The Commercial court in Uganda has ordered Stanbic bank to pay Shs 90 million in damages for closing a customer's account in defiance of a court order. The court 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. The judge, Justice Ginamia Melody Ngwatu, ruled that the bank's actions had denied Akampumuza access to his money.
According to the court, Akampumuza had gone to withdraw money from Stanbic Bank's Kabale branch but was informed that his account had been closed from Kampala. He was advised to open a new account if he wished to continue accessing the bank's services. Akampumuza argued that the closure had crippled his electoral campaigns and contributed to his loss in the election. He had sued Stanbic in 2012, accusing the bank of violating the customer-bank relationship.
The main case is yet to be determined, but in a 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 Stanbic denied blocking his account, arguing that he had withdrawn money from it on several occasions.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 claimed 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. The judge consequently found that Stanbic had blocked Akampumuza's account and denied him access to his money, in defiance of the court order.
The judge reduced the award to Shs 90 million from the Shs 3.7 billion sought by Akampumuza. 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. Akampumuza had claimed that the bank's actions had caused him significant financial and emotional distress.
The ruling sets a precedent for banks to adhere to court orders and respect their customers' rights. Stanbic bank's actions were deemed a breach of the consent agreement and a violation of the court's order. The bank's defense was weakened by the lack of evidence provided by its legal officer.
The case highlights the importance of banks maintaining accurate records and providing evidence to support their claims. The judge's ruling emphasizes the need for banks to prioritize their customers' interests and comply with court orders. The outcome of the main case is yet to be determined, but for now, Stanbic bank has been ordered to pay Shs 90 million in damages.
Key points
- Stanbic bank ordered to pay Shs 90 million in damages for closing customer's account
- Bank breached 2012 consent agreement and defied court order
- Judge reduced award from Shs 3.7 billion to Shs 90 million
Reporting sources
- Stanbic fined Shs 90m for closing customer’s account · The Observer
