The Central Bank of Nigeria (CBN) has filed an appeal against a recent Federal High Court judgment that nullified its takeover of Union Bank of Nigeria and ordered the reinstatement of the bank’s former board of directors.
The move marks the latest development in a high-profile legal and financial dispute that has drawn attention across Nigeria’s banking sector. The CBN is also seeking an order to temporarily stop the enforcement of the judgment while the appeal is being heard.
The case began after a ruling by Chukwujekwu Aneke of the Federal High Court in Lagos on March 25, 2026. In his decision, the judge held that the CBN acted outside its legal powers when it dissolved the board and management of Union Bank.
The court also directed that the bank’s former directors be reinstated, effectively reversing the actions earlier taken by the apex bank.
However, the CBN has strongly disagreed with the judgment. In its response, the bank described the ruling as legally flawed and inconsistent with its responsibilities as a regulator of the financial system.
The appeal, filed on March 26, 2026, contains 11 grounds in which the CBN is asking the appellate court to set aside the entire judgment. The legal team representing the apex bank is led by Yusuf Ali, alongside other senior lawyers including Kemi Pinheiro (SAN), Tunde Fagbohunlu (SAN), Uche Val Obi (SAN), and Chukwudi Enebeli (SAN).
In one of its key arguments, the CBN stated that the trial judge made an error in law by ruling that the bank acted beyond its powers. According to the apex bank, its intervention in Union Bank was necessary at the time due to serious financial problems facing the institution.
The CBN explained that evidence presented in court showed that Union Bank was in a difficult financial position. It pointed to issues such as a negative capital adequacy ratio, a capital shortfall of more than N224 billion, and a high level of non-performing loans.
In simple terms, these indicators suggest that the bank was struggling to meet its financial obligations and could have faced serious risks if no action was taken.
The apex bank argued that it had a duty to act quickly to prevent a wider crisis in the banking sector. It said its actions were aimed at protecting depositors’ funds and maintaining confidence in Nigeria’s financial system.
To support its position, the CBN relied on provisions of the Banks and Other Financial Institutions Act 2020 (BOFIA) and the Central Bank of Nigeria Act. These laws give the apex bank powers to regulate financial institutions and take action when a bank is in trouble.
According to the CBN, Section 34 of BOFIA allows the CBN Governor to remove directors and officers of a bank that is in a critical condition. It also cited Section 51, which protects actions taken in good faith while carrying out official duties.
The apex bank argued that the trial court misunderstood these provisions, leading to what it described as a miscarriage of justice. It said the lower court wrongly declared its actions unlawful and went further to cancel all decisions taken by the management it had appointed.
In addition to filing the appeal, the CBN has also asked the court for a stay of execution of the judgment. This means it wants the court to pause the enforcement of the ruling until the appeal is decided.
The bank warned that allowing the judgment to take immediate effect could disrupt the operations of Union Bank. It expressed concern that the reinstated directors might take steps that could destabilise the bank’s governance structure.
In its application, the CBN urged the court to prevent the respondents from taking control of the bank, holding board meetings, or making changes that could affect its stability. It also asked the court to stop any public statements or actions that might create uncertainty in the financial system.
The respondents in the case include Titan Trust Bank Limited, as well as Luxis International DMCC and Magna International DMCC. Several former directors of Union Bank, including Bayo Adeleke and Yetunde Oni, are also part of the case.
These parties had approached the court as beneficiaries of shares in Union Bank. They challenged the CBN’s decision to take over the bank, arguing that it was not in line with the law.
The dispute highlights the delicate balance between regulation and corporate governance in Nigeria’s banking sector. The CBN is responsible for ensuring that banks operate safely and do not pose risks to the economy. At the same time, shareholders and directors have rights that must be protected under the law.
Over the years, the CBN has intervened in several banks facing financial difficulties. Such interventions are often aimed at preventing bank failures, which can have serious consequences for customers and the wider economy.
Nigeria’s banking sector has experienced crises in the past, particularly during the global financial crisis of 2008–2009, when several banks required regulatory action to survive. Since then, stricter rules and oversight have been introduced to strengthen the system.
This background explains why the current case is being closely watched. It raises important questions about how far the CBN can go in exercising its powers and what limits exist under the law.
In its appeal, the CBN said the case involves significant legal issues that need to be clarified. It stressed that the outcome could affect not just Union Bank, but the entire banking industry.
“This appeal presents substantial and arguable issues of law touching on the powers of the Central Bank under BOFIA and the need to maintain financial system stability,” the apex bank stated.
For now, the Court of Appeal has not fixed a date to hear the case or decide on the application for a stay of execution.
As the legal battle continues, customers, investors, and industry stakeholders are watching closely. The final outcome could shape how banking regulation is applied in Nigeria in the years ahead.
Until then, the situation remains uncertain, with both sides preparing for what is expected to be a closely contested legal process.