A landmark ruling by Justice Chukwujekwu Aneke of the Federal High Court in Lagos has upended regulatory precedent in Nigeria’s financial ecosystem, declaring that the Central Bank of Nigeria (CBN) exceeded its statutory authority in dissolving the board and management of Union Bank of Nigeria Plc.
The judgment, delivered in Suit No: FHC/L/MISC/1377/2025, nullifies the apex bank’s January 2024 intervention and raises critical questions about the limits of regulatory power in one of Africa’s most dynamic fintech and banking markets.
The case was brought by Titan Trust Bank Limited, alongside Luxis International DMCC and Magna International DMCC, who identified themselves as the ultimate beneficial owners of Union Bank. They argued that the CBN’s actions; including dissolving the board, installing new management, and initiating a recapitalisation programme was unlawfully diluted their ownership and excluded them from strategic decisions.
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In a sweeping decision, the court ruled that the CBN’s actions were ultra vires and inconsistent with the Banks and Other Financial Institutions Act 2020. It quashed the regulator’s dissolution of the board and invalidated all decisions taken by the CBN-appointed management.
For fintech observers and investors, the most consequential outcome is the immediate reinstatement of the bank’s former leadership under Farouk Mohammed Gumel, alongside a court order barring the CBN from interfering in the bank’s governance, capital structure, or ownership framework.
The ruling also halts the ongoing recapitalisation process and investor selection programme, moves that had implications for capital flows, investor confidence, and potential fintech partnerships tied to Union Bank’s digital banking strategy.
Beyond governance, the court found that the applicants’ fundamental rights were breached, stating they were denied fair hearing despite sanctions linked to a regulatory examination. It highlighted how their stake was reduced from full ownership to 40 per cent and labeled the regulator’s actions as indicative of bad faith.
While the CBN defended its intervention on financial stability grounds, citing a negative capital adequacy ratio, over N224 billion in capital shortfall, and elevated non-performing loans the court emphasized that even crisis-driven oversight must operate strictly within legal boundaries.
Crucially, the ruling clarifies that Section 51 of BOFIA does not grant the CBN immunity from judicial review, reinforcing that regulatory bodies remain accountable under the law. It also affirmed that actions taken by regulator-appointed management teams are subject to court scrutiny.
For Nigeria’s fintech and digital banking space, the judgment sets a significant precedent. It underscores the importance of regulatory certainty, investor protection, and due process, key pillars for sustaining innovation, foreign investment, and trust in the financial system.
The court further ruled that the applicants suffered “continuing injury” after being excluded from management decisions between January 2024 and December 2025, a period marked by critical corporate actions.
On financial claims, the court acknowledged a $190 million investment by the applicants but declined additional damages due to lack of oral evidence.
The decision is expected to reverberate across Nigeria’s banking and fintech sectors, potentially reshaping how regulators engage with distressed institutions and how investors assess regulatory risk in the market.
