The High Court in Kampala has declared that Bank of Africa breached a contract by freezing the account of Victoria Candles Limited after receiving 1.7 billion Shillings. Presided over by Civil Division Judge Musa Ssekaana, the court ruled on Tuesday that the bank’s actions were illegal and done in bad faith.
Victoria Candles Limited had initiated legal proceedings against the Government, Inspector General of Police, Erasmus Twaruhuka, and Moses Kafeero following an eviction from land in Muyenga. The court ruled in favor of the company, issuing a Certificate of Order against the Government.
Despite the court order, the company faced delays in receiving payment from the Government. To expedite matters, it assigned its rights and claims to Molly Katanga through a deed of assignment. However, Bank of Africa froze the company’s account without justification, causing disruptions to its operations.
In response, Bank of Africa argued that the funds deposited into the company’s account raised suspicions as they were supposed to come from Molly Katanga, the assignee, but came from Riverwood Logistics Ltd. The bank, claiming its duty to combat money laundering, sent back the funds to Riverwood Logistics Ltd.
Justice Musa Ssekaana acknowledged the bank’s right to question the source of the funds but criticized its refusal to accept the provided explanation. He ruled that the bank’s decision to freeze the accounts for three weeks and subsequently return the money to the sender was done in bad faith.
Ssekaana highlighted that the bank had sufficient time to verify the transaction and establish its legitimacy but failed to do so. The court awarded the costs of the case to Victoria Candles Limited.
