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A major legal setback has hit United Bank for Africa (UBA) Plc, as the Lagos State High Court sitting in the Tapa Commercial Division dismissed the bank’s long-standing debt recovery suit against a customer and instead ordered it to pay ₦7.57 million for wrongful charges.
Delivering judgment in the protracted case, Justice A. M. Ipaye held that the bank failed to substantiate its claim that Mr. Arueyingho Gbemi Mac was indebted to it to the tune of ₦57.4 million under a mortgage facility granted in 2007. The suit, which had lingered for over a decade, was consequently dismissed in its entirety.
In a dramatic twist, the court found that rather than owing the bank, the customer was in fact entitled to a credit balance of ₦7.57 million. This conclusion followed an independent audit supervised by the Chartered Institute of Bankers of Nigeria, which uncovered a pattern of excessive and unauthorised charges imposed by the bank.
According to the audit report tendered before the court, UBA applied inflated interest rates and multiple unlawful fees amounting to approximately ₦51.9 million. These deductions were ruled to be in clear violation of existing regulatory frameworks, including guidelines issued by the Central Bank of Nigeria (CBN) and provisions of the Banks and Other Financial Institutions Act (BOFIA), which govern fair and transparent banking practices in the country.
Justice Ipaye acknowledged that while the bank had the contractual right to demand repayment upon default, such rights must be exercised within the bounds of the law. The court held that UBA breached its fiduciary duty to the customer by imposing charges that were neither authorised nor compliant with regulatory standards.
“The claimant has not discharged the burden of proof required to sustain its claims,” the court ruled, emphasizing that financial institutions must adhere strictly to ethical and legal standards in their dealings with customers.
In addition to dismissing the bank’s claims, the court set aside an earlier interlocutory judgment granted in 2014 in favour of UBA. It further ordered the immediate release and return of all title documents belonging to the defendant, effectively restoring his ownership rights over the mortgaged property.
The court also awarded ₦7.57 million to Mr. Mac, representing the excess deductions, with an interest rate of 10 per cent per annum until the sum is fully liquidated.
The ruling is widely seen as a significant judicial pronouncement reinforcing accountability in Nigeria’s banking sector. Analysts note that it underscores the courts’ increasing willingness to scrutinise financial institutions and protect customers from exploitative practices, particularly in cases involving opaque loan charges and non-compliance with regulatory directives.
Coming at a time when concerns over banking transparency and consumer protection continue to dominate public discourse, the judgment sends a clear signal that regulatory breaches and abuse of fiduciary obligations will not be tolerated by the judiciary.
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