Wakilii

Crane Bank Limited (In Receivership) v Sudhir & Another (Civil Appeal 7 of 2020)

Supreme Court · [2022] UGSC 4 · 2022 Form of Decree Settled ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Hearing to settle the form of the order/decree under Rule 34(2)(c) of the Supreme Court Rules, following dismissal of a withdrawn civil appeal
Decision
Form of the decree settled; the contested order was included — receivership ended on 20 January 2018 and consequently management reverted to the shareholders.

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Cited — treatment unverified cited in 7 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

Settling the form of the decree under Rule 34(2)(c), the Court held that the contested order stating that management reverted to the shareholders should be included. Receivership of a financial institution ends by effluxion of time twelve months after the Central Bank takes over as receiver under section 95(1) of the Financial Institutions Act. Once receivership lapsed on 20 January 2018, the assets, liabilities and right to manage reverted to the shareholders, the Central Bank no longer being receiver. Closure deprived the company of its licence but not its legal personality, and Part IX of the Act applies only if it resumes financial-institution business.

Facts

Crane Bank Limited (in receivership) filed a Supreme Court appeal on 1 August 2020 and withdrew it on 15 September 2020. The respondents objected and prayed for dismissal with costs under Rule 90(4). On 11 February 2022 the Court dismissed the appeal with costs in the terms found by the lower courts. As the successful parties, the respondents prepared a draft decree. The appellant accepted the first two orders but objected to a third order stating that, the receivership having ended on 20 January 2018, management reverted to the shareholders; it did not contest that receivership had ended, only the reversion of management. The parties presented competing decrees to the Registrar and the single judge heard them under Rule 34(2)(c). Bank of Uganda had closed Crane Bank and placed it under receivership, and that receivership lapsed twelve months after takeover by operation of section 95(1) of the Financial Institutions Act.

Issues

  1. Whether the order that management of the appellant bank reverted to its shareholders should form part of the orders in the decree to be extracted following dismissal of the appeal.

Orders

  • The appeal is dismissed with costs in the terms found by the Court of Appeal; the costs shall be borne by Bank of Uganda.
  • The dismissal of the appeal shall take effect from the date of judgment, being 11th February 2022.
  • The appellant's receivership ended on 20th January 2018 and consequently its management reverted to the shareholders.

Key headnotes

Banking & Finance — Receivership of Financial Institutions — Termination by Effluxion of Time under s.95(1) FIA
Receivership of a financial institution ends by effluxion of time twelve months after the Central Bank takes over as receiver, unless one of the options listed in section 95(1) of the Financial Institutions Act is implemented within that period.
Banking & Finance — Receivership — Consequences of Termination — Reversion of Assets and Management to Shareholders
Where receivership of a financial institution terminates by effluxion of time, the assets, liabilities and right to manage the institution revert to its shareholders, the Central Bank no longer being receiver or manager.
Company Law — Corporate Personality — Effect of Closure and Loss of Licence of a Financial Institution
The closure of a bank and the loss of its licence to operate as a financial institution do not extinguish the company's legal personality, which subsists independently of the licence.
Banking & Finance — Financial Institutions Act — Scope of Application of Part IX
Part IX of the Financial Institutions Act governs only an entity transacting financial-institution business under a valid licence, and ceases to apply to a company that has lost its licence unless and until it resumes such business.
Civil Procedure — Decrees and Orders — Settling the Form of an Order under Rule 34 and Consequential Orders
Where the parties disagree on the form of an order, its form is settled by the presiding judge under Rule 34(2)(c); every decision of the Court must be embodied in an order, and consequential orders flowing logically from the Court's findings may properly be included in the decree.

Legislation cited (11)

  • Judicature Act s.7
  • Financial Institutions Act s.4(1)
  • Financial Institutions Act s.4(2)
  • Financial Institutions Act s.94(1)
  • Financial Institutions Act s.94(3)
  • Financial Institutions Act s.95(1)
  • Financial Institutions Act Part IX
  • Judicature (Supreme Court Rules) Directions r.31
  • Judicature (Supreme Court Rules) Directions r.33
  • Judicature (Supreme Court Rules) Directions r.34(2)
  • Judicature (Supreme Court Rules) Directions r.90(4)

Cases cited (2)

  • Tumushabe and another v Anglo African Ltd and another (Civil Appeal No. 7 of 1999)
  • Civil Application No.32 of 2020
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.