…bank seeks clarification as CBN moves to reassure public
In a landmark decision that closes a nearly two-decade legal saga, the Supreme Court of Nigeria has affirmed a judgement debt against Fidelity Bank Plc, that could exceed $138.8 million (N222 billion), in favor of Ibadan-based firm Sagecom Concepts Limited.
The apex court upheld the rulings of both the High Court and the Court of Appeal, concluding that Fidelity Bank acted unlawfully in a disputed property transaction and must now face the financial consequences.
The judgment, delivered unanimously by a five-member panel led by Justice Adamu Jauro, on April 11, 2025, found Fidelity Bank and construction firm G. Cappa Plc jointly and severally liable for special damages awarded to Sagecom.
At the heart of the case was a property at 25 Probyn Road, Ikoyi, Lagos — comprising ten flats and two penthouses — that was improperly sold by Fidelity Bank despite a valid court injunction.
The Supreme Court slammed Fidelity Bank for what it called “egregious conduct” and a brazen attempt to “benefit from its own wrong” after the bank ignored a court injunction and sold the property in question despite ongoing litigation. Justice Adamu Jauro, delivering the lead judgment, emphasized that the bank’s disregard for lawful orders deprived Sagecom of economic benefits for years, violating fundamental principles of equity.
Justice Jummai Hannatu Sankey, in a concurring opinion, added that Fidelity Bank’s actions had inflicted direct financial losses on Sagecom, and the bank must be held accountable. “Our legal system does not countenance such an outcome,” she said, invoking the legal principle that one should not profit from their own wrong.
The genesis of the dispute dates back to 2005, when G. Cappa defaulted on a $3 million loan secured from Fidelity Bank. As part of the collateral, the property in Ikoyi was mortgaged. Following the default, Fidelity appointed Hemaco Commercial Enterprises to sell the property. Hemaco then sold it to Sagecom for N350 million, financed by First City Monument Bank (FCMB). However, at the time of the sale, a restraining order had already been issued by the Federal High Court, barring Fidelity from taking any action on the property.
Despite the court order, the sale proceeded, triggering a lengthy legal battle. Sagecom, unable to take possession of the property, sued both Fidelity and G. Cappa for special damages. The High Court of Lagos ruled in favor of Sagecom, a decision later affirmed by the Court of Appeal and now upheld by the Supreme Court. With 19.5% compound interest per annum applied retroactively from 2011, the judgment debt could far exceed the $138.8 million baseline.
In response to the Supreme Court ruling, Fidelity Bank released a statement downplaying the financial impact, claiming the actual payable amount is closer to N14 billion (approximately $10 million), based on 2005 exchange rates.
“There are significant ambiguities in the judgment,” the bank argued, noting that it has formally applied to the court for clarification and proper interpretation of the ruling.
The bank added that it remains committed to settling its legacy obligations arising from its acquisition of the deduct FSB International Bank but insisted on an accurate computation of liability, which it believes has been overstated due to fluctuating currency rates.
As concerns mounted over the potential systemic implications of the massive judgment, the Central Bank of Nigeria (CBN) quickly moved to calm public nerves.
In a statement signed by the Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, the apex bank reassured depositors and stakeholders that the Nigerian banking sector remains “resilient, safe, and sound.”
While not naming Fidelity Bank directly, the CBN addressed what it called “misleading information” circulating on social media. “The institution referenced is held to stringent regulatory requirements, and there is no cause for concern regarding the safety of depositors’ funds,” the statement read.
The CBN emphasised its commitment to monitoring all financial institutions under its purview through robust frameworks and risk-based supervision. “We urge the public to disregard sensational or unverified claims and rely solely on official channels for information about the financial system,” it added.
