Union Bank: CBN Heads to Court of Appeal, Seeks Stay of Execution

•Apex bank insists intervention was lawful under BOFIA

•Yusuf Ali, SAN, Pinheiro, SAN, lead legal team to challenge judgement, seek halt to board reinstatement

Wale Igbintade 

The Central Bank of Nigeria (CBN) has formally appealed the judgement of the Federal High Court in Lagos which nullified its takeover of Union Bank of Nigeria Plc and ordered the reinstatement of the bank’s former board of directors.

The appeal follows the March 25, 2026 ruling delivered by Justice Chukwujekwu Aneke, which held that the apex bank acted beyond its statutory powers in dissolving the board and management of the financial institution.

In response, the CBN has assembled a high-powered legal team comprising several Senior Advocates of Nigeria (SANs) to challenge the decision at the Court of Appeal. 

The team is led by Yusuf Ali, SAN, with other members including Kemi Pinheiro, SAN, Tunde Fagbohunlu, SAN, Uche Val Obi, SAN, and Chukwudi Enebeli, SAN.

The notice of appeal, which contains 11 grounds and was signed by Pinheiro, seeks an order setting aside the entire judgement of the lower court.

In its appeal, the apex bank argued that it acted within the powers conferred on it by the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA) 2020. 

It maintained that it is the primary regulatory authority over banks in Nigeria and is empowered to intervene in the affairs of financial institutions facing serious distress.

According to the CBN, evidence presented before the trial court showed that Union Bank was in a precarious financial state at the time of the intervention, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and high levels of non-performing loans. 

The Bank contended that these conditions justified its actions, which it said were taken in good faith to safeguard the banking system.

It further argued that Section 34 of BOFIA grants the CBN Governor wide-ranging powers, including the removal of directors and officers of a bank deemed to be in a critical condition. 

The appellants also relied on Section 51 of BOFIA, which provides legal protection for actions taken in good faith in the discharge of statutory duties, insisting that the trial court failed to properly interpret these provisions.

The CBN faulted the lower court’s findings on several fronts, arguing that the judgement wrongly held that it acted outside its statutory powers, declared its intervention unlawful and unconstitutional without sufficient basis, misinterpreted the provisions of BOFIA relating to regulatory intervention, set aside actions taken by the management appointed by the CBN, and granted an order of mandamus restoring the former board without establishing a legal duty.

The apex bank also challenged the court’s decision restraining it from exercising regulatory powers over Union Bank, describing the order as an undue limitation on its lawful statutory functions. 

It further argued that the trial court erred in holding that the respondents’ claims were not statute-barred, maintaining that the action was filed outside the legally prescribed three-month period.

Alongside the appeal, the CBN filed a motion on notice seeking a stay of execution of the judgment pending the determination of the appeal. 

Specifically, it is asking the court to restrain the reinstated directors and other respondents from taking steps to enforce the judgement, including taking control of Union Bank, interfering with its management and operations, convening board or management meetings, entering any of the bank’s premises nationwide, and altering its governance structure.

The CBN is also seeking an order restraining the respondents from engaging in what it described as “prejudicial publicity,” including media campaigns or public statements capable of destabilising the bank. 

It further asked the court to direct all parties to maintain the status quo pending the outcome of the appeal.

The appeal lists the CBN and its Governor as appellants, while respondents include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, and several former directors of Union Bank, including Bayo Adeleke and Yetunde Oni, among others.

The respondents had approached the Federal High Court as ultimate beneficiaries of shares in Union Bank, challenging the CBN’s intervention in the bank’s management.

In an affidavit supporting the application, deposed to by a member of its legal team, the CBN warned that allowing the judgement to be executed could disrupt the governance and operations of Union Bank and undermine public confidence in the financial system.

It argued that the appeal raises substantial legal questions regarding the scope of its regulatory powers and that failure to grant a stay could render the appeal nugatory. 

The apex bank further maintained that preserving the status quo is necessary to prevent potential instability in the banking sector and to ensure that the issues raised are properly determined by the appellate court.