In a significant legal setback, DFCU Bank has lost its case in the Commercial Court of England and Wales, where it sought to secure financial safeguards against potential costs in its ongoing litigation with Crane Bank.
The High Court ruling came after DFCU, along with other defendants, requested that Crane Bank and its co-claimants, including prominent Ugandan businessman Dr. Sudhir Ruparelia, provide security for legal costs in the event of a loss.
The case, overseen by Mr. Stephen Hofmeyr KC, hinged on DFCU’s argument that Crane Bank and its shareholders might not be able to pay the defendants’ costs should they be unsuccessful in the broader case.
This lawsuit centers on allegations by Crane Bank that senior officials within the Ugandan government, in conjunction with the Bank of Uganda, orchestrated a scheme to seize control of the bank and subsequently sell it to DFCU at a gross undervalue.
Despite DFCU’s claim that security for costs was necessary, the court dismissed their application, ruling in favor of Crane Bank. In his judgment, Mr. Hofmeyr KC highlighted the substantial financial resources of Dr. Ruparelia, who offered a personal guarantee to cover any potential costs awarded against the claimants.
Court documents revealed that Ruparelia’s assets, valued in the hundreds of millions, include both Ugandan and UK-based properties, further assuring the court of his ability to meet any cost obligations.
“The second claimant, Dr. Ruparelia, is a person of very considerable wealth,” noted Mr. Hofmeyr in the ruling. “This is an exceptional case, and there is no justification for an order for security for costs against him or the other claimants.”
Additionally, the court took into account the claimants’ history of promptly settling previous costs orders during the litigation process, further undermining DFCU’s argument that financial security measures were necessary. The judge also found that indemnities provided to some defendants by the Bank of Uganda did not constitute grounds for additional security from the claimants.
This ruling marks a major defeat for DFCU, as it not only denies the bank a financial safeguard but also reinforces the commitment of Crane Bank and Ruparelia to see the case through. The litigation continues to draw attention due to the serious allegations surrounding the takeover and sale of Crane Bank’s assets, which remain at the heart of the claimants’ case.
For DFCU, the court’s decision adds pressure in the ongoing legal proceedings as both parties prepare for the next phase of this high-stakes dispute.
