Court awards N5m in damages against Ecobank for account restriction

The Court of Appeal in Owerri has awarded N5 million in damages against Ecobank for unlawfully restricting a customer's account without a court order. The judgment affirmed that the bank's actions violated the customer's rights and breached fiduciary duty.

The initial ruling in favor of the respondent awarded N10 million in general damages, which was reduced to N5 million by Justice Ntong Ntong due to excessive amount. The court emphasized that banks cannot freeze or restrict customer accounts without a valid court order, regardless of internal policies or compliance procedures.

Ecobank's claim of protecting funds from potential litigation by a trading partner was deemed unjustified, as there was no contractual agreement or court order to support their actions. The court also found that the bank breached its duty of care by restricting access to funds and dishonoring cheques, resulting in loss of business goodwill for the customer.

The appellate court's decision serves as a warning that banks must operate within the confines of the law.