City bank ordered to release customer’s sh80m

KAMPALA - The High Court in Kampala has ordered a commercial bank to unfreeze a customer’s bank account holding shillings 80 million within seven days, declaring the continued restriction illegal and unlawful.

In a ruling delivered on February 23, 2026, Justice Joyce Kavuma of the Civil Division of the High Court held that the bank’s decision to freeze Bob Ainebyoona’s account since 2023 was unjustified, procedurally flawed and in breach of both statutory obligations and the banker-customer relationship.

The judge found that although the bank initially suspected that certain transactions could involve proceeds of crime, it failed to comply with legal procedures required under the law.

Court documents indicate that in a 2020 criminal case, shillings 13 million linked to the applicant’s account was found to have originated from bitcoin sales conducted by a co-accused person (not named). Ainebyoona was later acquitted, confirming he bore no criminal liability and that fraud allegations against him were unsubstantiated.

Justice Kavuma noted that there was no evidence of an appeal against the acquittal and that the bank did not dispute the outcome of the criminal proceedings.

She further observed that while the bank froze the account on suspicion of unlawful activity, there was no evidence on record showing that it reported the alleged suspicious transactions to the relevant authorities as required by law.

“The bank did not comply with the above provisions and sought to justify its unlawful actions by invoking a law it failed to comply with from the outset,” the judge ruled.

The court said it was inconceivable for the bank to continue holding the applicant’s funds on the basis of a supposed ongoing obligation to report suspicious activity when no such report had been made.

Justice Kavuma added that the bank retained the funds beyond the period prescribed by law for handling suspicious transactions, thereby acting contrary to its statutory duties.

Allowing the continued restriction, she said, would undermine the applicant’s right to property guaranteed under Article 26 of the 1995 Constitution.

Although the bank argued that a criminal acquittal does not automatically extinguish its regulatory and fiduciary obligations where suspicion remains, the judge held that such claims must be supported by evidence.

She explained that the law requires only reasonable grounds for suspicion, but the bank had, since 2023, taken no steps to report the transaction as required under the Anti-Money Laundering Act.

Justice Kavuma consequently ruled that the bank’s actions amounted to breach of both the law and the banker-customer contract, declaring the continued freezing of account No. 01071157642434 and withholding of the applicant’s funds unjustified and unlawful.