Decision of the High Court of Uganda on Disqualification of Advocates and Conflict of Interest : H.C.M.A No. 1063 of 2017 (arising from Civil Suit No. 493 of 2017); Sudhir Ruparelia -v- MMAKS Advocates, AF Mpanga Advocates (Bowmans Uganda), Crane Bank Limited (In Receivership) & Bank of Uganda.
The High Court of Uganda (Commercial division) delivered a landmark ruling in H.C.M.A No. 1063 of 2017 in favour of Sudhir Ruparelia (the “Applicant”) who was represented by Messrs Kampala Associated Advocates (KAA). The Court disqualified MMAKS Advocates and AF Mpanga Advocates (Bowmans Uganda) from participating in H.C.C.S No. 493 of 2017 as advocates and or Counsel.
Crane Bank Ltd (In receivership) & Bank of Uganda (the 3rd and 4th Respondents respectively) instituted H.C.C.S No. 493 of 2017 against Sudhir Ruparelia & another in the Commercial Division of the High Court. The 3rd and 4th Respondents were represented by MMAKS Advocates & AF Mpanga (Bowmans) (the 1st & 2nd Respondents respectively) in 493/2017.
Sudhir Ruparelia (the Applicant) filed H.C.M.A No. 1063 of 2017 seeking declarations that;
- The 1st and 2nd Respondents are conflicted in acting for the 3rd and 4th Respondents and therefore in violation of the Advocate Client relationship and Advocates’ Professional Conduct Regulations;
- The lawyers in the 1st and 2nd Respondents are potential witnesses in 493/2017 and should not be representing the 3rd and 4th Respondents;
- An injunction against the 1st and 2nd Respondents from appearance and or acting as counsel for the 3rd and 4th Respondents in HCCS 493/2017.
KAA raised several grounds in support of the application which among others were that the Applicant was a Client for the 1st and 2nd Respondents and the latter became aware of facts which could be prejudicial to him, that the Claim in 493/2017 raised issues that were obtained during the interaction between the Applicant and the 1st and 2nd Respondents, that the interactions between the Applicant and the 1st and 2nd Respondents created a fiduciary relationship that created a likely conflict of interest and that the 1st and 2nd Respondents were in violation of the Advocates’ Professional Conduct Regulations.
Issue: The issue for the court was whether in the course of representing the 3rd Respondent, the 1st and 2nd Respondents could have also handled matters for Sudhir Ruparelia which were likely to arise in H.C.C.S. 493/2017.
The Court held that a fiduciary relationship had been created more between the 1st and 2nd Respondents and the Applicant than with the 3rd Respondent (CBL), and as a result, the Applicant need not prove that any secrets had been revealed as they are presumed to flow from the Applicant to the Respondents during their interactions. It was therefore unwise to allow the 1st and 2nd Respondents to act for any party against the Applicant in 493/2017.
The Court also held that the 1st and 2nd Respondents and their staff ought to have known that the role played in the events leading up to H.C.C.S 493/2017 would require their testimony as witnesses. The continued participation of the 1st and 2nd Respondents in the case against the Applicant would effectively constitute a conflict of interest and deprive the Applicant of a chance to ably defend himself.
The Court agreed with the Applicant and disqualified the 1st and 2nd Respondents from participating in Civil Suit 493/2017 either as advocates or counsel.
The lesson drawn from this ruling is that where a matter in contention “touches” those that the advocate used to handle on behalf of the Client, the presumption of imputed knowledge of confidences between the parties is enhanced and the Advocate therein must be disqualified. The sum total of the foregoing being that an advocate should not be left to be in a position adverse to that of a former client.