A High Court of the Federal Capital Territory (FCT), Abuja, has awarded ₦85 million in damages against Zenith Bank Plc and the Nigeria Police Force (NPF) for unlawfully freezing a customer’s account without proper legal authority.
Justice S. U. Bature, who delivered the judgment, also ordered that both the bank and the police publish a public apology to the affected customer, Abhulimen & Co, in two national newspapers and on their official websites.
The case was brought before the court by Mr. Paulyn O. Abhulimen, SAN, through the law firm Kehinde & Partners LP.
The suit, with case number FCT/HC/CV/2194/2024, named Zenith Bank and the Nigeria Police Force as the 1st and 2nd defendants, respectively.
Abhulimen explained to the court that she discovered her firm’s account had been restricted when she was unable to perform transactions in 2024.
Upon inquiry, she was informed that a Post-No-Debit (PND) restriction had been placed on the account, allegedly based on an order obtained by the NPF from a Magistrate Court in Mararaba Gurku, Nasarawa State.
The judge firmly rejected the legality of the Magistrate Court’s order and criticized the bank’s compliance with it.
“The said account was opened at the 1st defendant’s Transcorp Hilton branch, here in Abuja, and the 2nd defendant is also domiciled in Abuja,” Justice Bature noted.
He questioned why a court in Nasarawa State was approached to issue an order affecting an account and entities based in Abuja.
“The rationale behind seeking the said order at a Magistrate Court under the Nasarawa State jurisdiction cannot be understood, and the 2nd defendant did not appear to be able to give any explanation or reason as to why they decided to follow this line of action.”
Citing constitutional provisions, Justice Bature held that the Magistrate Court acted far beyond its legal authority.
“The said Magistrate Court lacked the territorial jurisdiction to entertain the application.”
“And, regarding the substantive jurisdiction of the court to make the order, it is clear from the provisions of Section 251 of the Constitution of the Federal Republic of Nigeria (1999 as amended), that matters relating to banks and banking transactions are within the exclusive jurisdiction of the Federal High Court, and matters relating to banker-customer disputes are jointly under the jurisdiction of the Federal High Court, State High Courts and High Court of the FCT.”
He emphasized that the Magistrate Court had no legal right to entertain or grant an application to freeze a customer’s bank account.
“The legal department of the 1st defendant, being lawyers, should have been aware of this position of the law and taken the appropriate action in this situation, as they ought not to have obeyed the court order in the first place.
“Thus, the 1st defendant was wrong to have placed a PND on the account of the claimant based on the order of a court lacking the requisite jurisdiction to do so. I so hold,” he ruled.
Justice Bature also took issue with the bank’s failure to notify its customer before freezing the account, calling it a serious breach of the banker-customer duty of care.
“It is the humble opinion of this honourable court that, the 1st defendant owed the claimant a duty of care of duly informing her that her account had been frozen.
“The 1st defendant placed a Post-No-Debit on the account of the claimant’s firm, but same was not communicated to the claimant until she encountered difficulties in the use of the said account.
“The failure of the 1st defendant to inform the claimant of the state of affairs on her account amounts to negligence on the part of the 1st defendant and hence, a breach of duty of care and due diligence owed to the claimant. I so hold.”
As a result of these violations, the court issued a multi-pronged ruling:
– The PND order on the firm’s account must be immediately lifted;
– Public apologies must be published in two national dailies and on the websites of both defendants;
– ₦60 million is to be paid to the claimant as general damages for the emotional, psychological, and financial hardship caused;
– An additional ₦25 million is awarded as cost of the lawsuit.
“The defendants are hereby ordered to jointly and severally pay the sum of N60million to the claimant as general damages for the embarrassment, psychological trauma, financial distress, emotional stress and grave inconveniences suffered by the claimant due to the defendants’ actions.
“The defendants are hereby ordered to jointly and severally pay the sum of N25m to the claimant as cost of this action,” the court held.
