A Federal High Court sitting in Kano has ordered First Bank Plc to pay a total of N2.4 billion in damages to Kura Brothers Nigeria Limited over what the court described as flagrant breaches of banking terms and unlawful conduct in a series of letter of credit transactions.

The judgment, delivered on January 19 by Justice S. Amobeda, arose from a suit marked FHC/KN/CS/483/2024, filed by Kura Brothers Nigeria Limited and its principal, Alhaji Tasiu Ilu Kura, against the bank.

The dispute stemmed from several letters of credit (LC) arrangements between the parties, which the plaintiffs said were mishandled by the bank, leading to financial losses and business disruption.

In his ruling, Justice Amobeda ordered First Bank to refund multiple sums to the plaintiffs, including N480 million reportedly held in one of Kura Brothers’ accounts since 2021, N300 million wrongfully withdrawn from the company’s main account, as well as N150.8 million and N196.6 million charged as excess LC-related fees. The court also ordered refunds of other unauthorized debits.

The court held that the bank acted outside the terms of its offer letter dated March 23, 2018, which clearly stated that the LC transactions were to be completed within 60 days. According to the judge, the bank unlawfully prolonged the transactions, imposed excessive charges, made unauthorized debits, and in some cases failed to issue letters of credit as instructed.

“The debits made on the plaintiffs’ LC and main accounts were unlawful, done in bad faith, and aimed at enriching the defendant at the expense of its customer,” the judge said.

The court also declared that Kura Brothers was not indebted to First Bank on the affected accounts, having fully funded them in line with agreed terms.

In a strongly worded ruling, the court nullified all letters of credit and foreign exchange transactions carried out beyond the agreed timeline and declared all charges imposed after the completion of the transactions invalid.

Justice Amobeda awarded N1 billion in damages against First Bank for what he described as a “flagrant breach” of the terms and conditions governing the letter of credit transactions.

Reacting to the judgment, the Kura brothers praised the judiciary for upholding justice and fairness. In a statement, they said the suit was filed after repeated breaches of banking duties by the bank, which allegedly caused serious financial losses, business disruption, and reputational damage to their company.

The statement described the bank’s conduct as negligent, oppressive, and injurious to the business of Kura Brothers Nigeria Limited.