Court Slams UBA Over N57m Loan Dispute, Orders Refund to Customer

In a landmark judgement, the Tapa Commercial Division of the Lagos State High Court on Wednesday, dismissed a multi-million Naira debt recovery suit filed by United Bank for Africa Plc against its customer, Arueyingho Gbemi Mac, finding that the bank acted in breach of regulatory and fiduciary obligations.

 Justice A. M. Ipaye, who presided over the case (LD/146/2013), ruled that UBA failed to establish its claim that the Defendant owed N57.4 million under a 2007 mortgage facility, and instead found the customer is entitled to a credit balance of N7,574,592.87.

 UBA had sought to recover the alleged debt, charge interest at 22% per annum, and obtain a court order to sell a mortgaged property in Lekki Phase 1, Lagos, alleging the loan had become non-performing due to repayment defaults.

The Defendant, through his Lawyer,  Emmanuel Umoren, countered that the bank imposed excessive and unauthorised charges, breached contractual and regulatory obligations, and prematurely called in the loan before the agreed 10-year tenure had expired.

 Central to the judgement was an independent auditor’s report, commissioned via a court-approved process involving the Chartered Institute of Bankers of Nigeria, which revealed unlawful charges totalling over N51.9 million, including inflated interest and unauthorised fees violations of CBN guidelines.

 Justice Ipaye held that the bank had breached its fiduciary duty, and after removing the excess charges, the Defendant was not indebted to UBA. The court dismissed all claims, set aside an interlocutory judgement from 2014, and ordered UBA to return all title documents immediately.

 Additionally, the Judge awarded the customer N7.57 million with 10% annual interest from the date of judgement until full payment, sending a strong signal to banks on the limits of their regulatory and contractual authority over customers.