United Bank for Africa, UBA Plc, has been ordered by the Federal High Court, Abuja, to pay ₦30 million in damages for unlawfully restricting a company’s account for more than a year.
Justice Peter Lifu, in a judgment, also directed the bank to immediately refund $163,592 wrongfully withheld from Micoz Bluelink Enterprise.
Mr Lifu ruled that the bank had no legal basis for freezing the firm’s domiciliary account or transferring funds without a court order or notifying the customer. He described the bank’s conduct as “a breach of the banker-customer’s relationship,” adding that UBA’s actions were ultra vires its powers, “reckless and bereft of mercy.”
The certified true copy of the July 25 judgment was made available to journalists on Wednesday in Abuja.
The case was filed by Akpasi Oziegbe, trading as Micoz Bluelink Enterprise, in suit number FHC/ABJ/CS/1412/2023, with UBA as the sole defendant.
According to the plaintiff’s counsel, Chikaosolu Ojukwu and Adeyemo Richard, the firm was incorporated on March 19, 2021, and subsequently opened a domiciliary account for trading operations. On July 20, 2022, the company discovered its account had been restricted with a balance of $163,592 meant for supply contracts.
“The applicant made several enquiries to the bank seeking reasons for the account restriction, but the bank failed to respond or unfreeze the account,” Mr Ojukwu said.
Mr Richard further alleged that on August 19, 2023, the bank transferred the funds without the company’s authorisation. In an affidavit, the plaintiff stated that “there is no mention of fraud in the call-back request presented by the bank, and the document lacks proper endorsement and authenticity.”
UBA, through its counsel, Kalat Jatau, admitted receiving the funds but claimed they were flagged as suspicious.
The bank said it filed a Suspicious Transaction Report with the Nigerian Financial Intelligence Unit and restricted the account pending further due diligence. It alleged the applicant’s documents were inconsistent with the actual transaction amounts and that the funds were later recalled based on a SWIFT instruction from its correspondent bank, Citi Bank.
Delivering judgment, Mr Lifu held that UBA breached its fiduciary duty and acted without court approval.
“The bank failed to inform the applicant of reasons for the restriction and proceeded with unilateral withdrawal, thereby breaching the banker-customer contract,” he said.
The judge found UBA’s Exhibit ‘A’ defective: “There is no mention of ‘fraud’ or ‘fraudulent’ in the document, which only states ‘Possible Duplicate’ and does not justify a call back.”
He noted the significant economic loss and business disruption caused to the applicant, stating there was no proof the bank took appropriate steps before restricting the account or withdrawing the funds, nor did it disclose where the money was sent.
Mr Lifu stressed that customer funds could only be withdrawn “pursuant to an unequivocal instruction by the customer or a court order,” neither of which was presented. He declared UBA’s actions “illegal, unconstitutional and a breach of banker-customer relationship,” citing the bank’s conduct, the applicant’s business standing, and “the continual depreciation of the naira” in awarding damages.
The court awarded ₦30 million in damages to Micoz Bluelink Enterprise, with a post-judgment interest of 10 per cent until payment is completed.
The judge also ordered the reversal of the $163,592 withdrawal.
(NAN)