CL-2020-000859 - [2025] EWHC 1915 (Comm)

The argument is all about some reports produced by a company called Pricewaterhouse Coopers Ltd (“PWC”). Although Ms Brown KC, who appeared for the claimants, said that this company was not to be confused with the well-known international accountancy firm, there does not seem much room for doubt that PWC is indeed ostensibly part of that global “firm”, whether or not it is entitled to provide the services that it did under Ugandan law.

DFCU’s case is that PWC was instructed by Bank of Uganda on 28 October 2016—about a week after CBL had been placed under supervision—to prepare a report. At least two versions are available, and relied on: a preliminary report which was dated 21 December 2016, and a final report which was dated 13 January 2017. Although Ms Brown made submissions that various other versions of the reports call into question their dating, and that they (or parts of them) may have been written either earlier or later than those dates, I could not begin to decide those questions now, nor need I. I shall proceed on the basis that DFCU has an arguable case, as it plainly does, that PWC produced the reports on those dates.

The reports are largely but not completely identical (there are some potentially significant differences). They are long documents, running in each case to roughly 150 single-spaced pages. The versions before me, and apparently available to the parties, do not include appendices that they appear originally to have contained, and which are referred to in footnotes. Nor do they include any record of some of the primary material referred to, including information extracted from computers and records of various interviews on which PWC relied. They span a broad period, sometimes going back to events in the early 2000s. Their findings relate to numerous points of detail, and if accurate, can fairly be described as serious, indicating mismanagement of the bank in a number of respects, including the creation of a deliberately false impression on its balance sheet, disguising the identity of shareholders, improper diversion of bank money and sweetheart deals with insiders. If CBL was operated as the PWC reports suggested then it is on the face of it arguable that its management was not such as any sensible regulator would wish to see operating a strategically important bank.

The reports have, potentially at least, various types of relevance to this case. They go in at least three ways to the allegation that Bank of Uganda was simply pretending to have concerns about CBL in furtherance of a corrupt plan to strip its assets. As to that (a) it may be said to be inconsistent with such a plan that Bank of Uganda chose to instruct PWC to investigate at all, unless it were to be said (which it is not) that PWC was part of the conspiracy. (b) It may be said that the fact that PWC was reported (rightly or wrongly) a view that CBL was subject to serious mismanagement further undermines the proposition that similar allegations made by Bank of Uganda were made in bad faith—for how likely would it be that a non-conspirator would happen to agree with a story that had been conjured for corrupt purposes from nothing? And (c) it may be said that the Bank of Uganda relied, and (even if the Bank of Uganda was in fact acting nefariously) that a central bank regulator acting properly would have relied, on the PWC reports in taking action after 21 December 2016. The first two points are relevant to liability; the last to liability, causation and quantum.

Those arguments do not depend on PWC’s conclusions being correct. The defendants may “rely on the PWC reports” to make each of those points without seeking to persuade the trial judge that PWC’s conclusions are correct. The arguments depend simply on the facts that PWC were instructed to prepare the reports, and that the reports that they prepared took the form that they did. The reports’ apparent cogency, the expertise and qualifications of those preparing them, the extent to which they can be cross-checked to other material known to the Bank of Uganda may all be in issue. But it will not be necessary for the trial judge to decide whether the allegations the reports contain have been proved.

The second set of arguments go to the propositions that CBL was (as it claims) a bank with a “strong balance sheet” and a “strong financial position”. It thereby also, indirectly, goes to the allegations that the sale to DFCU was at a “gross undervalue” and—if it comes to that—to any assessment of loss, either on the basis that CBL would have continued its business profitably, or on the basis that if sold it would have been sold for more than it was.

Those arguments, however, unlike the first set, may depend on whether PWC’s conclusions are correct. DFCU would “rely on the reports”, to the extent that it does, for their truth. If their conclusions are false then the inferences will not have such force. They might still have some force, even then, since when one is asking what central bank will permit, or what a potential purchaser will demand, even “issues” that, if bottomed out, might prove to be unimportant may affect value.

In broad terms, the basic issue that divides the parties is whether DFCU should be permitted, as a matter of pleading, to rely on the PWC reports “for their truth”. In other words, it is common ground that DFCU may legitimately make any point that flows from the fact that the reports were prepared and provided to the Bank of Uganda in the form they were. But the claimants object to the manner in which DFCU is proposing, or may be proposing, to plead the reports as a way of alleging that PWC’s conclusions are facts that the trial judge should find.