A High Court of the Federal Capital Territory (FCT) has imposed a fine of N85 million on Zenith Bank and the Nigeria Police Force (NPF) for freezing a customer’s account based on an invalid court order. The court also ordered the bank to immediately unfreeze the account and publish a public apology to the customer, Abhulimen & Co, in two national newspapers and on its website.
The customer, Abhulimen & Co, had sued Zenith Bank and the NPF, claiming that the bank had placed a post-no-debit (PND) on its account without notification. The bank claimed to have acted on an order obtained by the NPF from a Chief Magistrate’s Court in Mararaba Gurku, Nasarawa State. However, Justice S.U. Bature held that the Magistrate Court lacked the jurisdiction to entertain the application, and the bank’s decision to freeze the account was illogical and a betrayal of the banker-customer relationship.
Justice Bature noted that the Magistrate Court’s lack of jurisdiction was evident, as matters relating to banks and banking transactions are within the exclusive jurisdiction of the Federal High Court. He faulted the bank’s Legal Department for obeying the court order despite being aware of the jurisdictional issue. The judge also found that the bank’s failure to inform the customer about the freeze on its account constituted a breach of duty of care and due diligence.
The court declared that the order to freeze the bank account was invalid and that the bank’s actions were unlawful. Justice Bature ordered the bank to immediately vacate the PND order placed on the customer’s account and tender an unreserved apology to the customer in writing. The court also awarded N60 million in general damages and N25 million in costs against the defendants, jointly and severally.
The judgment highlights the importance of ensuring that court orders are valid and issued by courts with the requisite jurisdiction. It also emphasizes the duty of care that banks owe to their customers and the need for banks to prioritize their customers’ interests. The fine imposed on Zenith Bank and the NPF serves as a warning to financial institutions and law enforcement agencies to respect the rule of law and adhere to due process.
The court’s decision is a significant victory for Abhulimen & Co and a reminder to banks and law enforcement agencies to respect the rule of law and adhere to due process. The judgment also underscores the need for banks to prioritize their customers’ interests and ensure that their actions are lawful and in accordance with the banker-customer relationship [1].
