The Supreme Court of Nigeria has overturned a 2014 Federal High Court judgement that awarded over N22 trillion against Union Bank and other parties over a disputed debt.
Justice Stephen Jonah Adah, who delivered the lead judgement, expressed regret that the failure of the high court and the Court of Appeal to adhere to established judicial precedents had turned a straightforward case into a prolonged litigation lasting over 25 years.
The apex bank judgement is anticipated to ease the concerns of the Central Bank of Nigeria (CBN) and other regulators regarding the potential implications of a negative judgement on Union Bank’s ongoing viability and the worries of its auditors and rating agencies.
The case originated from a suit filed by a Lagos-based firm, Visana Nigeria Limited, which claimed that Union Bank was indebted to it for approximately $8 million at an interest rate of 2.5 per cent per month, compounded from January 2000 until judgement, and subsequently at 10 per cent per annum from the date of judgment until the debt was fully paid.
Visana filed the suit against the defendants, alleging that Metalloplastica Nigeria Limited, a borrower from Union Bank, owed it $7,616,188.94 as of December 1993.
Visana had also contended that a Deed of Debenture was established on February 24, 1989, which led to the appointment of Chief R. U. Uche as Receiver/Manager of Metalloplastica, was invalid.
The company claimed that it was obtained without the prior written consent of Universal Trust Bank and its successors (which includes Union Bank), as stipulated in paragraph 13(f) of the original Debenture issued by Metaloplastica in favour of Universal Trust Bank.
On December 16, 2014, judgment was rendered against Union Bank, ordering the payment of $7,616,188.94 or its equivalent in naira, with pre-judgement compound interest at a rate of 4.25 per cent per month from January 26, 2000, up to the date of judgement.
After that, the interest was set at 10 per cent per annum on the judgment sum until the debt was completely settled.
After Union Bank appealed the verdict, the Court of Appeal, in a judgment delivered on April 16, 2021, reduced the judgement sum to $365,605.32 or its Naira equivalent, with pre-judgement interest calculated at 4.25 per cent per month from December 31, 1993, until December 16, 2014.
The interest rate was subsequently set at 10 per cent per annum from the judgment date until the debt’s final settlement.
Still dissatisfied with the Court of Appeal’s judgment, Union Bank appealed to the Supreme Court in 2021. Their persistence paid off when the Supreme Court ruled in its favour on Friday, April 25, 2025.
