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The United Bank for Africa (UBA) Plc , has landed itself into trouble for unlawfully freezing the account of one of its customers, Ceddi Services Limited.
A Federal High Court sitting in Lagos frowned at the Banks action and declared it a clear violation of the company’s fundamental rights to fair hearing and ownership of property.
While taking a strong stand on the issues, Presiding Judge , Justice Yelim Bogoro, not only ordered UBA Plc to issue an unreserved public apology to the aggrieved claimant but also mandated the apology to be published in two national newspapers.
Justice Bogoro also Ordered UBA PLC to compensate Ceddi Services Limited with a total sum of N3.5 million to cover the losses the company incurred during the period when the account was placed on Post-No-Debit (PND) status.
Joined in the suit delineated as number FHC/L/CS/1461/2020, as defendants, are the Inspector-General of Police, Deputy Inspector-General of Police (Force Intelligence Bureau, Police Force Headquarters, Abuja), and Nigeria Police Force, following an order by Justice Peter Lifu on November 1, 2021.
Ceddi Services Limited had approached the Court for the enforcement of its fundamental rights , citing provisions under Section 42 of the Companies and Allied Matters Act 2020, Section 36 and 44 of the Constitution of the Federal Republic of Nigeria 1999 (As Amended), and Article 7 and 14 of the African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act Cap. A9, LFN, 2004.
Mrs. Ngozi Agorua, the Manager of Administration and Property Services at Ceddi Services Limited, had narrated that the trouble began on August 27, 2020, when Mr. Godwin Abuede, her colleague, visited the bank’s branch office to present cheques for personal income tax payments to the Lagos State Internal Revenue Service.
To their surprise, the bank refused to honor the cheques without any explanation.
Upon further investigation, they discovered that their account was tagged as ‘Debit Frozen Account’ on the internet banking portal, and all attempts to reach the bank via phone calls yielded no response.
According to her, the bank’s arbitrary actions had severe consequences for Ceddi Services Limited, as clients complained that funds remitted to the company’s account were not being disbursed for employee remuneration.
The situation persisted, and the company’s reputation suffered while its ability to conduct transactions and provide services to clients was hindered.
The Company therefore engaged its solicitors, Messrs SimmonsCooper Partners, to address the bank’s conduct.
A demand letter was sent to UBA Plc on September 14, 2020, asking for an explanation and the immediate removal of the account restriction.
Unfortunately, the bank chose to ignore the letter and continued to withhold access to the company’s funds.
UBA Plc, in its counter-affidavit, claimed that it acted in compliance with a court order received from the Nigeria Police in August 2020, instructing them to freeze the company’s account as part of an investigation.
The bank insisted that it was obligated to obey valid court orders and, therefore, the blame should not fall on them.
However, Justice Bogoro ruled that UBA Plc acted illegally by placing the company’s account on Post-No-Debit status using a repealed banker order.
UBA was ordered to issue an apology and pay N3.5 million as damages to Ceddi Services Limited.