Court dismisses Rulinda’s Shs273 million case against Stanbic Bank

Courtesy Picture of Entebbe Municipality Mayor Fabrice Brad Rulinda who has lost the case to Stanbic Bank.
Kampala, Uganda | THE INDEPENDENT | The High Court Commercial Division has dismissed a commercial case filed by Fabrice Brad Rulinda, the Entebbe mayor, against Stanbic Bank Uganda over a disputed deposit of $73,262.50 (about Shs273 million) linked to the M23 rebel group in the neighbouring Democratic Republic of the Congo.
In a judgment delivered electronically on Monday, Justice Stephen Mubiru ruled that Rulinda could not sustain his claim against the bank, citing the illegality surrounding the transaction. Court records show that Rulinda operated a dollar account at Stanbic Bank’s Bugolobi Village Mall branch. On August 10, 2017, M/S Green Global Corporation transferred $422,957.50 to his account, followed by an additional $73,262.50 on August 11, 2017. The bank later reversed the smaller deposit and returned it to the sender.
Rulinda sued the bank, arguing that the reversal was done without his consent and breached their banking contract. He sought recovery of the funds, interest, general damages, and legal costs. However, Stanbic Bank, through M/s Kyagaba & Otatiina Advocates (Dentons Advocates), argued that the transactions were unusual and suspicious. The bank reported the matter to the Financial Intelligence Authority after Rulinda failed to provide documentation explaining the source and purpose of the funds. It also stated that Green Global Corporation requested the reversal after discovering that the funds were part of an alleged investment scam.
In his ruling, Justice Mubiru examined the provisions of the Anti-Money Laundering Act and the legal principle of wilful blindness, which treats individuals who deliberately ignore the source of funds as knowing the criminal origin of the funds. The court found that Rulinda provided inconsistent explanations of the source of funds, including claims involving gold, oil, transport, and construction. It further noted that the money was linked to the M23 rebel group in eastern DRC, which the United Nations sanctions for human rights abuses and destabilising state authority.
Justice Mubiru held that Rulinda failed to take reasonable steps to verify the source of the funds and that the circumstances pointed to strong evidence of criminal origin. Although the exact underlying crime was not established, the handling of the funds suggested unlawful conduct. The judge also noted that while Stanbic Bank breached the banking contract by reversing the funds without a court order, the contract itself was unenforceable because it involved proceeds linked to illegality. He cited the legal principle ex turpi causa non oritur actio—meaning no legal action can arise from a dishonourable cause.
The court concluded that Rulinda’s conduct constituted money laundering because he knowingly handled funds likely derived from criminal activity and failed to verify their source. Accordingly, the case was dismissed, with the court ordering Rulinda to pay costs to Stanbic Bank.
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