Following a high court ruling last December, stopping private lawyers Timothy Masembe Kanyerezi of MMAKS Advocates and David Mpanga of Mpanga-Bowmans from representing Bank of Uganda in the Crane bank case over conflict of interest, top BoU officials are reportedly on a collision course over whether the central bank should appeal the ruling.
Tycoon Sudhir Ruparelia successfully appealed against Masembe and Mpanga representing BoU in the landmark Shs400bn case over conflict of interest, because they had been his lawyers for over a decade. Now some senior officials in the Central Bank’s legal department are against the idea of an appeal financed by the bank.
In a statement issued shortly after the ruling, BoU indicated it would appeal against the ruling. But according to sources, several meetings held between officials of the legal and supervisory departments and other senior directors, in a bid to file an appeal on time have aborted or failed to yield any agreeable position.
This, the sources said, is because the BoU Director of Legal Department Ms Margaret Kasule insists that lodging an appeal in a case where BoU wasn’t a party will complicate the main suit that involves the Central Bank and Crane Bank, when the two sides are likely to start negotiations.
“We were not part to this suit involving ‘conflicted’ lawyers and therefore, our appeal will be more of trying to help the lawyers and yet we are ex-party,” Ms Kasule is quoted by an online publication.
It is reported that Deputy Governor Dr Louis Kasekende initially supported the idea of appealing but has reportedly since dropped the idea.
However, the sources said Ms Justine Bagyenda, the Director Supervision, has reportedly stuck to her guns of having BoU file an appeal and that she wants lawyers Mpanga and Masembe retained as counsel for the main suit. Nonetheless, the argument is being resisted by the legal department on grounds that the BoU and Crane Bank have already agreed for negotiation.
It should be recalled that in the ruling delivered by Commercial Court Registrar Lillian Bucyana on behalf of Justice David Wangututsi, the Judge said the continued representation of the BoU by Masembe Kanyerezi and Mpanga would defeat the importance of secrecy because both lawyers knew that there existed a ‘substantial relation between the applicant and them’.
“A lot of information must have flown between them; conflict of interest may not exist but secrecy. 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,” Ms. Bucyana said.
Sources say Dr Ruparelia insists he cannot hold negotiations with BoU when the ‘conflicted lawyers’ are part of the team.
Dr. Ruparelia is on record to have said that ‘some people in BoU’ want the two lawyers on the main suit just to share the legal fees.