By Mubiru Ivan
Billionaire Sudhir Ruparelia through his Crane Management Services (CMS) company has dragged Kampala city lawyers of Sebalu and Lule Advocates law firm to court. He States they are conflicted.
CMS says that there’s an existing advocate-client relationship with Sebalu and Lule Advocates yet the same law firm is representing an opposing party against them in a court matter where dfcu bank is contesting the ‘irregular’ rent arrears being demanded by the former.
Sebalu and Lule Advocates are also the current external lawyers for Bank of Uganda (BoU).
After acquiring Crane Bank (formerly owned by Sudhir) in 2017, dfcu has since occupied some of the buildings previously occupied by the defunct bank but without remitting rent. The commercial institution adamantly refused to pay on a mantra that the buildings it is occupying are some of the assets it acquired from the BoU when it acquired Crane Bank despite the availability of evidence (land titles) placing Meera Investments Limited as the rightful owners of the buildings in question.
CMS is the lease agent for Meera Investment Limited.
Recently, Sebalu and Lule Advocates filed a defense on behalf of dfcu saying the rent was not only excessive but also “irregular”.
However, according to CMS, they cannot battle with the law firm due to the existing advocate-client relationship.
“In view of the advocate-client relationship between the applicant (Crane Management Services Ltd) and the 1st respondent (Sebalu & Lule advocates), the latter’s continued participation as defence counsel for the 2nd respondent (Dfcu bank) herein, which is the defendant in High Court Civil Suit (HCCS) No. 109/2018 against the applicant/plaintiff, is prejudicial to the applicant’s head suit,” petition filed on Tuesday reads in part.
CMS now wants court to issue a permanent injunction, restraining Sebalu and Lule Advocates from appearing as defence counsel for dfcu in a case that the two principals are battling out.
Background:
In 2017, Sudhir went to the Commercial Court seeking an order to dfcu to return 42 properties currently occupied by the bank.
In that suit, the businessman said dfcu and the commissioner for land registration illegally took possession of his 42 properties, initially Crane bank branches, currently occupied by Dfcu.
In February, 2018, through Meera Investments Limited, Sudhir filed a suit demanding dfcu to pay him Shs 32bn plus interest for breach of tenancy agreements in respect to Plot 38 Kampala road (former Crane Chambers) and Plot 40A on Kampala road.
On account of being the successor in title to Crane bank (in receivership), dfcu expressly inherited all tenancy agreements and, therefore, “assumed the rights and obligations under the tenancies in respect of the suit properties.”
The case stems from a December 16, 2014 tenancy agreement in which Meera Investments let out the basement, ground, 1st, 2nd, 3rd and 7th floor of Plot 38 Kampala road (Crane Chambers) and all of Plot 40A Kampala road to Crane bank for a period of 10 years.
“Under clause 3(c) of the tenancy agreement, it was specifically agreed by the parties (Crane bank and Meera) that the tenancies shall remain firm and binding on them until the expiry of ten years,” reads part of the plaint filed by Meera.
In the above tenancy agreement, Crane bank would pay $46,980 (Shs 171m) in rent and $46,980 (Shs 171m) in ground rent per month with a seven per cent annual increment for Plot 38 Kampala road and $9,890 (Shs36m) in rent and $9,890 (Shs 36m) in ground rent for Plot 40A Kampala road.
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