Federal High Court in Abuja orders Zenith Bank and Police to pay N85m for unlawful freezing of customer’s account

 

A High Court sitting in the Federal Capital Territory has delivered a landmark judgement against Zenith Bank Plc and the Nigeria Police Force, holding them liable for unlawfully freezing a customer’s account without a valid court order. Justice S. U. Bature, who presided over the matter, awarded N85 million in damages and directed both defendants to publish public apologies to the aggrieved party in two national newspapers and on their official websites.

The legal battle was triggered when Abhulimen & Co, a law firm owned by Senior Advocate of Nigeria, Mr. Paulyn O. Abhulimen, discovered that its account had been suddenly restricted under a Post-No-Debit order. This action, according to the bank, stemmed from an order allegedly secured by the Nigeria Police Force from a Chief Magistrates Court in Mararaba Gurku, Nasarawa State, on March 13, 2024.

The claimant, represented by the law firm of Kehinde & Partners LP, approached the court after numerous unsuccessful attempts to operate the account. Upon inquiry, an official in charge of the account confirmed the restriction but attributed it to the police request and the Nasarawa Magistrate Court order.

Justice Bature expressed strong disapproval of the defendants’ actions, highlighting that the said Magistrate Court neither possessed the territorial jurisdiction nor the substantive authority to grant such an order in banking matters. He noted that the account was domiciled at Zenith Bank’s Transcorp Hilton branch in Abuja and that the Nigeria Police Force involved in the case was also based in Abuja. The judge questioned why an application of such nature was sought in a court located in Nasarawa State.

From a constitutional perspective, the court reaffirmed that Section 251 of the 1999 Constitution, as amended, vests exclusive jurisdiction over banking and related disputes in the Federal High Court. It further emphasised that issues between banks and customers can only be heard by the Federal High Court, State High Courts, or the High Court of the Federal Capital Territory.

The ruling made it clear that the Nasarawa Magistrate Court had no legal basis to entertain the police application to freeze the account. Justice Bature criticised the legal department of Zenith Bank for failing to recognise this limitation of jurisdiction and for obeying an invalid court order. According to him, the bank’s compliance reflected negligence and a breach of professional duty.

A particularly troubling aspect of the case, the judge observed, was the bank’s failure to notify the claimant about the account freeze. The court held that this omission amounted to a breach of the duty of care that the bank owed to its customer. Justice Bature stressed that informing the customer should have been a fundamental step, given the serious implications of restricting access to funds.

The court described the bank’s conduct as illogical, especially considering the direct relationship between a banker and its customer, which is built on trust, transparency and accountability. Freezing an account without disclosure not only disrupted the client’s operations but also inflicted avoidable psychological and financial distress.

In its final orders, the court instructed Zenith Bank to immediately lift the Post-No-Debit restriction placed on Abhulimen & Co’s account. Both the bank and the Nigeria Police Force were directed to issue public apologies in two widely read national newspapers and on their respective websites, acknowledging their wrongful actions.

On the matter of compensation, the court awarded N60 million in general damages to the claimant for the embarrassment, financial strain, emotional stress, and inconvenience caused by the defendants. An additional N25 million was granted as the cost of initiating the suit, bringing the total sum payable to N85 million.

The decision serves as a stern warning to financial institutions and law enforcement agencies about the legal and financial consequences of acting outside the law. It reinforces the principle that court orders affecting banking transactions must originate from courts with proper jurisdiction, and that due process, including prompt communication with customers, is not optional but mandatory.

For the claimant, the judgement represents both vindication and a reminder of the importance of defending constitutional rights in commercial and banking relationships. For the wider public, it stands as a precedent in holding powerful institutions accountable when they abuse their authority or neglect their responsibilities.