MBALE — The High Court in Mbale has ordered United Bank for Africa Limited (UBA) to pay Shs108.23 million to a Ugandan worker whose compensation for injuries suffered while working in Afghanistan was withdrawn by an impostor after a bank account was opened in his name.
Justice Farouq Lubega, in a judgment delivered electronically on September 7, 2026, found that the bank breached its duty of care by failing to properly verify the identity and physical address of the person who opened the account before allowing the money to be deposited and subsequently withdrawn.
The court also awarded Michael Wilson Mazuno Shs20 million in general damages, bringing the principal award to Shs128.23 million, in addition to costs of the suit and interest at eight per cent on the Shs108.23 million and Shs20 million from the date of judgment until full recovery.
The case arose from an extraordinary chain of events involving a workplace injury, a compensation claim filed in the United States, an impostor allegedly using Mazuno’s identity and a newly opened bank account through which more than Shs108 million was withdrawn within two days.
Mazuno had been employed on January 8, 2019 as an armed security guard by Trip Canopy Global Operations Inc., an American private security company operating in Afghanistan.
In 2020, while working for the company, he fell from a guard tower and suffered multiple injuries, including spinal damage, hearing impairment and psychological trauma. The injuries left him unable to continue working normally.
Through his lawyers, Barnett Lerner, Kansen Frankel & Castro, Mazuno pursued compensation against his former employer before the US Department of Labour’s Office of Workers’ Compensation Programs.
According to the judgment, Mazuno later contacted his lawyers after failing to receive updates on the case. He was informed that the claim had been settled and that an award of US$30,000 had been approved and remitted to a bank account held in his name.
But the account was not controlled by Mazuno.
The court record states that on April 22, 2023, an account was opened in Mazuno’s name using his National Identification Number, but the photograph associated with the identification allegedly belonged to another person.
The compensation money eventually landed in the account.
On August 10, 2023, Shs108,230,400 was deposited into the account. It was then withdrawn in two instalments on August 10 and August 11.
The first withdrawal was Shs85 million, followed by Shs23.23 million the next day.
One of the most striking aspects of the judgment was the court’s examination of how the account was opened and how the money was subsequently withdrawn.
Mazuno argued that the bank had failed to carry out basic Know Your Customer checks, including proper identity verification, confirmation of the photograph attached to the NIN, physical address verification and scrutiny of the source of funds.
The bank, however, maintained that it had followed its procedures and verified the applicant’s NIN through NIRA.
A bank witness told court that the system used to verify NINs did not provide the applicant’s photograph. But during cross-examination, the witness acknowledged that the bank had not verified the photograph on the applicant’s National Identity Card.
The evidence regarding the physical address was equally damaging.
The court heard that the bank had not physically verified the address provided by the person who opened the account. A former branch manager testified that after the fraud was discovered, bank officials went to the address given during account opening, only to be told that a person matching the alleged identity was unknown in the area.
UBA’s defence included an argument that Mazuno was not its direct customer and therefore the bank did not owe him a duty of care.
The judge rejected that argument.
Justice Lubega relied on the “neighbour principle”, under which a bank’s duty of care can extend to third parties who could reasonably be affected by negligent or unlawful banking conduct.
The judgment states:
“I align with the decision in Ssebuliaba Joseph v Absa Bank Uganda Limited regarding the duty of care owed by the Bank to a third party, where the acts of the bank affect the third party.”
The judge consequently found that UBA owed Wilson a duty of care despite the absence of a direct banker-customer relationship.
That finding became important because Mazuno’s claim was not based on an ordinary contractual dispute between a bank and its customer. It centred on the bank’s alleged negligence in allowing an impostor to create an account in his name and receive his compensation.
The court then turned to whether UBA had breached that duty.
Justice Lubega noted that banking institutions are expected to exercise reasonable skill, care and diligence and comply with legal and professional requirements governing customer identification.
The judge specifically considered the Financial Institutions Act and anti-money laundering regulations requiring financial institutions to establish the identity of customers and monitor transactions for suspicious or unusual activity.
The court was particularly concerned that the bank had failed to verify the physical address and photograph of the person presenting himself as Wilson.
The judgment concludes:
“I find that the Bank breached the duty of care it owed to persons who were reasonably foreseeable victims of harm arising from such negligence.”
That finding effectively shifted the case from a dispute about whether the bank could be sued by a non-customer to whether the bank’s failure to carry out adequate checks had exposed Mazuno to foreseeable financial harm.
The handling of the compensation money presented another major problem for the bank.
The court heard that the account had a daily withdrawal limit of Shs15 million.
Yet the impostor was able to withdraw the entire Shs108.23 million in only two transactions.
Justice Lubega described the circumstances as red flags that should have triggered additional scrutiny.
