Failure of a bank to promptly notify its customer of a PND amounts to breach of fiduciary duty

PAULYN O. ABHULIMEN SAN v. ZENITH BANK PLC & THE NIGERIA POLICE FORCE

FCT HIGH COURT

(S.U. BATURE; JC)

FACTS
In early 2024, Paulyn O. Abhulimen, SAN (Claimant), made several unsuccessful attempts to access funds in her account with Zenith Bank Plc (the 1st Defendant) at its Maitama Branch, Abuja F.C.T. To her dismay, she discovered that she could no longer operate the account. Upon inquiry, her relationship officer informed her that a Post No Debit (PND) had been placed on the account pursuant to an order allegedly issued by the Chief Magistrate Court sitting at Mararaba Gurku, Nasarawa State. Shocked by this revelation, the Claimant formally requested a copy of the said order. In response, the 1st Defendant, by a letter dated 13th March 2024, forwarded a copy of the order to her. The order, purportedly procured by the Nigeria Police Force (2nd Defendant), directed the 1st Defendant to freeze the Claimant’s account, to identify and arrest the account operator, and to provide contact details of the officer in charge. The Claimant contended that she was never served with the 2nd Defendant’s application or with any other process in respect of the matter, and had no knowledge of any proceedings against her before the said Magistrate Court. She further maintained that her account was domiciled at the Maitama branch of the 1st Defendant within the Federal Capital Territory, Abuja, where she resides and conducts her legal practice, and that she only became aware of the order after being denied access to her account.

By her letter of 13th March 2024, the Claimant informed the 1st Defendant that the order it relied upon was incurably defective: firstly, because it was issued against a non-juristic entity, “Paulyn Abhulimen & Co”, a name not recognised in the bank’s records; and secondly, because the order was obtained from a court lacking the requisite jurisdiction to grant such relief. Despite this notification, the 1st Defendant refused to lift the Post No Debit instruction on her account.

Consequently, the Claimant filed an action at the High Court of the Federal Capital Territory (FCT), Abuja, against the 1st and 2nd Defendants. One of the issues raised for determination was: Whether the 1st Defendant breached the banker–customer relationship subsisting between it and the Claimant by refusing to honour the Claimant’s mandate on her account.

ARGUMENTS
Learned Counsel for the Claimant submitted, first, that questions pertaining to banking and financial operations fall squarely within the jurisdiction of the Federal High Court and, in certain instances, the High Courts of the States and the FCT. Consequently, the application leading to the freezing of the Claimant’s account was one relating to banking operations, a subject matter clearly outside the purview of the Chief Magistrate Court, Nasarawa State, which therefore lacked the requisite jurisdiction to entertain it. Counsel further argued that the Nasarawa Magistrate Court equally lacked territorial jurisdiction, given that all material facts and parties were connected to Abuja. The Claimant resides in Abuja, her account is domiciled at the Maitama branch of the 1st Defendant in Abuja, and the beneficiary of the order was also based in Abuja. On this basis, counsel maintained that there was no nexus between the matter and Nasarawa State to warrant the assumption of jurisdiction by its courts.
On the banker–customer relationship, learned counsel emphasised that the Claimant is an undisputed customer of the 1st Defendant, which, in turn, owes her a fiduciary duty of care in the management of her account. This duty, counsel contended, required the bank to exercise reasonable skill, diligence, and fairness in handling the Claimant’s mandate. Specifically, counsel argued that the 1st Defendant was under a contractual and statutory obligation, including obligations implied by consumer protection standards, to promptly notify the Claimant of any restriction on her account. By failing to do so, counsel submitted, the 1st Defendant acted in flagrant disregard of its duties, thereby subjecting the Claimant to unnecessary hardship, financial inconvenience, and emotional stress, all of which amounted to a breach of the banker–customer relationship.

In response, learned counsel for the 1st Defendant submitted that the bank could not be said to have breached any fiduciary or contractual duty owed to the Claimant, as its conduct was simply in compliance with a subsisting court order. Counsel contended that a breach of contract arises only where there is an unjustifiable failure to perform contractual terms, either by outright non-performance or by interference with contractual obligations. In this case, however, the act of freezing the Claimant’s account was not a voluntary dereliction of duty but an act carried out in obedience to the directive of the Chief Magistrate’s Court, which the 1st Defendant was legally bound to obey.
Counsel maintained that the 1st Defendant’s action was never intended to deprive the Claimant of her proprietary rights beyond the scope of the order. The bank, she argued, had no authority to question the competence of the Magistrate’s Court or to unilaterally pronounce the order invalid. Its role was confined to compliance, as judicial orders, whether rightly or wrongly made, remain binding until set aside by a court of competent jurisdiction. Furthermore, counsel emphasised that the present suit was not an appeal against the order of the Nasarawa Magistrate’s Court, nor did the Claimant seek any relief specifically aimed at setting aside that order. Consequently, the subsisting order retained the force of law, binding on all parties until vacated or overturned through proper judicial process. Counsel concluded that if the Claimant was dissatisfied with the order, her appropriate remedy was to challenge it before the very court that issued it, or to pursue an appeal to a higher court, not to fault the 1st Defendant, whose duty began and ended with compliance.

DECISION OF THE COURT
In resolving this issue, the FCT High Court held that:

A bank owes its customer a fiduciary duty to promptly notify them of any restriction or encumbrance placed on their account, and that failure to do so constitutes negligence and a breach of the banker–customer relationship. The Court further declared that the Chief Magistrate Court of Nasarawa State lacked the territorial jurisdiction to issue an order freezing an account domiciled in Abuja.

Consequently, the Court ordered the immediate removal of the Post No Debit placed on the Claimant’s account and directed the Defendants to publish an unreserved apology to the Claimant in two national newspapers and on their official websites.
Issue resolved in favour of the Claimant.

O.S. Kehinde, Esq., for the Claimant.
Grace Ehusani Esq with Obinna Obegonu Esq for the 1st Defendant.
2nd Defendant unrepresented.

This summary is fully reported at (2025) 9 CLRN in association with ALP NG & Co.
See www.clrndirect.com ; www.alp.company.