After Decades Of Litigation, Supreme Court Overturns N22tn Judgment Against Union Bank

In a ruling delivered on Friday, April 25, 2025, five Justices of the Supreme Court unanimously agreed, with Justice Stephen Adah leading the decision, that the lower courts had erred in law by failing to adhere to well-established judicial precedents.

Justice Adah expressed regret that “a simple matter was allowed to drag on for over 25 years due to disregard for settled law.”

“This litigation has lingered far too long. The two lower courts missed the opportunity to apply clear legal principles, thereby creating unnecessary complications,” he stated, with four other justices concurring.

The legal battle originated when Visana Nigeria Limited sued Union Bank over an alleged debt of approximately $8m, compounded at an interest rate of 2.5 percent per month from January 2000, until judgment, and at 10 percent per annum thereafter until full payment.

The dispute began in 1993, when Visana claimed Union Bank was liable for a debt of $7.6m owed by Metalloplastica Nigeria Limited.

Visana challenged a 1989 Deed of Debenture that allowed Continental Merchant Bank to appoint Chief R.U. Uche as receiver/manager over Metalloplastica, arguing that this was done without the written consent of Universal Trust Bank (Union Bank’s predecessor), in violation of the original terms of the debenture.

In 2014, the Federal High Court awarded Visana $7,616,188.94 or its equivalent in naira, with compounded interest of 4.25 percent monthly from January 26, 2000, until judgment, and 10 percent annual interest thereafter until the debt was fully paid.

Over time, the accumulated interest caused the judgment sum to balloon to over N22tn.

Union Bank appealed, and on April 16, 2021, the Court of Appeal slightly reduced the judgment sum to $365,605.32, with simple interest at 4.25 percent monthly from December 31, 1993, to December 16, 2014, and 10 percent interest per annum thereafter.

Dissatisfied with the outcome, Union Bank approached the Supreme Court, which on April 25, 2025, ruled in the bank’s favour, overturning the previous judgment.

The decision is expected to alleviate pressure on the Central Bank of Nigeria, Union Bank’s auditors, regulators, and rating agencies, who had raised concerns about the potential impact of the N22tn judgment on the bank’s financial stability and its ongoing viability.