The judgment states:
“The circumstances ought to have alerted the Defendant Bank to the possibility of a fraudulent scheme orchestrated by the impostor, thereby calling for heightened scrutiny and appropriate intervention.”
The court also noted that the account had previously been inactive before the large compensation payment was deposited.
Although the bank explained that the money had initially been placed on a suspense account pending compliance with Financial Intelligence Agency requirements, the court found that the subsequent release and withdrawal of the funds raised serious concerns.
Court finds bank failed to act with care and good faith
The judgment went beyond finding ordinary negligence.
Justice Lubega found that the bank did not act with the required degree of care and good faith when opening the account and permitting the large sum to be withdrawn shortly afterwards.
The judge stated:
“In light of the foregoing, and having considered the totality of the evidence on record, I find that the Defendant Bank did not act with the requisite degree of care and good faith in opening the impugned bank account and in permitting the substantial sum of money deposited therein to be withdrawn shortly thereafter.”
The court added:
“In the circumstances, I find that the Defendant Bank cannot escape liability for the financial loss thereby occasioned to the Plaintiff.”
The finding placed responsibility on UBA to compensate Wilson for the money lost, even though the bank itself was not found to have physically taken the funds.
The court separately considered Mazuno’s allegation of fraud.
Fraud required a higher level of proof than ordinary negligence. Justice Lubega nevertheless found that the evidence supported the allegation.
The judge was particularly troubled by the circumstances under which the account was opened and the entire compensation was withdrawn.
The judgment states:
“What particularly perplexes me is the manner in which the entire amount was withdrawn from the account without the Defendant Bank detecting or taking steps to prevent the apparent fraudulent scheme, despite the existence of visible red flags.”
The judge ultimately concluded:
“I am satisfied that the Defendant Bank acted fraudulently in opening Bank Account No.0768025176 without properly verifying the identity and physical address of the purported account holder.”
The court further found that the bank acted fraudulently in authorising withdrawal of the entire amount despite the account’s daily withdrawal limit.
The judgment also examined what happened to bank staff involved in opening the account.
A former branch manager testified that two bank officials involved in opening the account were dismissed.
Another bank witness, however, said that Job Ariebi, one of the officers involved, had been subjected to internal disciplinary proceedings and dismissed for receiving Shs6 million from a client within the vicinity of the bank.
The court did not treat the conflicting explanations as sufficient to erase concerns surrounding the account-opening process.
Instead, Justice Lubega said the circumstances surrounding the staff member’s dismissal could not simply be disregarded.
Wilson had asked for Shs50 million in general damages, arguing that he had suffered substantial trauma and distress while attempting to recover his compensation.
The court accepted that the loss had consequences beyond the missing money.
Justice Lubega observed that Wilson had already suffered physical injuries during his employment and that his former employer had subsequently settled his compensation claim.
But instead of receiving the money himself, the compensation was obtained by an impostor who exploited weaknesses in the bank’s processes.
The judge stated:
“It cannot be denied that the plaintiff has suffered enormous trauma, and has spent money to follow up on the recovery of his due compensation.”
The court awarded Shs20 million in general damages.
Mazuno also sought exemplary damages, which are punitive rather than purely compensatory.
The judge declined to make such an award.
Justice Lubega reasoned that although UBA had been found negligent and ordered to compensate Mazuno for the financial loss, the bank itself had not taken the money.
The court therefore considered an additional punitive award excessive and dismissed that part of the claim.
The judgment ultimately entered in Mazuno’s favour and ordered UBA to pay:
Shs108,230,400 — the compensation money lost;
Shs20 million — general damages;
Costs of the suit; and
Interest at 8 per cent on the Shs108.23 million and Shs20 million from September 7, 2026 until full recovery.
The judgment therefore leaves UBA facing a principal financial liability of Shs128.23 million, before the additional interest and costs.
For Mazuno, the ruling represents the latest chapter in a compensation saga that began with a workplace injury in Afghanistan and moved through a US labour compensation process before ending in a Ugandan courtroom.
For the banking sector, the judgment places particular emphasis on identity verification, physical address checks, Know Your Customer procedures and the responsibility of banks to respond to unusual transactions where the circumstances point towards potential fraud.
Most significantly, the court made clear that the absence of a direct banker-customer relationship does not necessarily shield a bank from liability where its conduct foreseeably causes harm to a third party.
The judgment’s central message is stark: banking safeguards are not merely internal procedures. Where failure to follow them creates a foreseeable pathway for fraud and financial loss, the consequences can extend beyond the person who opened the account — and ultimately reach the bank itself.
Relatedly, you can read about Pearl Bank’s employment battles, including where two former employees won court awards after unfair termination findings, as well as where Pearl Bank was Blocked from Selling Mortgaged Land as Husband Beat Wife and Son in Court Here and There.
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