The Lagos State High Court sitting in Ikeja has ruled against Union Bank of Nigeria Plc for unlawfully converting NICON Investment Limited’s £130.7 million fixed deposit, awarding £1 million in damages for breach of fiduciary duty and negligence.

In a judgment delivered by Justice O.O. Abike-Fadipe, the court held that Union Bank acted wrongfully by converting the claimant’s British pound sterling fixed deposit to U.S. dollars and subsequently to naira, without proper authorisation. The court described the bank’s action as a breach of trust and a violation of contractual terms.

The case, filed as Suit No. LD/1074/2010, saw NICON Investment Limited accuse the bank of using its fixed deposit funds to settle debts allegedly owed by its sister company, Global Fleet Oil & Gas Ltd, without its consent. The bank’s counterclaim was dismissed in its entirety, with the judge awarding N10 million in costs against it.

The court also held that Union Bank acted “maliciously” by joining Senator Jimoh Ibrahim as a party to the counterclaim, despite the lack of legal justification for his inclusion. The court ruled that Ibrahim, the promoter of NICON Investment, was not a necessary party to the suit.

According to the court, the £130.7 million deposit made by NICON Investment was acknowledged by Union Bank as being fixed for 90 days at an interest rate of five percent per annum. However, the bank later reduced the deposit amount without due consultation or agreement, and purportedly used the funds to offset non-performing loans owed by Global Fleet Oil & Gas Ltd.

The judge ruled that there was no mandate or agreement authorising Union Bank to apply the funds in such a manner, stating:

“The defendant bank’s act of converting the fixed deposit from British Pounds Sterling to U.S. Dollars and subsequently to Naira is unauthorised and is null and void.”

Justice Abike-Fadipe ordered the reversal of all actions taken by the bank in relation to the fixed deposit and directed the bank to pay £1 million in damages to NICON Investment. She further ruled that the bank no longer has authority to pursue any alleged debt after having sold it to the Asset Management Corporation of Nigeria (AMCON).

In a swift reaction, Union Bank stated it would appeal the judgment. In a statement signed by the Chief Brand and Marketing Officer, Mrs. Olufunmilola Aluko, the bank expressed its disagreement with the ruling and reiterated its commitment to ethical and professional banking practices.

“We strongly disagree with the judgment delivered and have instructed our lawyers to file an appeal immediately,” the statement said, adding that the bank would pursue all legal options to challenge the ruling.

Union Bank further maintained that the debt in question had already been transferred to AMCON and all actions were conducted in accordance with applicable laws and banking practices.

NICON Investment had sued Union Bank after alleging that it suffered significant financial setbacks due to the bank’s unauthorised conversion and diversion of its fixed deposit, which was intended to be used for property investments and business expansion.

The case has drawn public attention due to the large sums involved and the prominence of the individuals and institutions named.

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