Posted on: May 27 2013
Thousands of aggrieved customers of First Bank Nigeria (FBN), including Dr Olisa Agbakoba, SAN, have filed a major class action against the leading Nigerian bank, claiming gross mismanagement of their margin loans running into billions of naira.
The claim of the customers is that the Bank failed to use its professional expertise and skills to manage, operate and control the loans. The customers further claim that it was the responsibility of the bank to manage the risks of the loans and its failure led to colossal losses.
Although, aggrieved customers of banks and investment houses in Nigeria have found it difficult to successfully prosecute their claims in relation to injuries occasioned by margin loan agreements because of the nature and structure of the contracts entered into, this case appears to be different on the evidence seen thus far.
The customers specifically allege that in their case FBN took the contractual responsibility to manage the risks associated with the margin loans and it was its failure to manage the loans in accordance to the contract that led to their losses.
It is a case that offers a different dimension to the understanding of liability, responsibility and the pursuit of restitutions in margin loan transactions. It will surely present a litmus test for the banking industry and perhaps may open doors for other litigations. Top city commercial lawyers are of the opinion that this case may present a landmark judgment one way or the other in relation to banking risks.
Enquiries at the Federal High Court, Lagos show that lawsuits, FHC/L/CS/700/2013 and FHC/L/CS/699/ 2013, filed by the law firm of Olisa Agbakoba & Associates have been lodged. However, no date has been fixed for the hearing.