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Posted By Admin On September 18th, 2024

A prominent public interest legal practitioner has advised customers or account holders to sue any Nigerian bank that freezes their accounts without a court order.

His reaction follows a Federal Capital Territory High Court judgement that faulted Guaranty Trust Bank Plc for freezing a customer’s account without a court order, describing it as illegal.

Justice S.U. Bature delivered the verdict in the suit marked FCT/HC/CV/7718/2023 on January 31, 2024, after Anita Abibat sued the bank, seeking a declaration that the suspension and freezing of her account without due process of law—specifically, without a court order—was reprehensible, an abuse of due process, and a breach of the contract of the banker-customer relationship.

In an exclusive interview with Nairametrics, Barrister Opatola Victor shared his views on the development in the bank-customer relationship.

Trial Court Judgment 

The claimant’s lawyer, Patience Sharia Esq., argued that on September 1, 2023, her client discovered that her account had been frozen and suspended by the defendant, preventing her from making any transactions.

According to the lawyer, upon inquiry, she was informed by the bank that they had received instructions from the Economic and Financial Crimes Commission (EFCC) to freeze the account.

The lawyer stated that the claimant repeatedly visited the bank to complain about her inability to operate her account, but the response she kept receiving was that her account was frozen and could not be operated by her.

The lawyer added that the claimant had to engage Obi C. Nwakor Esq. of Obi C. Nwakor & Co. to write a solicitor’s letter on her behalf, demanding a written explanation from the bank addressed to the Area 3 Branch Manager in Abuja.

“The defendant failed, refused, and neglected to respond to the letter within five days as demanded in the solicitor’s letter and had still not unfrozen the account, hence this suit,” the lawyer added. 

The claimant stated that the defendant, by not responding to or replying to the claimant’s solicitor’s letter, admitted that they were acting under no law or any power known to the law, nor did they freeze the said account in compliance with any law or court order.

In opposition, the bank’s counsel filed a counter-affidavit deposed by Esther Agbo.

The bank argued that not a single piece of direct or cogent evidence was provided by the claimant to support her allegations against the defendant, in line with the requirements of the law.

The bank also contended that the claimant failed to present any evidence that her account with the defendant was restricted by GTB on the instructions of the EFCC or any other person or authority.

The bank’s legal team stated that the claimant also failed to mention the name of the bank’s staff (from the name tags usually worn by GTB staff) who allegedly informed her that her account was restricted by the instructions of the Economic and Financial Crimes Commission, thus failing to discharge the burden of proof required of her by law.

Passing verdict on the case on January 31, 2024, as seen by Nairametrics, the judge held that the Chairman of the EFCC or any other officer authorized by him, upon being satisfied that the money in a person’s account was obtained by the commission of an offense, has the power to apply to the court via an ex-parte motion seeking an order to freeze such an account.

The judge held that it was clear that the Chairman of the EFCC needs a court order to carry out such freezing, and it is upon the instruction of the court that the addressed bank will obey.

“Therefore, the correct procedure will be to first obtain permission from the court before proceeding to the bank where such account is domiciled before the freezing of the said account can be effected,” Bature stated. 

The judge observed that the claimant further supported her claim by tendering an exhibit showing the notification of the restriction on her account, adding that the evidence was not disputed by the bank.

“Having earlier established that the defendant cannot unilaterally place any restriction on the account of the claimant without a court order and that the banker-customer relationship and duty of care had been breached, I will be right to say that the claimant has duly established her case and satisfied the requirements of the law to be entitled to the reliefs sought. I so hold,” Bature stated. 

The judge noted that although the restriction placed on the claimant’s account had been lifted by the bank, it did not change the fact that the claimant had incurred losses due to the said restriction.

The judge subsequently declared that the suspension and freezing of the claimant’s account without a court order “is hereby declared an abuse of due process of law and a breach of the contract of the banker-customer relationship” and awarded N2,000,000.00 (Two Million Naira) in damages.

What This Means 

Public interest lawyer Opatola Victor, in an exclusive interview with Nairametrics, said the courts have rightly held repeatedly that banks cannot freeze any account without a valid court order under any guise.

He was of the view that by now, this position of the law should be aligned with the understanding that all banks and law enforcement agencies ought to know this.

He agreed with the reasoning of the court, saying, “No bank or law enforcement agency has the legal power or authority to freeze the account of an organization or an individual without a court order to that effect.”

He explained that the Supreme Court and Court of Appeal have held in a plethora of cases that it is settled and sacrosanct that for a bank to freeze, place a caution, or impose any form of restraint on its customer’s account, there must be a court order.

According to him, where the bank suspects that an unlawful transaction is being carried out on an account, it is required to notify the relevant law enforcement agency, which shall, upon the procurement of a court order, direct the bank to freeze such account.

“Doing otherwise will amount to the bank taking the law into its own hands. See the cases of Polaris Bank Ltd V. Yayamu Global Services Ltd & Anor (LPELR-57376(CA)), UBA PLC v. A-G Benue State & ORS (2022) (LPELR-58695(CA)), United Bank For Africa Plc V. Eriba Jude-Bela Eje & Ors (LPELR-57973(CA)),” he said. 

Furthermore, he highlighted that it becomes very obvious that Section 34 of the EFCC Act does not empower the EFCC to unilaterally freeze account numbers, and banks upon such requests ought to demand a court order.

He advised customers to seek court redress if their accounts are frozen without evidence of a court order, citing such action as an illegality against Nigerian customers.

“Any bank customer or account holder whose account is frozen without a court order should feel free to seek appropriate redress,” the lawyer added. 

The High Court has the power to hear and determine cases within its jurisdiction, among others. Meanwhile, the trial court’s verdict is not final, as a disagreeing party has the right to appeal.

Source: https://nairametrics.com/2024/09/03/lawyers-explain-why-efcc-bank-can-no-longer-freeze-customer-accounts-without-a-court-order/