CBN Appeals Court Ruling On Union Bank Board Of Directors

The Central Bank of Nigeria (CBN) has appealed the judgment of the Federal High Court in Lagos, which declared that the apex bank lacks the authority to dissolve the board and management of Union Bank of Nigeria.

In the appeal filed before the Lagos Division of the Court of Appeal, the bank argued that the lower court’s interpretation of the provisions of the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA) 2020 was flawed, resulting in a miscarriage of justice.

The ruling on 25 March 2026, delivered by Justice Chukwujekwu Aneke, had voided its takeover of Union Bank of Nigeria Plc and ordered the reinstatement of the bank’s previous board of directors.

He held that the applicants were sanctioned without a fair hearing, despite allegations of regulatory infractions arising from a purported special examination of the bank.

The respondents in this appeal include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, and several former directors of Union Bank, including Bayo Adeleke and Yetunde Oni.

In response, the CBN raised 11 grounds contesting the lower court’s decision in its entirety.

The apex bank, in the appeal filed on 26 March 2026, contended that it acted within its statutory authority under the CBN Act and BOFIA to intervene in Union Bank’s affairs due to critical financial distress.

It further submitted that evidence presented to the trial court allegedly showed that at the time of intervention, Union Bank had a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and high levels of non-performing loans, justifying regulatory action to safeguard the banking system.

The appellant further asserted that Section 34 of BOFIA authorises the Governor to remove directors and officers of a bank in severe condition, while Section 51 protects actions undertaken in good faith during the discharge of statutory duties.

The CBN also argued that the lower court’s interpretation of these provisions was flawed, leading to a miscarriage of justice.

It claimed that the judgment wrongly declared its actions unlawful, ultra vires, and unconstitutional, and invalidated the acts of management it appointed, including board decisions and administrative acts, without establishing a legal obligation to reinstate the previous board.

Alongside the appeal, the CBN filed a motion on notice seeking a stay of execution of the Federal High Court’s judgment pending the resolution of the appeal.

This motion requests that the court restrain the reinstated directors and other respondents from taking control of Union Bank, interfering with its management and operations, convening board or management meetings, or modifying its governance structures.

It also seeks to prevent respondents from engaging in media publicity or actions that could destabilise the bank, and requests an order for all parties to maintain the status quo until the appeal is determined.

In an affidavit supporting the stay application, the CBN warned that executing the judgment could disrupt Union Bank’s governance and operations, diminish public confidence in the banking sector, and create systemic risks.

The apex bank highlighted that the appeal raises significant legal questions regarding the scope of its regulatory powers and that failing to grant a stay could render the appeal futile.

Preserving the status quo, it argued, is vital to maintaining stability in the banking sector and to allowing the appellate court to thoroughly hear this case, which could have far-reaching implications for regulatory authority under Nigeria’s banking laws.