Following months of protracted legal fists, the head of the commercial Court, justice David Wangutsi disqualified lawyers Timothy Masembe Kanyerezi and David Mpanga from representing Bank of Uganda over conflict of interest having conceded to being Sudhir Ruparelia’ s lawyers for 12 years.
This was in a ruling delivered by Commercial Court Registrar Lillian Bucyana on behalf of Justice David Wangututsi.
In his ruling read to court by deputy registrar Lillian Buchana , justice Wangutusi said the lawyers might be required as potential witnesses to settle the current dispute between Bank of Uganda and Sudhir Ruparelia for being involved in negotiations , drafting and witnessing of agreements before Bank of Uganda took over Crane Bank in October 2016.
Having earlier been lawyers to Sudhir, the ruling stated that alot of information must have flown between them henceforth conflict of interest may not exist but secrecy may be broken.
“Mr. Mpanga negotiated and drafted the Confidential Settlement Agreement. The Settlement Agreement however, developed disagreements. The moment Mpanga drafted the agreement he should have known that this was part of the assignments with the applicant. And therefore his status as a potential witness is known,” the judge held.
The duo was thus disqualified from the main suit.
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.”
In September, Sudhir protested the representation of BOU by the two law firms that were initially his lawyers, citing conflict of interest in a case in which he is accused of defrauding Crane bank of close to Shs400 billion.
He argued that their presence as BOU lawyers will deny him a fair trial and justice since the two law firms “are in breach of advocate–client relationship because Timothy Masembe Kanyerezi, the managing partner of MMAKS Advocates, and David FK Mpanga, a senior partner in AF Mpanga Advocates 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”.
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.”