The High Court of the Federal Capital Territory (FCT) in Abuja has ordered Zenith Bank and the Nigeria Police Force (NPF) to pay N85 million in damages for freezing a customer’s account based on an invalid court order.
Judge Samirah Bature, who delivered the judgment on Thursday, held that the bank acted unlawfully by relying on an ex parte ruling from a magistrate’s court without notifying the customer. He described the action as “illogical and a betrayal of the banker-customer relationship.”
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“The failure of the first defendant to inform the claimant of the state of affairs on her account amounts to negligence and a breach of the duty of care owed to the claimant,” he ruled.
The court directed the bank to immediately unfreeze the account domiciled at its branch on 63 Usuma Street, Maitama, opposite Transcorp Hilton Hotel, and publish a public apology to the customer, Abhulimen & Co, in two national newspapers and on its website.
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The plaintiff, Paulyn O. Abhulimen, a Senior Advocate of Nigeria (SAN), who filed the suit through Kehinde & Partners LP, stated that in early 2024, she was blocked from accessing her firm’s account and later discovered that the bank had placed a Post No Debit (PND) order on it.
She said the bank’s account officer, Obi Okafor, informed her when she inquired that the freeze followed an order obtained by the NPF from a Chief Magistrate Court in Mararaba Gurku, Nasarawa State, on 13 March 2024.
Invalid order
The judge declared that the account was opened at the first defendant’s Abuja branch, and the second defendant is also based in Abuja, so there was no justification for seeking the order from a magistrate court in Nasarawa State.
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He further ruled that section 251 of the Constitution vests matters relating to banks and banking transactions in the Federal High Court. While banker–customer disputes fall within the jurisdiction of the Federal High Court, State High Courts and the High Court of the FCT.
He held that the order was invalid as the court lacked both territorial and substantive jurisdiction to freeze the account.
“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’s court that lacked jurisdiction to entertain any banking-related case, including issuing orders to freeze a bank account,” the judge said.
The court further declared that an order to freeze a bank account cannot validly be granted ex parte to last indefinitely, and that the defendants acted without a valid order from a court of competent jurisdiction. It said the bank’s legal department should have refused to comply.
The court awarded N60 million in favour of the claimant as general damages for embarrassment, psychological trauma, financial distress, emotional stress and other inconveniences, and N25 million as the cost of the action.
Growing trend of illegal PND
Last month, the Federal High Court in Lagos ordered Access Bank to pay N7 million in damages tomOluwasesan Ifeoluwa for unlawfully freezing her account without notice.
Judge Ayokunle Faji found that a Post No Debit (PND) restriction was placed on the customer’s account two weeks before a purported court order was allegedly obtained from a magistrate court in Nasarawa State. He ruled that the freeze, which left Ms Bridget unable to fund her treatment after surviving an assassination attempt, breached her constitutional right to property and was “unconstitutional and unjustified.”
In another case in December 2024, Judge Faji of the Federal High Court in Lagos, faulted Access Bank for illegally placing a PND on a customer’s account. He ruled that the action was illegal, unconstitutional and void, stressing that banks cannot act on third-party instructions without a valid court order.
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In September 2020, the Lagos High Court ordered Access Bank to pay N5 million to its customers, Blaid Construction Limited and Blaid Properties, for breaching the bank-customer relationship. Judge I.O. Harrison declared that the bank’s PND action and continued denial of the customers’ rights to operate their accounts since 2015 were unlawful, illegal and void.
The cases highlight desperation of aggrieved persons and entities to obtain illegal orders from magistrate courts without jurisdiction to sit on such cases to compel banks to freeze adverse parties’ accounts. On many occasions, funds are moved from the frozen accounts before the owner becomes aware of the legal proceedings.
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