Unfreezing a bank account in Nigeria becomes necessary when a customer’s account has been frozen or placed on hold by the bank. Once an account is frozen, the customer cannot access their funds or carry out any transactions.
A bank may freeze an account for several reasons, including a customer’s request to prevent fraud or, more commonly, pursuant to a court order served on the bank through a law enforcement agency. This write-up focuses on situations where an account is frozen by court order and how such an order can be lifted where it ought not to have been granted.
Freezing a Bank Account by Court Order
This is one of the most common grounds for freezing a bank account. When a court order is issued, usually through the Police, the Economic and Financial Crimes Commission (EFCC), or other law enforcement agencies, the bank is legally obligated to comply. In some cases, the order may even prohibit the bank from notifying the affected customer.
Section 34(1) of the Economic and Financial Crimes Commission (Establishment) Act 2004 permits the Chairman of the EFCC, or an authorized officer, to apply ex parte to a court for authority to direct a bank to freeze any account if satisfied that the funds in that account are proceeds of an offence.
Where an account is frozen and criminal charges are subsequently filed against the account holder, the customer may be unable to unfreeze the account until the criminal trial is concluded.
Under the Advance Fee Fraud and Other Related Offences Act and similar laws, the EFCC may also seek a court order for permanent forfeiture of frozen funds to the government if:
- No one claims the funds within 14 days of publication of the ex parte order in a national newspaper, or
- The person claiming the funds cannot satisfactorily explain the legitimate source of the money.
However, court orders may sometimes be granted based on incomplete or inaccurate information supplied by law enforcement agencies. In such cases, the affected account holder is entitled to approach the court to have the freezing order vacated.
Setting Aside the Court’s Order
A frozen bank account can be unfrozen by applying to the same court that granted the freezing order or to any court with competent jurisdiction to set aside that order. The first step is to engage a lawyer to investigate the circumstances surrounding the order.
Importantly, law enforcement agencies and banks do not have the power to freeze a customer’s account solely on the basis of suspicion or pending investigation without a court order. This principle was affirmed in Guaranty Trust Bank PLC v. Adedamola & Ors (2019) LPELR-37310(CA).
A frozen account prevents the customer from making withdrawals, deposits, or any other transactions until the issue leading to the freeze is resolved. Where an account is frozen pursuant to a court order, the account holder may apply to the court to discharge or set aside the order. The court will only unfreeze the account if it is satisfied that the initial order was granted in error or was based on misrepresentation or incomplete information supplied by the law enforcement agency that obtained it.