The Tapa Commercial Division of the Lagos State High Court has dismissed a debt recovery suit filed by United Bank for Africa (UBA) Plc against its customer, Mr Arueyingho Gbemi Mac, ending a 12-year legal battle.
Delivering judgment in suit No. LD/146/2013, Justice A. M. Ipaye, held that UBA failed to prove its claim that the defendant owed N57.4 million under a mortgage facility granted in 2007.
Instead, the court found that the customer was entitled to a credit balance of N7,574,592.87.
The judge further ruled that UBA acted in breach of the Central Bank of Nigeria (CBN) Act and the Banks and Other Financial Institutions Act (BOFIA) in its management of the customer’s account, describing the conduct as a breach of fiduciary duty.
UBA, represented by Mrs G. Opeyokun, had asked the court to recover the alleged debt with 22 per cent interest per annum and grant an order to sell a mortgaged property at Lekki Phase 1, Lagos, claiming the loan had become non-performing.
The defendant, through its counsel, Emmanuel Umoren, contested the claim and filed a counterclaim alleging excessive charges, unlawful interest, and breach of contractual and regulatory obligations.
He also argued that the bank prematurely called in the loan before the agreed 10-year tenor expired.
Central to the court’s decision was an independent auditor’s report commissioned through a process approved by the court and involving the Chartered Institute of Bankers of Nigeria (CIBN).
The report showed that UBA imposed excess charges totalling over N51.9 million, including inflated interest and unauthorised fees, in violation of CBN guidelines.
Justice Ipaye adopted the auditor’s findings, holding that although the bank had the contractual right to call in the loan upon default, it forfeited that right by applying unlawful charges.
Once the excess charges were removed, the court concluded, the defendant was not indebted to the bank.
“The claimant has failed to prove its entitlement to the reliefs sought,” Justice Ipaye ruled, adding that the right to sell the mortgaged property could not arise in the absence of a proven debt.
Consequently, the court Dismissed all of UBA’s claims and set aside an interlocutory judgment granted in 2014, awarded N7.57 million with 10 per cent annual interest from the date of judgment until full payment, in favour of the customer;
