The Lagos Division of the Federal High Court has ruled that banks in Nigeria must stop enforcing account-freezing or post-no-debit rulings by magistrates and other lower courts, declaring the orders illegal and beyond their jurisdiction.

Delivering judgment in a suit marked FHC/L/CS/07/2025, Justice Ibrahim Ahmad Kala held that only courts of competent jurisdiction, such as the High Court, can issue valid orders to freeze bank accounts.

The case was filed by a businessman, Aiman Mahfouz, against Fidelity Bank Plc, following multiple ex parte orders obtained by the police from a magistrate’s court in Mararaba, Nasarawa, to restrict his bank accounts.

Through his counsel, Clement Alaye, Mr Mahfouz asked the court to declare the restrictions unlawful, arguing that the police acted outside the law and violated his fundamental right to property and due process.

Justice Kala agreed with the applicant, declaring the magistrate court’s order invalid and setting it aside. The judge noted that the restriction had remained in place for almost a year, adversely affecting Mr Mahfouz’s business.

“The investigative powers of the police do not and can never include the power to freeze an account without a valid order of a court of competent jurisdiction,” the judge ruled.

He also cautioned law enforcement agencies to follow due process in investigating funds suspected to be proceeds of crime, stressing that magistrates’ courts lack the authority to issue freezing orders on bank accounts.

Justice Kala further advised heads of courts across the country to curb the growing misuse of ex parte orders by inferior courts and urged banks to disregard such directives in the future.

“Banks and financial institutions must not recognise ex parte orders obtained from magistrates’, area, or customary courts seeking to restrict or reverse transactions on customers’ accounts,” the judge stated.

Although the applicant sought ₦200 million in damages, the court declined to award exemplary compensation, noting that the police, the main actors behind the illegal order, were not joined as parties in the suit.

However, the judge awarded ₦500,000 in costs against Fidelity Bank for its role in executing the unlawful restriction.