and 2015.

Apparently, at least $9.2 million out of $10.2 million was paid in 2013 to Technology Associates Group Limited, a Dubai-registered company related to Technology Associates Limited in Uganda.

The Dubai Company and its Ugandan affiliate, according to BOU, are run by Nair Girisch, a business associate of Sudhir.

The embattled tycoon says the central bank was until 2014 a director and shareholder in Technology Associates.

The bank allegedly paid other companies for upgrades and software that were not installed. In response, Sudhir said BoU in its onsite examination report of May 2013 asked Crane Bank to upgrade its core banking software to fully support its operation before December 31, 2013.

Consequently, the Crane bank Board in its meeting of September 4, 2013 resolved that management engages listed software vendors to get: Temenos, Infosys, Tata and Polaris.

Technology Associates then made a proposal to Crane bank on October 21, 2013, and the role of the company, according to Sudhir, was to provide the software and manage the migration from a distributive system to a core banking system.

On October 28, 2013, Sudhir said, Crane Bank’s then managing director A.R Kalan wrote to the board and sought its approval to purchase T24 software from Technology Associates for the sum of $5,940,172 for Uganda and $1,300,000 for Rwanda.

Sudhir said he was not and has never been a shareholder or director of Technology Associates or any of its companies or subsidiaries as alleged.

To prove that he is not a shareholder in Technology Associates, the businessman said he will rely on documents from various company registries.

Justice Wangutusi has warned that in case the parties don’t resolve the case through mediation, when he determines the case the losing party will pay “ a very heavy price.”

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