*Justice S. U. Bature of a High Court of the Federal Capital Territory, Abuja, rules the decision of Zenith Bank Plc to freeze the customer鈥檚 account with a supposed Magistrate Court order without notifying the customer owner was illogical and a betrayal of the banker-customer relationship

Alexander Davis | 绿帽献妻

Justice S. U. Bature of a High Court of the Federal Capital Territory (FCT), Abuja, Nigeria, has awarded a fine of N85 million against Zenith Bank Plc and the Nigeria Police Force (NPF) for freezing one of the bank鈥檚 customers鈥� accounts, relying on an invalid court order.

The court also ordered the commercial bank in Nigeria to immediately unfreeze the account domiciled in its branch at 63, Usuma Street, Maitama, opposite Transcorp Hilton Hotel, Abuja, and publish a public apology to Abhulimen & Co, the corporate customer, in two national newspapers and on its official Web site.

Justice Bature issued the orders in a judgment, which held, among others, that the bank鈥檚 decision to freeze the customer鈥檚 account based on a supposed order by a Magistrate Court, but without notifying the said customer, was illogical and a betrayal of the banker-customer relationship between the parties.

Justice Bature ruled that it was unfortunate that a major financial institution with a Legal Department, supposedly manned by lawyers, would claim to have acted based on an invalid order by a Magistrate Court that lacked the jurisdiction to entertain any banking-related case, including issuing orders for the freezing of a bank account.

The recent judgemen was on a Suit marked: FCT/HC/CV/2194/2024, filed by Paulyn O. Abhulimen (SAN), with Zenith Bank and the Nigeria Police Force (NPF) as defendants.

Abhulimen had sued through the law firm of Kehinde & Partners LP, claiming that, in early 2024, after being unable to access the account of her firm, Abhulimen & Co, and make transactions with it, she discovered that the bank had placed a Post-No-Debit (PND) on it.

She claimed to have subsequently contacted an official of the bank, who is in charge of the account 鈥� Obi Okafor 鈥� who told her about the development, following which the bank, March 13, 2024, claimed to have frozen the account, based on an order obtained by the NPF from a Chief Magistrate鈥檚 Court in Mararaba Gurku, Nasarawa State.

Justice Bature, in the judgment, found that the bank acted on an invalid order made by a court that lacked the requisite jurisdiction.

The Judge also said: 鈥淭he said account was opened at the first defendant鈥檚 (Zenith Bank鈥檚) Transcorp Hilton branch, here in Abuja, and the second defendant (NPF) is also domiciled in Abuja.

鈥淭he rationale behind seeking the said order at a Magistrate Court under the Nasarawa State jurisdiction cannot be understood, and the second defendant did not appear to be able to give any explanation or reason as to why they decided to follow this line of action.”

Justice Bature further ruled: 鈥淭he said Magistrate Court lacked the territorial jurisdiction to entertain the application.

鈥淎nd, 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.

The Judge said 鈥淔rom the foregoing, it is clear that Magistrate Courts lack the jurisdiction to entertain an application for an order to freeze a bank account of a person, and should not have entertained the said application in its entirety.

鈥淭he Legal Department of the first defendant (Zenith Bank), 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.”

It also stated: 鈥淭hus, the first 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.”

The judge as well decried the failure of Zenith Bank聽 to inform the claimant about its decision to freeze her company鈥檚 account.

He, therefore, described the infraction as “a breach of the duty of care it owed to its customers.”

The Judge pronounced: 鈥淚t is the humble opinion of this honourable court that the first defendant owed the claimant a duty of care to duly inform her that her account had been frozen.

鈥淭he first defendant placed a post-no-debit on the account of the claimant鈥檚 firm, but same was not communicated to the claimant until she encountered difficulties in the use of the said account.”

Justice Bature said: 鈥淚t is the humble opinion of this honourable court that the first defendant owed the claimant a duty of care of duly informing her that her account had been frozen.

鈥淭he failure of the first defendant to inform the claimant of the state of affairs on her account amounts to negligence on the part of the first defendant and hence, a breach of duty of care and due diligence owed to the claimant. I so hold.鈥�

Besides Justice Bature said having found that the bank and the NPF acted unlawfully, the Judge proceeded to declare, among others, that an order to freeze a bank account cannot validly be granted ex parte to last indefinitely.

The Judge also declared that the Chief Magistrate Court of Nasarawa State, sitting at Mararaba Gurku, lacked “the requisite jurisdiction” to make an order to freeze the claimant鈥檚 Zenith Bank Plc鈥檚 account (Account Number: 1012272348) based on an ex parte application.

The judge also declared that the act of freezing the claimant鈥檚 Zenith Bank Plc鈥檚 account without a valid order of a court of competent jurisdiction is a breach of the banker-customer relationship between the claimant and the first defendant.

Zenith Bank’s failure to timely inform the claimant that her account had been frozen constitutes a breach of the duty of care the first defendant owes to the claimant.

Justice Bature ordered the bank to immediately vacate the Post-No-Debit (PND) order placed on the claimant鈥檚 account and 鈥渢ender an unreserved apology to the claimant in writing in two national newspapers and on their websites for the grave inconveniences suffered by the claimant in this matter.”

He ruled: 鈥淭he defendants are hereby ordered to jointly and severally pay the sum of N60 million 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鈥� actions.

鈥淭he defendants are hereby ordered to jointly and severally pay the sum of N25 million to the claimant as cost of this action.”

Kindly Share This Story