Court Nullifies Union Bank’s £130.7m Deduction from NICON Account, Bank To Appeal Ruling

The Lagos State High Court has nullified Union Bank of Nigeria’s deduction of £130,720,557.06 from the fixed deposit account of NICON Investment Limited, ruling that the bank acted without authorisation and breached its fiduciary duties.

Justice O. O. Abike-Fadipe delivered the judgment in a suit filed by NICON Investment Limited, Global Fleet Oil and Gas Ltd, and Senator Jimoh Ibrahim. The court held that Union Bank unilaterally converted the funds—denominated in pound sterling—to U.S. dollars and used them to offset debts allegedly owed by Global Fleet without the consent of NICON, the account holder.

According to the court, there was no evidence that the pound sterling deposit was pledged as collateral for the loans, and the bank had no legal right to apply the funds toward the debt. The court declared the action null and void, ordering Union Bank to render a full account of all transactions on the affected fixed deposit, including accrued interest.

The court awarded £1 million in damages for breach of fiduciary duty, ?50 million for unlawful deductions and penalties, and ?10 million in costs to the claimants. It also dismissed Union Bank’s counterclaim in its entirety.

Reacting to the ruling, Union Bank issued a statement expressing its disagreement with the judgment and announcing its intention to appeal. The bank said it had already instructed its lawyers to begin the appeal process.

In a statement signed by the Chief Brand and Marketing Officer, Mrs. Olufunmilola Aluko, the bank said the court’s findings on issues such as consolidation of indebtedness, third-party liability, and locus standi were inconsistent with established legal principles and its understanding of the facts.

Union Bank explained that the loan obligations in question had been transferred to the Asset Management Corporation of Nigeria (AMCON), and that its actions were taken in accordance with banking regulations and industry practices.

The bank reiterated its commitment to acting in good faith and maintaining professional standards, while assuring customers and stakeholders of its continued stability and service delivery.

The dispute stems from loans reportedly granted to Global Fleet and NICON Investment, both linked to Senator Ibrahim. The case is expected to proceed to the appellate courts as Union Bank seeks to overturn the high court’s decision.