Dfcu Bank, conceded, recruits new lawyers after court banned Sebalu & Lule Advocates in Sudhir Ruparelia case

By Our Reporter

Dfcu Bank has finally excluded lawyers of Sebalu, Lule and Company Advocates from representing the lender in the case filed against it (DFCU) by businessman Sudhir Ruparelia’s real estate and property management firm, Crane Management Services Limited that manages properties of Meera Investments Limited, also of Ruparelia Group of Companies.

Dfcu Bank has recruited new lawyers of Kampala law firm M/S Kalenge, Bwanika, Ssawa & Co Advocates, according to the notice of change of advocates dated November 20, 2019 and presented to court. The new law firm will now handle legal matters of the bank as it tussles out with Sudhir’s companies.

The High Court on April 29, 2019 declared Sebalu & Lule Advocates as conflicted, and therefore unfit to represent the dfcu Bank in a longstanding a commercial dispute with Sudhir’ companies.

Court agreed with Crane Management Services that the lawyers had relevant information concerning Crane Management Services having participated in the review of its tenancy agreements.

“The Applicant has made out a case that the first respondent has relevant information of the applicant. The information is relevant and I accordingly grant an injunction restraining the first respondent from handling any case involving the applicant”.

Crane Management Services sued dfcu Bank demanding rental arrears amounting to Shs2.9b and $385,728.54 in respect of tenancies of suit properties that were formally owned by Crane Bank Ltd.

In the suit, Crane Management Services contended that when dfcu Bank took over management of Crane Bank Ltd, it illegally took possession of the rental facilities from which the real estate company seeks to recover its arrears.

However, in defence, dfcu Bank contracted the Law firm of Sebalu & Lule Advocates but Mr. Ruparelia says he contracted the same law firm in 2006 to draw and review tenancy agreements in respect of the said rental premises thus there is conflict between the lawyer and his client.

The company also asked the court to issue a permanent injunction, restraining Sebalu & Lule Advocates from appearing as defence counsel for dfcu Bank in the other court case that the two principals are battling out.

According to Section 4 of Advocates Act  regulations, an advocate shall not accept instructions from any person in respect of a contentious or non-contentious matter if the matter involves a former client and the advocate as a result of acting for the former client is aware of any facts which may be prejudicial to the client in that matter.

Recently it was revealed Sebalu and Lule Advocates misadvised dfcu Bank that it could take over Meera Investment Limited properties which had been leased to Crane Bank Limited before dfcu Bank to some assets of the latter over two years ago.

The transaction between dfcu Bank and the Bank of Uganda (BoU) has turned sour  after former realised that it could not take over the freehold Meera Investment properties. The lender now wants Shs47 billion from BoU as compensation for the loss of the properties that it intends to vacate in the near future.