Court orders Zenith Bank to pay customer N85m over unlawful freeze of account

A High Court sitting in Abuja has imposed a fine of ₦85 million on Zenith Bank Plc for freezing a customer’s bank account using a court order that was deemed invalid.

In a ruling delivered by Justice S.U. Bature, the court also instructed the bank to lift the restriction on the affected account, which is located at its Maitama branch on Usuma Street, directly opposite Transcorp Hilton Hotel.

The judge mandated Zenith Bank to issue a formal apology to the customer, Abhulimen & Co, by publishing it in two national dailies and on its official website.

Justice Bature determined that the bank had acted on the basis of an order issued by a Magistrate Court that lacked the legal authority to handle banking-related matters.

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He criticized the actions of both Zenith Bank and the Nigeria Police Force (NPF)—named as the second defendant—for freezing the customer’s account without prior notification, calling it a breach of trust and a failure in their respective duties.

“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 Court that lacked the jurisdiction to entertain any banking related case, including issuing orders for the freezing of a bank account,” the judge said.

The ruling, although delivered on July 16, was made public after the certified true copy became available on Thursday in Abuja.

The case was filed by Paulyn O. Abhulimen, SAN, operating as Abhulimen & Co, under suit number FCT/HC/CV/2194/2024. She sued both the bank and the police through her legal representatives, Kehinde & Partners LP.

Abhulimen claimed that in early 2024, she discovered she was unable to carry out transactions on her firm’s account. Upon inquiry, she learned from Obi Okafor, the bank official managing the account, that it had been frozen following an order allegedly secured by the police from a Chief Magistrate’s Court in Mararaba Gurku, Nasarawa State.

Justice Bature questioned the decision to approach a court outside the appropriate jurisdiction for such an order.

“The said account was opened at the first defendant’s (Zenith Bank’s) Transcorp Hilton branch, here in Abuja, and the 2nd defendant (NPF) is also domiciled in Abuja,” he noted.

“The rationale behind seeking the said order at a Magistrate Court under the Nasarawa State jurisdiction cannot be understood, and the 2nd defendant did not appear, to be able to give any explanation or reason as to why they decided to follow this line of action,” the judge added.

He emphasized that, under Section 251 of the 1999 Constitution, banking matters fall under the exclusive purview of the Federal High Court, and that Magistrate Courts are not authorized to issue such orders.

He ruled: “The legal department of the first defendant (Zenith Bank), being lawyers, should have been aware of this position of the law and taken the appropriate action in this situation, as they ought not to have obeyed the court order in the first place.”

Justice Bature further found the bank negligent for not informing the claimant that her account had been restricted.

“It is the humble opinion of this honourable court that, the first defendant owed the claimant a duty of care of duly informing her that her account had been frozen,” he said.

He held that the bank’s failure to communicate the status of the account until the claimant faced difficulties amounted to a breach of duty of care.

Concluding that the actions of both the bank and the NPF were unlawful, the court ruled that an ex-parte order to freeze a bank account cannot be indefinite and reaffirmed that the Nasarawa Magistrate Court had no jurisdiction in the matter.

He ordered the defendants to pay ₦60 million as general damages to Abhulimen for the trauma, embarrassment, and financial hardship suffered, and an additional ₦25 million as the cost of litigation.