IN a far-reaching judgment that could redefine financial investigations and law enforcement powers across Nigeria, the Federal High Court sitting in Lagos has ruled that Magistrate, Area, and Customary Courts have no statutory authority to issue orders freezing or restricting customers’ bank accounts, or to reverse financial transactions.
News Point Nigeria reports that delivering judgment in Suit No. FHC/L/CS/07/2025, Aiman Mahfouz v. Fidelity Bank Plc, Justice Ibrahim Ahmad Kala held that such orders fall exclusively within the jurisdiction of High Courts as courts of competent authority under Nigerian law.
“I know of no law that clothes a Magistrate with statutory powers to issue an order restricting or freezing the bank account of a customer or reversing a transaction on the application of law enforcement agencies or even private individuals or organizations,” Justice Kala ruled.
Justice Kala, in his well-detailed judgment, drew the attention of the Nigeria Police Force and other security agencies to the limits of their investigative powers, warning that freezing bank accounts without a valid High Court order is unconstitutional and unlawful.
“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 that is, the High Courts,” he stated.
Justice Kala went further to make what he described as “a clarion call” to heads of the various courts in Nigeria to halt the growing abuse of ex parte orders issued by inferior courts.
He urged them to issue administrative circulars prohibiting Magistrate, Area, and Customary Courts from granting such orders, warning that the practice amounts to a “malfeasance” under the law.
“There is a need for heads of courts to issue circulars for the stoppage of this malfeasant practice by inferior courts under their control,” Justice Kala advised.
He also directed banks and financial institutions across Nigeria to disregard any ex parte order obtained from lower courts that purports to freeze or restrict customers’ accounts, describing such orders as “outside the jurisdictional competence” of those courts.
“By doing so, both the banks and the Nigeria Police Force will safeguard themselves from unnecessary litigation and its attending consequences,” the judge added.
Justice Kala criticized the Nigeria Police Force for enabling the unlawful restriction of the applicant’s account, saying the action constituted a breach of his fundamental rights.
“The Applicant is entitled to compensatory damages for the breach of his fundamental right, specifically against the Nigeria Police Force, being the enablers that secured the purported order of the Magistrate Court, Mararaba,” he said.
However, he noted that the police were not joined as a party to the suit, hence the court could not make a direct order of compensation against them.
The applicant, Aiman Mahfouz, a Lagos-based businessman, filed the suit under the Fundamental Rights (Enforcement Procedure) Rules, seeking judicial relief after his bank account was restricted by Fidelity Bank Plc based on an ex parte order from a Magistrate Court in Osogbo, Osun State, in October 2018.
The applicant’s account remained frozen for years despite a subsequent court order lifting the restriction in March 2023. A letter from the Lagos State Commissioner of Police dated March 10, 2023, directed the bank to implement the lifting order but the restriction persisted.
To his dismay, the bank claimed it was acting on a new Magistrate Court order from Mararaba, Nasarawa State, issued in October 2024, which again restricted the same account.
Frustrated by the continued restriction and lack of any formal charge or allegation, the applicant approached the Federal High Court, arguing that the actions of the bank and the police violated his right to own property, guaranteed under Section 44 of the 1999 Constitution (as amended) and the African Charter on Human and People’s Rights.
Mahfouz asked the court to declare that the respondent whether directly or indirectly had no legal authority to restrict his accounts without due process, and that any reliance on an inferior court’s order was null and void.
Justice Kala upheld his arguments, declaring the orders from the Magistrate Courts of Mararaba and Osogbo to be “null, void, and of no legal effect.”
He further stated that the bank’s reliance on such orders violated the applicant’s fundamental rights, emphasizing that only a High Court may lawfully issue such financial restriction orders in Nigeria.
The ruling is also expected to protect millions of bank customers from arbitrary freezing of their accounts, a practice that has become widespread among law enforcement agencies seeking to enforce economic or criminal investigations.
Justice Kala’s Verdict in Summary:
Magistrate, Area, and Customary Courts lack jurisdiction to freeze bank accounts.
Only High Courts have the constitutional competence to issue such orders.
Banks and police must disregard inferior court orders on account restrictions.
Financial institutions should issue internal circulars warning against compliance with unlawful orders.
Police and inferior courts that violate these principles risk litigation and liability.
For Mahfouz, the ruling marks the end of a seven-year legal ordeal and a major victory for citizens’ rights against institutional overreach.