High Court Orders Zenith Bank to Pay N85 Million Damages for Freezing Customer's Account Without Valid Court Order

Strategic Insights -

A High Court of the Federal Capital Territory (FCT) has ordered Zenith Bank to pay N85 million in damages for freezing its customer's account without a valid court order. The court, in its judgment, also directed the bank and the Nigeria Police Force (NPF) to publish a public apology to the customer, Abhulimen and Co, in two national newspapers and on its website. The judgment noted that the bank acted on an invalid order made by a Magistrate Court that lacked the requisite jurisdiction to entertain any banking-related case, including issuing orders for the freezing of an account. The bank's decision to freeze the account without notifying the customer was described as "illogical" and a "betrayal of the banker-customer relationship."

Key Takeaways:

  • The High Court of the FCT ordered Zenith Bank to pay N85 million in damages for freezing its customer's account without a valid court order.
  • The court directed the bank and the Nigeria Police Force (NPF) to publish a public apology to the customer, Abhulimen and Co, in two national newspapers and on its website.
  • The bank acted on an invalid order made by a Magistrate Court that lacked the requisite jurisdiction to entertain any banking-related case, including issuing orders for the freezing of an account.
  • The bank's decision to freeze the account without notifying the customer was described as "illogical" and a "betrayal of the banker-customer relationship."
  • The claimant, represented by Mr. Paulyn O. Abhulimen, SAN, had claimed that the bank placed a Post-No-Debit (PND) order on her account without her knowledge or consent.
  • The court found that the bank's decision to freeze the account was a breach of the duty of care and due diligence owed to the customer.
  • The judgment noted that the bank's legal department should have been aware of the law that the Magistrate Court lacked the jurisdiction to entertain an application for an order to freeze a bank account.

Statistics:

  • The court awarded damages in the sum of N60 million to the customer as general damages for the embarrassment, psychological trauma, financial distress, emotional stress, and grave inconveniences suffered.
  • The court also awarded an additional N25 million as cost of the action against Zenith Bank and the NPF.

Sources:

  • FCT/HC/CV/2194/2024, Judgment of the High Court of the Federal Capital Territory (FCT)
  • Abuja Federal Capital Territory, Nigeria (2024)