Central Bank summons senior lawyers, challenges court decision on Union Bank acquisition

The Central Bank of Nigeria has established a high-powered legal team, comprising Senior Advocates of Nigeria, to challenge a Federal High Court judgment that nullified its takeover of Union Bank of Nigeria Plc and ordered the reinstatement of the bank's former board.

This legal team, led by Yusuf Ali, SAN, and including Kemi Pinheiro, SAN; Tunde Fagbohunlu, SAN; Uche Val Obi, SAN; and Chukwudi Enebeli, SAN, was formed in response to the March 25 judgment delivered by Justice Chukwujekwu Aneke.

The CBN filed a notice of appeal on March 26, 2026, contesting the judgment, which held that the apex bank acted beyond its statutory powers in dissolving the bank's board and management.

The appeal, which raises 11 grounds, urges the appellate court to set aside the entire decision of the lower court, arguing that the CBN's intervention in Union Bank was backed by provisions of the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA) 2020.

The CBN cited the bank's deteriorating financial condition at the time, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and a high volume of non-performing loans, as evidence that necessitated urgent regulatory action.

According to the apex bank, Section 34 of BOFIA grants it the power to remove directors and officers of a distressed bank, while Section 51 protects actions taken in good faith in the course of its statutory duties.

The CBN faulted the trial court's interpretation of these provisions, describing the judgment as a miscarriage of justice, and contended that the court erred in declaring its actions unlawful, ultra vires, and unconstitutional.

The apex bank also argued that the court was wrong to nullify decisions taken by the management it appointed without establishing any legal basis for reinstating the former board.

Meanwhile, the CBN has filed a motion on notice seeking a stay of execution of the judgment pending the determination of the appeal, urging the court to restrain the reinstated directors and other respondents from taking control of the bank.

The motion also seeks to prevent the respondents from interfering with the bank's management, convening meetings, or altering its governance structure, as well as to stop actions that could destabilise the bank, including media engagements.

The respondents in the matter include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, and former directors of Union Bank, such as Bayo Adeleke and Yetunde Oni, who had approached the Federal High Court as beneficiaries of Union Bank shares.

In an affidavit supporting its application for stay, the CBN warned that enforcing the judgment could disrupt the bank's operations, weaken public confidence, and pose systemic risks to the financial sector.

The apex bank stressed that the appeal raises critical questions on the scope of its regulatory powers and argued that failure to grant a stay could render the appeal nugatory.

The CBN added that maintaining the status quo is essential to preserving stability in the banking system while the appellate court determines the issues, which it said have far-reaching implications for banking regulation in Nigeria.