FIRST CITY MONUMENT BANK PLC v. ABDUL GAFARU & CO. LTD. & ORS.
SUPREME COURT OF NIGERIA
(OKORO; OGUNWUMIJU; OGBUINYA; ADAH; UMAR)
FACTS
Abdul Gafaru & Co. Ltd. (the 1st Respondent) obtained an arbitral award against the Federal Government of Nigeria and subsequently commenced garnishee proceedings at the Federal High Court, Abuja, to enforce the award. The Court made a garnishee order absolute against funds belonging to the Federal Government in the Consolidated Revenue Fund of the Federation, held by the Central Bank of Nigeria (CBN), for the satisfaction of the judgment debt.
Pursuant to the garnishee order, the CBN transferred ₦3,040,094,393.57 to First City Monument Bank Plc (the Appellant) for the benefit of the 1st Respondent. The Appellant sought confirmation of the transfer from the CBN, which subsequently confirmed that the payment was valid and had been made to the 1st Respondent’s account domiciled with the Appellant. Meanwhile, the Respondents approached the High Court of Nasarawa State and obtained an order directing the Appellant to credit the 1st Respondent’s account with the judgment sum within 48 hours. Following the CBN’s confirmation, the Appellant credited the 1st Respondent’s account with the judgment sum. By agreement of the parties, the funds were placed in an interest-yielding call account, which earned interest of ₦6,802,834.18 during the initial 13-day period. The interest was subsequently paid to the 1st Respondent.
However, the Attorney-General of the Federation (AGF) directed the Appellant not to release the funds to the 1st Respondent, contending that the requisite statutory consent to commence the garnishee proceedings had not been obtained. The AGF subsequently requested the CBN to instruct the Appellant to recover the funds already released. In compliance with the directive, the Appellant placed a Post-No-Debit restriction on the 1st Respondent’s account and remitted the remaining balance of ₦1,718,996,983.16 to the CBN after the 1st Respondent had withdrawn ₦1,321,097,410. Following verification of the judgment debt, the AGF authorised the Appellant to credit the 1st Respondent’s account with the verified judgment sum.
Aggrieved by the restriction placed on the account, the Respondents instituted an action against the Appellant before the High Court of Nasarawa State, claiming interest on the funds, reimbursement of legal expenses, general damages of ₦500,000,000 for the alleged embarrassment, humiliation, trauma and discomfort suffered by their directors and officers following the dishonour of drafts and cheques issued to third parties, post-judgment interest, and an order directing the Appellant to publish an apology in national newspapers.
The trial Court entered judgment in favour of the Respondents and awarded ₦95,947,272.04 as interest and ₦150,000,000 as damages. Dissatisfied with the decision, the Appellant appealed to the Court of Appeal, which affirmed the judgment of the trial Court and dismissed the appeal. Still aggrieved, the Appellant further appealed to the Supreme Court. One of the issues submitted for determination was: Whether the lower court was right in affirming the decision of the trial court awarding damages in the sum of N95,947,272.04 as balance of interest and N150,000,000.00 in special and general damages.
ARGUMENTS
Learned Counsel for the Appellant argued that the lower Courts erred in affirming the award of damages for emotional injury in favour of the Respondents. Counsel submitted that a company, being an artificial legal person, could not experience human emotions such as embarrassment, humiliation, trauma, anxiety or frustration. According to counsel, those feelings are peculiar to natural persons and cannot be attributed to an incorporated entity merely because its business operations have been disrupted. Counsel maintained that the legal personality conferred on a company enables it to own property, enter into transactions, sue and be sued, but does not endow it with the physical or emotional attributes of a human being.
Counsel further argued that, although a company could institute an action to recover damages for injuries suffered in its own legal or commercial capacity, such relief did not extend to compensation for emotional suffering allegedly experienced by its directors or officers. It was contended that the claim for damages was specifically founded on the embarrassment and humiliation allegedly suffered by the Respondents’ directors and officers following the dishonour of drafts and cheques. Consequently, the award of damages to the Respondents, rather than to the individuals who allegedly experienced the emotional injury, amounted to granting relief to parties who had not sought it in their personal capacities. Counsel distinguished losses suffered by a company in its business, property or commercial reputation from personal feelings experienced by individuals acting on its behalf. He therefore urged the Supreme Court to set aside the award.
In response, Learned Senior Counsel for the Respondents maintained that the lower Courts were right to affirm the award of damages. He argued that the Respondents had established, through credible evidence, that the restriction placed on their funds disrupted their business transactions and prevented them from meeting their financial commitments. It was submitted that the dishonour of drafts and cheques issued to suppliers, agents and business partners exposed the Respondents’ directors to embarrassment and hardship in their commercial dealings. Counsel further contended that the Appellant had not effectively challenged the evidence demonstrating the consequences of its actions. In his view, the evidence before the trial Court sufficiently established the adverse effect of the restriction on the Respondents’ operations and the standing of those who conducted their affairs. He accordingly urged the Court to uphold the concurrent decisions of the lower Courts.
DECISION OF THE COURT
In resolving the issue, the Supreme Court held that:
Damages founded on personal suffering and human emotions cannot be awarded to a company because a company, as an artificial person and a creation of law, does not possess human feelings and cannot suffer emotional injury in the manner of a natural person. A company cannot experience shock, anxiety, humiliation, trauma or emotional distress. Accordingly, a claim based on such personal experiences must be distinguished from a claim for loss or injury sustained by the company in its own legal, proprietary or commercial capacity.
The Supreme Court explained that directors and officers may experience embarrassment, humiliation or emotional distress in the course of performing their duties, but such experiences cannot automatically be attributed to the company as though it were a natural person. The fact that a company’s business operations have been disrupted, or that its directors have suffered personal embarrassment, does not, without more, entitle the company to recover damages for emotional injury. A company may seek compensation for losses suffered in relation to its business, property, funds or commercial interests, where those losses are properly pleaded and proved. It cannot, however, recover damages for pain, humiliation, trauma or emotional distress because those are experiences associated with natural persons. Where directors or officers allege that they personally suffered such injury, the claim belongs to them in their individual capacities and must be pursued on that basis.
In the instant case, the Court held that the Respondents, being incorporated companies, could not recover damages for the alleged embarrassment, humiliation, trauma and discomfort suffered by their directors and officers.
Issue resolved in favour of the Appellant.
Ogunmuyiwa Balogun, Esq., with Babatunde Ige, Esq., Amazing Ikpala, Esq., and Omonye Egboja, Esq., for the Appellant.
Wale Balogun, SAN, with Adebanji Dada, Esq., Olajide Olaleye Kumuyi, Esq., Favour Otuneye, Esq., and Joy Okenwa, Esq., for the Respondents.
This summary is fully reported at (2026) 10 CLRN in association with ALP NG & Co.
See www.clrndirect.com ; www.alp.company.
