Court Bans Two Prominent City Law Firms From Crane Bank Cases For ‘Conflict’ Of Interest

Commercial Court Judge Justice David Wangutusi on Tuesday ordered law firms, MMAKS Advocates and Bowmans AF Mpanga Advocates to stop representing any entity seeking legal action against defunct Crane Bank Ltd (CBL) formerly owned by Fobes Magazine ranked East Africa’s richest man Dr.Sudhir Ruparelia.

The ban means that dfcu Bank as the successor of Crane Bank, can suffer all previous liabilities inherited from Crane Bank provided the victims of these liabilities were never privy to the Purchase of Crane Bank Assets & Liabilities, a source privy to the matter told our reporter.

“This dfcu stands a big risk and could lose the case in which 400 former Crane Bank staff sued it. Even the cases brought by Meera against dfcu now stand a very high chance,” the source said.

MMAKS Advocates is led by Timothy Masembe Kanyerezi whereas Bowmans AF Mpanga is led by David Mpanga.

Masembe and Mpanga were first barred from representing Bank of Uganda (BoU) in 2017 by the same Judge following Sudhir Ruparelia’s petition. Sudhir was the majority shareholder.

In his application, Sudhir stated that the two lawyers were witnesses in his defence having worked for him and therefore are not qualified to represent Crane Bank (liquidated), which had sued him.

Sudhir wanted the lawyers disqualified from the case. He contended that if the two law firms are allowed to handle the case, it will be breach of trust since they are already privy to information that can prejudice the trial.

The judge agreed with the property mogul that there was conflict of interest having represented him for more than a decade.

Justice Wangutusi said there was certainly confidential information divulged which can prejudice the case before the commercial court.

Meanwhile, the two law firms are currently under scrutiny after the Central bank officials last week failed to defend over Shs4 billion litigation fees paid to the advocates for external legal advice during Crane Bank (CBL) sale.

BoU sold Crane Bank to dfcu in January, 2017 at Shs200 billion, and on credit.

According to reports from the Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) sitting last week, MMAKS Advocates and AF Mpanga were paid Shs914.2bn for legal advice during CBL intervention, resolution and advice on the sale of CBL assets and assumption of liabilities.

The firms would further be paid extra Shs3 billion as 5% commission on monies recovered from CBL shareholders.

But recently, the former Executive Director Bank supervision at BoU, Justine Bagyenda, who was appearing before Cosase failed to explain how the law firms were hired and why they worked without terms of reference as well as not having minutes of the meetings relating to the work the lawyers were to do in regard to the liquidation and sale of Crane Bank.

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