Zenith Bank Ordered to Pay N1 Billion in Damages for Unlawful Account Freezing

Justice Rasul Oriyomi Olukolu of the Lagos State High Court has ruled that Zenith Bank Plc must pay one billion naira in damages for unlawfully freezing the bank account of its customer, Hajia Sa’daatu Ramallan-Yaro.

The court’s decision came in response to a suit filed by Hajia Yaro, who challenged the bank’s actions as illegal and without proper legal authorization. The claim was initiated with an Originating Summons dated January 16, 2023, and filed on January 17, 2019.

Hajia Yaro sought judicial clarification on whether it is unlawful for banks, either unilaterally or in collaboration with law enforcement, to freeze or restrict customer accounts without a valid court order. The court found in her favour, ruling that Zenith Bank’s actions were indeed unlawful.

Justice Olukolu declared that the bank’s restrictions on Yaro’s account, numbered 2282692638, were illegal and ordered an immediate unfreezing of the account.

Additionally, the court awarded N1 billion in exemplary damages to Yaro and granted N15 million in legal costs, based on the evidence provided. However, Justice Olukolu decided against applying interest on the frozen amount, stating that the rate of 10% per annum would not be applied until the account restriction was lifted.

This substantial ruling highlights the judiciary’s stance on protecting customer rights against unilateral and unsubstantiated actions by financial institutions. It highlight the importance of adhering to proper legal procedures in account management and financial transactions.