In what has been a protracted legal dispute between Crane Bank Limited (CBL) and dfcu Bank Limited, the Court of Appeal of England delivered its much-anticipated judgment on July 26, 2023. The case, known as Claim No. CL-2020-000859, centers on the sale of certain assets and liabilities of Crane Bank to dfcu Bank by the Bank of Uganda (BOU) in December 2020.
The core issue of the case lies in CBL’s contention that the transaction was not conducted according to established legal norms, and dfcu Bank’s challenge to the jurisdiction of the English courts to hear the claim. dfcu had argued that BOU’s actions were an exercise of Uganda’s State authority under the Financial Institutions Act, and thus, the English courts should not intervene.
Initially, the English High Court ruled in favor of dfcu Bank, stating that the English courts lacked authority to hear the claim based on the above grounds. However, the recent development occurred when CBL appealed the decision, and the Court of Appeal reached a different conclusion.
The Court of Appeal opined that while dfcu and others might be right in their assertion, the matter is not suitable for a jurisdiction challenge. Instead, the court suggested that the issue of whether BOU’s acts were of a commercial nature or involve public policy considerations should be resolved through a full-fledged trial, rather than at a preliminary stage.
It is important to note that the Court of Appeal did not make any judgments on the underlying facts of the case or the merits of the claim itself. The appeal was confined to addressing technical legal questions pertaining to jurisdiction.
As a consequence of the Court of Appeal’s verdict, the case will now proceed to a trial stage, where the trial judge will delve into the factual allegations and make a determination based on the evidence presented by both parties.
dfcu Bank, dfcu Limited, and other parties to the dispute have the right to seek permission to appeal the Court of Appeal’s decision to the UK Supreme Court. dfcu has confirmed that it reserves the right to pursue this option.
Despite the ongoing legal battle, the management at dfcu remains focused on its core business and strategic objectives. The bank maintains a strong financial position, with capital ratios exceeding 12%, placing it among the top five most capitalized banks. Additionally, dfcu has been profitable, paying dividends to shareholders and enjoying robust shareholder support from entities like Arise BV, Danish Investment Fund (IFU), National Social Security Fund, and Kimberlite, among others.
dfcu Bank has a longstanding presence in Uganda since 1964, and its operations continue to run smoothly, fulfilling its purpose of transforming lives and businesses in the country. The bank’s solid management team remains committed to its strategic goals.
As the legal proceedings progress, stakeholders in both Crane Bank and dfcu Bank eagerly await the outcome of the trial, as it could have implications for future financial transactions and regulatory frameworks in Uganda and beyond.
