KAMPALA, Uganda — The Commercial Court has dismissed a lawsuit filed by Entebbe Mayor Fabrice Brad Rulinda against Stanbic Bank Uganda over a disputed Shs273 million ($73,262.50) transaction linked to rebel activity in eastern Congo.
In a ruling delivered electronically on Monday, Justice Stephen Mubiru held that Rulinda could not sustain his claim, citing the illegality surrounding the funds in question.
Court records indicate that Rulinda, who operated a dollar account at Stanbic’s Bugolobi Village Mall branch, received a total of $496,220 in August 2017 from a company identified as Green Global Corporation. This included $422,957.50 sent on August 10 and an additional $73,262.50 the following day.
Stanbic later reversed the smaller deposit and returned it to the sender, prompting Rulinda to sue the bank for breach of contract, seeking recovery of the funds, interest, damages, and legal costs.
However, the bank argued that the transactions were suspicious and reported the matter to the Financial Intelligence Authority after Rulinda allegedly failed to provide satisfactory documentation on the source and purpose of the funds.
“The transactions were unusual and raised red flags consistent with potential financial crime,” the bank stated in its defence, adding that the sender had also requested a reversal after suspecting an investment scam.
In his judgment, Justice Mubiru examined provisions of the Anti-Money Laundering Act and applied the doctrine of wilful blindness, which treats individuals who deliberately ignore the origin of funds as having knowledge of their illegality.
The court found that Rulinda gave conflicting explanations regarding the source of the money. “The plaintiff provided inconsistent accounts ranging from gold trading to oil, transport and construction,” the judge noted.
The ruling further linked the funds to the M23 rebel group operating in the Democratic Republic of the Congo, an entity sanctioned by the United Nations over human rights abuses.
Justice Mubiru concluded that Rulinda failed to take reasonable steps to verify the source of the funds, pointing to “strong indicators of criminal origin.”
Although the court observed that Stanbic had technically breached its contract with Rulinda by reversing the funds without a court order, it ruled that the contract itself was unenforceable due to illegality.
Citing the legal doctrine ex turpi causa non oritur actio — meaning no legal action can arise from a dishonourable cause — the judge dismissed the case.
“The plaintiff’s conduct amounted to money laundering, as he knowingly handled funds likely derived from criminal activity without due diligence,” the ruling stated.
Rulinda was ordered to pay costs to Stanbic Bank, bringing to a close the high-profile case that underscores the growing scrutiny of financial transactions linked to conflict zones and illicit networks.
