The High Court in Kampala has declared that Bank of Africa breached its contract with Victoria Candles Limited by freezing the company’s account after receiving 1.7 billion Shillings. Civil Division Judge Musa Ssekaana presided over the case and ruled that the bank’s actions were illegal and done in bad faith.
Victoria Candles had initiated legal action against the Government, Inspector General of Police, Erasmus Twaruhuka, and Moses Kafeero after being evicted from land in Muyenga. The court ruled in favor of the company, issuing a Certificate of Order against the Government.
Despite the government’s delay in payment, the company assigned its rights and claims to Molly Katanga through a deed of assignment. Molly Katanga instructed Riverwood Logistics Ltd to pay the company’s money into Bank of Africa, which subsequently froze the account without justifiable cause.
The court heard that Victoria Candles provided all necessary information to the bank but faced unwarranted account freezing, causing significant inconvenience to its business operations. Bank of Africa argued that it froze the account due to suspicions surrounding the source of the funds.
Justice Musa Ssekaana acknowledged the bank’s right to seek an explanation for the large sum but criticized its failure to accept the provided answers. He ruled that the bank’s decision to freeze the account for three weeks and later return the funds to the sender was done in bad faith.
Ssekaana emphasized the lack of evidence supporting the bank’s claim that they questioned the source of the funds. He highlighted the bank’s failure to establish the authenticity of the transaction in the three-week period.
In the ruling, Ssekaana stated that the bank’s decision to return the money to ABSA Bank was unjustified and appeared to be a panicked response after breaching the law. The court awarded the costs of the case to Victoria Candles Limited.
