Court orders UBA to pay ₦30m for unlawful account restriction
A Federal High Court in Abuja has ordered United Bank for Africa (UBA) to pay ₦30 million in damages to a company, Micoz Bluelink Enterprise, for illegally restricting its account for over a year.
The court also mandated the bank to immediately refund the sum of 163,592 U.S. dollars that was wrongfully withheld from the company’s account.
Justice Peter Lifu, in his judgement delivered on July 25, declared that UBA had no legal right to freeze the company’s domiciliary account or transfer funds from it without a court order or notifying the customer.
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He described the bank’s actions as “a breach of the banker-customer’s relationship,” adding that its conduct was ultra vires, reckless, and “bereft of mercy.” The certified true copy of the judgement was made available to newsmen on Wednesday.
The lawsuit, filed by Akpasi Oziegbe, trading as Micoz Bluelink Enterprise, against UBA, highlighted that the company’s account was restricted on July 20, 2022, with a balance of $163.8 million intended for supply contracts.
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According to the plaintiff’s legal team, led by Chikaosolu Ojukwu, SAN, the company made several inquiries to the bank but received no response or explanation for the restriction.
The plaintiff further alleged that the bank transferred the funds without authorisation on August 19, 2023. In the affidavit, the company stated that there was “no mention of fraud in the call-back request presented by the bank, and the document lacks proper endorsement and authenticity.”
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In its defense, UBA, represented by counsel Kalat Jatau, admitted the inflow of $163,825 but claimed the funds were flagged as suspicious. The bank said it filed a Suspicious Transaction Report (STR) with the Nigerian Financial Intelligence Unit (NFIU) and temporarily restricted the account for “enhanced Customer Due Diligence (CDD).”
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UBA also claimed it informed the applicant of the restriction and that the funds were recalled via a SWIFT instruction from its correspondent bank, Citi Bank.
Justice Lifu, however, found UBA’s actions indefensible, stating that the bank failed to inform the customer of the reasons for the restriction and acted without court approval.
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He held that bank customer funds can only be withdrawn from their account “pursuant to an unequivocal instruction by the customer or a court order,” neither of which was presented by the bank.
The judge also found the bank’s evidence to be defective, noting that its Exhibit ‘A’ only stated “Possible Duplicate,” which does not justify a call-back.
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He recognised the significant economic loss caused to the company, citing the “continual depreciation of the naira” as a factor in his decision.
In addition to the damages and the reversal of the withdrawal, Justice Lifu also awarded a post-judgement interest of 10 percent until the full sum is paid.
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