Frontier Textiles v Stanbic Bank Uganda Limited and Another [2026] UGHCCD 227

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

The Court held that freezing a bank account under anti-money laundering safeguards is a temporary preservatory measure to facilitate inquiry, not a punitive one, and that once the inquiry is complete continued restriction must be justified by lawful necessity. Where the Financial Intelligence Authority expressly disclaimed further interest, no preservation order subsisted, and the Uganda Revenue Authority had assessed the tax liability and issued a Third Party Agency Notice, the continued freeze served no anti-money laundering purpose and instead obstructed lawful tax enforcement. The freeze was lifted, the bank was authorised to honour the agency notice without incurring contempt, and the Applicant was granted access to residual funds after satisfaction of the tax liability.

Outcome

Application succeeded; account freeze lifted and bank directed to honour the URA Third Party Agency Notice

Facts

The Applicant's account with the 1st Respondent bank was frozen following suspicion of irregular transactions, and the matter was escalated to the Financial Intelligence Authority under the anti-money laundering framework. The FIA carried out its statutory review and disseminated intelligence to the Uganda Revenue Authority for investigation of possible tax liabilities. URA concluded its investigations, issued a tax assessment against the Applicant of UGX 531,389,617/=, and served a Third Party Agency Notice on the Respondent Bank for recovery of the assessed tax. The Applicant applied to have the account unfrozen, contending that the basis for the freeze had fundamentally changed, that its tax obligations had crystallised, and that it wished to comply with the assessment but could not do so while the account remained restricted. Counsel for the FIA informed the Court that the Authority had discharged its mandate and no longer had any interest in maintaining the freeze. The Respondent Bank conceded it was under pressure to comply with the agency notice but feared exposure to contempt of court absent an express order authorising payment. No preservation order from any criminal court and no active FIA directive requiring continued freezing subsisted.

Issues

1. Whether the Court should order the unfreezing of the Applicant's bank account to facilitate compliance with the Uganda Revenue Authority's tax recovery process.
2. Whether continued freezing of the account remained lawfully justified after the Financial Intelligence Authority disclaimed further interest.
3. Whether the Respondent Bank's compliance with a Third Party Agency Notice would amount to contempt of court.

Orders

• The freeze placed on Account Number 9030027282317 held by the Applicant with the 1st Respondent is lifted forthwith.
• The 1st Respondent is authorized and directed to honour and effect the Third Party Agency Notice issued by Uganda Revenue Authority in respect of the assessed tax liability of UGX 531,389,617/=.
• Compliance by the 1st Respondent with the said Third Party Agency Notice pursuant to this Order shall not constitute contempt of this Court.
• Upon satisfaction of the tax liability, the Applicant shall have full operational access to the remainder of the funds on the said account.
• Each party shall bear its own costs.

Rules and key headnotes

Legislation cited (1)

• Anti-Money Laundering Act

Cases cited (2)

• Makula International Ltd v Cardinal Nsubuga
• Pastoli v Kabale District Local Government Council

The original judgment as reported. Read the original PDF before relying on any passage.