The Commercial court has ordered Stanbic bank to pay Shs 90 million in damages for closing a customer’s account in violation of a court order restraining it from blocking his access to the account.
In her ruling, justice Ginamia Melody Ngwatu found that the bank had breached a 2012 consent agreement requiring it to keep open the account belonging to Dr James Akampumuza Rutanga while a case he had filed against the bank was pending.
“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,” the judge 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.”
Akampumuza told court that he went to withdraw money from Stanbic Bank’s Kabale branch but was informed that his account had been closed from Kampala. He said he was advised to open a new account if he wished to continue accessing the bank’s services.
He argued that the closure denied him access to his money, crippling his electoral campaigns and contributing to his loss in the election. Akampumuza sued Stanbic in 2012, accusing the bank of violating the customer-bank relationship. The main case is yet to be determined.
In the subsequent contempt of court application, Akampumuza sought Shs 3.7 billion in damages.
Stanbic denied blocking his account, arguing that he had withdrawn money from it on several occasions. The bank also said it had advised him to update his Know Your Customer (KYC) details on its online platform to enable him to access his money more easily.
However, Justice Ngwatu dismissed an affidavit filed in support of the bank’s case by its legal officer, Sarah Rukundo, saying she had not provided evidence to establish 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.
The judge consequently found that Stanbic had blocked Akampumuza’s account and denied him access to his money, in defiance of the court order.
“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,” she ruled.
Although Akampumuza had sought Shs 3.7 billion in damages, the judge reduced the award to Shs 90 million. She also ordered the bank to pay interest on the damages at eight per cent.
The judge declined to award costs, saying they would be considered in the main suit, which is yet to be heard.