A Federal High Court sitting in Lagos has delivered a landmark judgment declaring that Magistrate, Area, and Customary Courts do not have the legal authority to order the freezing or restriction of bank accounts, or the reversal of transactions, at the request of law enforcement agencies, private individuals, or organisations. The ruling has significant implications for banking operations, police investigations, and the protection of customers’ fundamental rights.
The judgment was delivered on Tuesday, October 7, 2025, by Honourable Justice Ibrahim Ahmad Kala in Suit No: FHC/L/CS/07/2025 between Aiman Mahfouz and Fidelity Bank Plc. In his decision, Justice Kala stated clearly that there is no law that empowers Magistrates or other inferior courts to issue orders freezing a customer’s bank account or reversing transactions, regardless of whether such applications are brought by the police or private parties.
Justice Kala emphasized that only courts of competent jurisdiction, particularly the High Courts, have the authority to issue valid orders restricting bank accounts. He cautioned the Nigeria Police Force against acting outside the bounds of the law, stressing that investigative powers do not include freezing accounts without a valid court order from a competent court. According to the judge, adherence to due process is mandatory in all investigations involving alleged proceeds of crime.
The court also issued a strong warning to the leadership of lower courts across the country. Justice Kala described the frequent issuance of such ex parte orders by Magistrate, Area, and Customary Courts as improper and called on heads of courts to issue circulars immediately halting the practice. He urged judicial authorities to ensure that courts under their supervision operate strictly within their jurisdiction.
In addition, the judge called on banks and other financial institutions to protect themselves from unnecessary legal disputes by refusing to recognise or act on account-freezing orders issued by inferior courts. He advised banks to circulate internal directives across all branches instructing staff not to enforce such orders, which have now been clearly declared to be outside the jurisdiction of those courts.
Justice Kala further noted that the Nigeria Police Force played a central role in enabling the restriction of the applicant’s account by securing and executing the Magistrate Court orders. He observed that the applicant would ordinarily be entitled to compensatory damages for the violation of his fundamental rights, particularly against the police, but explained that such relief could not be granted because the police were not joined as parties to the suit.
The case arose from an application brought under the Fundamental Rights Enforcement Procedure, in which the applicant sought declarations that Fidelity Bank had no legal authority to restrict his account without following due process as required by the 1999 Constitution and the African Charter on Human and Peoples’ Rights. He also asked the court to declare null and void an order issued by a Magistrate Court in Mararaba, Nasarawa State, which the bank relied on to maintain the restriction on his account.
Court documents revealed that the applicant, a Lagos-based businessman with an account domiciled at Fidelity Bank, first had his account restricted in October 2018 based on a Magistrate Court order from Osogbo, Osun State. Although the police later concluded their investigation, and the same Magistrate Court ordered the lifting of the restriction in March 2023, the bank failed to comply with the order.
Despite receiving a formal letter from the Lagos State Commissioner of Police conveying the court’s directive to lift the restriction, the bank continued to deny the applicant access to his funds. Instead, the bank claimed to be acting on a fresh Magistrate Court order issued in October 2024 by a court in Mararaba, Nasarawa State, which again restricted the account.
As a result, the applicant’s account remained frozen for years without any clear allegation or charge against him. The court’s ruling has now clarified the law on the issue, reinforcing the principle that only courts of competent jurisdiction can authorise such restrictions and reaffirming the need for strict compliance with due process in financial investigations.
