The High Court of Uganda has ordered dfcu Bank to immediately lift restrictions on a customer’s account holding more than Shs80 million, ruling that the lender acted unlawfully and outside established legal procedures.
In a decision delivered on February 23, 2026 at the Civil Division in Kampala, Justice Joyce Kavuma directed the bank to unfreeze Account No. 01071157642434 within seven days and to pay the costs of the application filed by Mr Bob Ainebyoona.
The judge found that the continued freezing of the account for over two years, even after the customer had been cleared of criminal charges, was unjustified and in breach of both statutory requirements and the banker customer relationship.
Court documents indicate that Ainebyoona had maintained a Dembe Account with the bank and described his dealings as smooth until he attempted to withdraw funds at the Naalya branch. He was referred to the Ndeeba branch and later summoned to the head office, where he was reportedly detained and arrested over allegations involving Shs13.1 million linked to MKASH transactions.
He was charged in Criminal Case No. 0655 of 2020 before the Chief Magistrate’s Court at Buganda Road. In December 2023, the trial court acquitted him of all charges, finding no evidence of criminal wrongdoing. The court held that the disputed Shs13.1 million originated from bitcoin sales by a co accused individual.
Despite the acquittal, the bank maintained a freeze on the account, which contained Shs80,450,748.
In its defence, dfcu acknowledged that Ainebyoona was its customer but argued that internal reviews had flagged suspicious transactions. Through an affidavit sworn by its Acting Head of Financial Crime Management, the bank maintained that a criminal acquittal does not extinguish its regulatory duties where there are strong grounds to suspect proceeds of crime.
The lender relied on provisions of the Anti Money Laundering Act, asserting that it had a responsibility to prevent the possible movement of funds deemed suspicious.
However, Justice Kavuma found serious gaps in that argument. She noted that while financial institutions may take precautionary measures where suspicious activity is detected, the law requires them to report such suspicions to the Financial Intelligence Authority within 48 hours or two working days.
The court observed that no evidence was presented to show that such a report had been made.
“It is inconceivable,” the judge stated, “for the respondent to continue holding the applicant’s money on grounds of a continuing obligation to report when in fact they have not reported to the relevant authority.”
She further stressed that allegations of fraud must be strictly proved and faulted the bank for failing to produce fresh evidence beyond matters already addressed and resolved during the criminal proceedings.
Invoking Article 26 of the Constitution, which guarantees the right to property, the court held that the prolonged freeze amounted to an unlawful interference with the applicant’s property rights. While acknowledging that an initial restriction during investigations may have been prudent, the judge ruled that extending it for more than two years without statutory compliance exceeded the limits of the law.
Although Ainebyoona had sought general damages, the court declined to grant them due to lack of specific proof of quantifiable loss. He was, however, awarded costs, meaning dfcu will meet the legal expenses arising from the case.
Unless an appeal is filed, the bank must comply with the order within seven days, effectively closing a protracted dispute that began with a routine withdrawal and ended in a decisive High Court victory for the customer.
