Court orders First Bank to pay Kano businessman N2.4bn over contract breach

A Federal High Court in Kano has ordered First Bank of Nigeria Plc to pay N2.4 billion in damages and refunds to Kano-based businessman, Alhaji Tasiu Ilu Kura, and his company, Kura Brothers Nigeria Limited, over breach of contract and unauthorised debits linked to letters of credit transactions.

Justice S. Amobeda delivered the judgment on January 19 in suit number FHC/KN/CS/483/2024, filed by Kura Brothers Nigeria Limited and Tasiu Ilu Kura against the bank.

The dispute arose from a series of letters of credit (LC) arrangements between the parties, which the plaintiffs said were mishandled by the bank.

The court found that First Bank unlawfully prolonged the transactions beyond the agreed timeline, imposed excessive charges, made unauthorised debits, and failed to issue letters of credit as instructed, actions which resulted in financial losses and business disruption for the plaintiffs.

Justice Amobeda ruled that the bank acted outside the terms of its March 23, 2018 offer letter, which stipulated that the LC transactions should be concluded within 60 days, and also violated Central Bank of Nigeria regulations governing such transactions.

The court described the debits on the company’s accounts as unlawful and carried out in bad faith to unjustly enrich the bank.

Among the sums awarded, the court ordered the bank to refund N480 million held in one of the plaintiffs’ accounts since 2021, N300 million withdrawn from the main account, and N150.8 million and N196.6 million charged as excess LC-related fees, along with other unauthorised deductions.

In addition, the court awarded N1 billion as general damages for what it termed a “flagrant breach” of the terms and conditions of the letter of credit transactions.

The judge also nullified any letters of credit or foreign exchange transactions conducted outside the agreed timeline and declared all related charges invalid.

The court further held that Kura Brothers was not indebted to the bank, noting that the accounts had been fully funded in line with the agreed terms.

Reacting to the judgment, the Kura brothers commended the judiciary for upholding justice, stating that the lawsuit was filed after the bank’s alleged wrongful and negligent actions caused significant financial losses, operational setbacks and reputational damage to the company.

They described the bank’s conduct as oppressive and injurious to their business.