Crises In UBA Over Illegality, Infractions On Account Of Customer

Crises In UBA Over Illegality

OpenLife Nigeria reports that a Lagos Federal High Court, has descended heavily on United Bank for Africa (UBA) Plc, for unlawfully placed Post-No-Debit (PND) on the account of one of its numerous customers, Ceddi Services Limited.
Theis, according to information, has orchestrated crises in the bank with management weighing options to navigate the court ruling.

The court, in its ruling, faulted the illegal acts of the bank, saying that such action amounted to flagrant breach of fundamental rights to fair hearing and property ownership of the company.
Consequently, Justice Yelim Bogoro, the presiding judge of the court, ordered UBA Plc, to tender unreserved public apology to the claimant. The apology, Justice Bogoro ordered that must be published in two national newspapers.

The judge also ordered UBA Plc to pay a total sum of N3.5 million as loss incurred by the company during the period that the account was PND, and as damages.
Justice Bogoro made the above orders while delivering judgment in suit numbered FHC/L/CS/1461/2020, filed by the company against UBA Plc and three others.

Others listed as defendants alongside UBA Plc, were Inspector-General Of Police, Deputy Inspector-general Of Police (Force Intelligence Bureau, Police Force Headquarters, Abuja) andNigeria Police Force, who were joined in the suit by the order of Justice Peter Lifu, on November 1, 2021.

The company, Ceddi Services Limited, through its legal team, who includes Oladapo Akinosun (SAN) and Akintayo Iwilada, had approached the court for the above granted orders and many others, through a fundamental rights enforcement suit, which they said was pursuant to 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.

The company in the affidavit in support of the motion, deposed to by it’s Manager, Administration and Property Services, Mrs. Ngozi Agorua, had told the court that it has been banking with UBA Plc since February 16, 1998, with Account name: Ceddi Services Limited; Account Number: 100*****9; Branch: 9, Wharf Road, Kariko House, Apapa, Lagos.

Mrs. Agorua averred that on August 27,2020, at about 10:00am, her colleague, Mr. Godwin Abuede was present at the bank’s branch Office at 9, Wharf Road, Kariko House, Apapa, Lagos to present cheques for personal income tax in favour of the Lagos State Internal Revenue Service.

She averred that surprisingly, when Mr. Abuede got to the Bank, the attendant refused to honour the cheque presented without any explanations. And she decided to check the internet banking portal to ascertain company’s account status. Upon viewing the firm’s banking porta, she discovered that the account status was tagged: ‘Debit Frozen Account’. And she immediately reached out to the bank vide code call but there was no response.

She averred that some other clients have reached out to her expressing concerns that the monies remitted into the firm’s account have not been disbursed for payment of remuneration to employees.

She further averred that till the time the suit was filed, the firm has been unable to access the funds in its account and has been restricted from carrying out any transaction with the account.

The breach of the firm’s fundamental rights over its asset with the bank has been subsisting since August 27, 2020.
She stated that some clients have threatened to institute legal actions against the company if the funds contained it’s account are not returned. And that applicant briefed its Solicitors, Messrs SimmonsCooper Partners about the bank’s conduct.

She further stated that Simmons Cooper Partners wrote a letter dated September 14, 2020 to the bank demanding an explanation for by it’s action and an immediate removal of the restriction on the Applicant’s Bank account. But UBA despite receiving the company’s demand letter dated September 14, 2020, the bank, has persistently and willfully refused to respond to the said letter refused lifted the unlawful restriction on the account to date.

She averred that the applicant realized (vide a Counter-Affidavit dated January 12, 2021 filed by the bank) that the other respondents had by its correspondence dated August 14, 2020, directed the bank to freeze the applicant’s account. And that the second to fourth respondents in their letter dated August 14, 2020, and on a purported order of a Magistrate Court dated August 17, 2020 authorizing the bank to freeze and/or place a restriction on the applicant’s account.

She averred that the purported order relied on by the UBA and other respondents, was entirely connected to the repealed Bankers Order Act of 1847. And that all the respondents have been given notice to produce a certified true copy of the Order dated August 16, 2020, but the bank oppressively acted on the directive of the other p respondents thereby infringing on the company’s right to fair hearing and property ownership as enshrined in Sections 36 and 44 of the 1999 Constitution (As Amended).

She stated that the applicant has been threatened by its clients and has suffered reputational damage and serious economic distress primarily, because the applicant is unable to transact and render services to its clients due to the restriction placed on its account. The Applicant’s business has suffered a huge strain owing to the restriction on its account.

She stated that owing to the illegal action of bank, the company’s business has suffered a huge strain, and urged the court to grant all the reliefs sought.

But UBA Plc, in its counter-affidavit deposed to by one kenna Enebe, from it’s Legal department, averred that sometimes in August 2020, the bank received a letter dated August 14, 2020, from the Nigeria Police informing the bank of an investigation into the activities of the company and instructing the bank to place the company’s account on ‘Post No Debit’ based on a Court order and to stop the outflow of money from the said account amongst other instructions.

He also averred that the bank in compliance with the Court Order, placed a Post No Debit on the firm’s account and restricted the outflow of money from the account.

He averred that contrary to the some depositions in the firm’s affidavit in support of originating summons, the bank did not act arbitrarily against the company, neither did the it infringed on its the fundamental human right.

The lawyer also averred that his bank has not breached any of the rights of the firm, but only acted in accordance with a valid order lawfully issued by a court of law and presented by a competent authority in line with their primary functions under the law.

The lawyer added that the funds standing to the credit of the firm is still available to the company subject to the Court’s order.
He averred that the UBA Plc is not indebted to the applicant in any way or liable to the it for any damages whatsoever and has not acted unlawfully.

He averred that the bank is mandated by law to comply with all valid orders of Court inclusive of the Banker’s Order dated August 17, 2020 and the bank is not in a position to question the validity of such order. Adding that the firm is fully aware of the existence of the Banker’s Order but failed to apply to that court to challenge the validity of the said Order or even apply to set it aside or discharge same.

He averred that the Bank is duty-bound to obey Court orders served on it and this clearly absolves the bank from any damages that may arise out of the obedience to that Court order. Adding that firm does not have a reasonable cause of action against the bank to make out a claim of violation of its fundamental rights.

Delivering judgment in the suit, Justice Bogoro held that UBA Plc acted illegally in PND the company’s account with a repealed banker order.
The judge consequently, ordered UBA Plc to to tender unreserved public apology to the claimant, and to pay a total sum of N3.5 million as damages.