Can Banks Challenge Court Orders Issued against Account Holders’ Funds?


I understand that the Nigeria commercial banks have now filed an application, seeking to set aside the Interim Forfeiture Order, against the funds in unverified accounts, as directed by the Central Bank of Nigeria (“the Interim Order”) and challenging the jurisdiction of the Federal High Court to issue the Interim Order. However, I’m really wondering the legal competence, the Nigerian commercial banks have, to challenge the Interim Order.

From where I stand, the commercial banks lack the Locus Standi, to file any such application. In practical terms, the banks have no title in the funds in the affected accounts. Hence, I really struggle to see any legal principle which donates any right(s) to the banks, to challenge the Interim Order, given the want of proprietary interest in the funds on the part of the applicant banks. In effect, the banks can’t drink panadol for another man’s headache!

It has been held in plethora of authorities that commercial banks do not stand in a Trust Relationship with their customers. Rather the nature of the relationship is simply contractual! Banks are also not the custodians of the funds deposited by their customers, as they routinely deal with the funds, as they deem fit, without reference to their customers.

To these extents, the commercial banks may out of courtesy, notify the affected customers of the existence of the Interim Order. It is then left for the affected customers to take whatever steps, they deem fit. For the avoidance of doubt, there is also nothing wrong with the banks approaching the Court to seek a variation of the Interim Order, if there are, any practical difficulties regarding compliance with the Interim Order, as they have recently done. However, for the banks, to seek set aside the Order vide any application whatsoever or howsoever, flies on the face of strict legal principles.

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Perhaps, it bears mentioning; in the course of legal proceedings, Orders are routinely, issued against commercial banks regarding funds domiciled with them. Banks rarely challenge such Orders, and even where they attempt to do so, they are usually shut out. Therefore, I’m really wondering what informed the current attack, against the Interim Order, other than the vested interests of the banks, to retain the funds for their purposes, at the expense of the Nigerian Government.

It will indeed, be interesting to see what the Courts make of the application. I’ll rather be interested in what the Supreme Court will have to say on it, as I expect it will go all the way.

© Nnamdi Amaefule.



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