The High Court of the Federal Capital Territory (FCT) has ordered Zenith Bank Plc and the Nigeria Police Force (NPF) to jointly pay ₦85 million in damages and costs to Abuja-based law firm, Abhulimen & Co, for unlawfully freezing its bank account based on an invalid court order.
Delivering judgment on July 16, Justice S. U. Bature held that the bank and the police acted on an order issued by a Chief Magistrate Court in Mararaba Gurku, Nasarawa State, which lacked the jurisdiction to entertain banking matters or grant orders to freeze bank accounts.
The court ordered the immediate unfreezing of the firm’s account domiciled at Zenith Bank’s branch at 63, Usuma Street, Maitama, opposite Transcorp Hilton Hotel, Abuja. The judge also directed the bank to publish a public apology to the claimant, in two national newspapers and on its website.
Justice Bature condemned Zenith Bank’s reliance on the Magistrate Court order, describing it as “illogical” and “a betrayal of the banker-customer relationship.”
“It is unfortunate that a major financial institution like Zenith Bank, 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,” he said.
Citing Section 251 of the 1999 Constitution (as amended), the judge stressed that only the Federal High Court has exclusive jurisdiction over matters relating to banks and banking transactions, while banker-customer disputes fall jointly under the jurisdiction of the Federal High Court, State High Courts, and the High Court of the FCT.
From the court’s findings, the police sought the order outside their territorial jurisdiction, even though both the account and the NPF headquarters were in Abuja. “The rationale behind seeking the said order at a Magistrate Court under the Nasarawa State jurisdiction cannot be understood,” Justice Bature stated, noting that the police failed to appear in court to explain their actions.
The court further faulted Zenith Bank for failing to inform the claimant of the Post-No-Debit (PND) placed on the account until the firm encountered transaction difficulties.
“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,” the judge ruled.
Senior Advocate of Nigeria (SAN) Paulyn O. Abhulimen, trading under Abhulimen & Co, had sued Zenith Bank and the NPF in suit number FCT/HC/CV/2194/2024 through Kehinde & Partners LP. She told the court that in early 2024, her firm’s account was frozen without prior notice, allegedly based on an order obtained by the police from the Nasarawa Magistrate Court.
The account was eventually frozen on March 13, 2024, according to the information gotten from bank official Obi Okafor, who handled the account.
Justice Bature declared that an order to freeze a bank account cannot validly be granted ex parte to last indefinitely.
The court awarded ₦60 million as general damages for the embarrassment, psychological trauma, financial distress, emotional stress, and grave inconveniences caused by the defendants’ actions. An additional ₦25 million was awarded as the cost of the action, bringing the total to ₦85 million.
The ruling also reaffirmed that Magistrate Courts have no power to freeze bank accounts, urging financial institutions to exercise due diligence before acting on any court order affecting customer funds.
“It is the humble opinion of this honorable court that, the first 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,” 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.
He 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’s Zenith Bank Plc’s account number: 1012272348, based on an ex-parte application.
“The defendants are hereby ordered to jointly and severally pay the sum of N25 million to the claimant as cost of this action,” Justice Bature Declared.
