KAMPALA, Uganda — Uganda’s Commercial Court has ordered Stanbic Bank to pay Shs 90 million in damages after finding that it unlawfully closed a customer’s account in violation of a court order restraining it from blocking his access to the funds.
In her ruling, Justice Ginamia Melody Ngwatu found that the bank breached a 2012 consent agreement requiring it to keep open an account belonging to Dr James Akampumuza Rutanga while a case he had filed against the financial institution remained pending.
The judge held that Stanbic was aware of the court order issued on June 27, 2012, despite arguments surrounding whether it had been formally served.
“Both parties participated in the consent, therefore, although the law requires personal service of the order on the other party, in my considered view, the non-service is not fatal especially because it is clear that both parties are aware of the order,” Justice Ngwatu ruled.
“Further, in the absence of a rebuttal by the respondent, I find that the respondent had knowledge of the existence of the temporary injunction order issued by the court on 27th June 2012.”
Customer says account closure disrupted election campaign
Dr Akampumuza told the court that he discovered the account had been closed when he visited Stanbic Bank’s Kabale branch to withdraw money.
According to his account, bank officials informed him that the account had been closed from Kampala and advised him to open a new one if he wished to continue accessing the bank’s services.
He argued that the closure denied him access to his money, disrupted his electoral campaigns and contributed to his eventual election defeat.
Dr Akampumuza sued Stanbic in 2012, accusing the bank of violating the customer-bank relationship. The substantive dispute remains pending before the court.
In a subsequent application seeking to have the bank held in contempt of court, he demanded Shs 3.7 billion in damages over the alleged violation of the injunction.
Court rejects Stanbic official’s affidavit
Stanbic denied blocking Akampumuza’s account, arguing that he had made several withdrawals from it.
The bank also maintained that it had advised him to update his Know Your Customer (KYC) details through its online platform to make it easier for him to access his money.
However, Justice Ngwatu dismissed an affidavit filed in support of the bank’s position by its legal officer, Sarah Rukundo, citing a failure to provide evidence establishing her employment or authority to swear the affidavit on the bank’s behalf.
“Ms Rukundo Sarah stated that she is the respondent’s legal officer but did not present any identification or any letter of appointment/authorisation to depone the affidavit on the respondent’s behalf,” the judge said.
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The court consequently found that Stanbic had blocked the account and denied Akampumuza access to his funds despite the existing injunction.
“Thus, court is convinced that the respondent blocked the applicant’s account and prevented him from accessing money on his account held with the respondent. The respondent knowingly violated the court order,” Justice Ngwatu ruled.
Stanbic ordered to pay Shs 90 million
Although Dr Akampumuza had sought Shs 3.7 billion in compensation, the court awarded him Shs 90 million in damages.
Justice Ngwatu further ordered Stanbic to pay interest on the award at an annual rate of eight per cent.
The judge declined to award costs at this stage, directing that the issue be considered in the substantive case, which is yet to be heard.
The ruling addresses the contempt application arising from the alleged violation of the injunction. It does not conclude the original 2012 dispute between Dr Akampumuza and the bank.
