Supreme Court orders Fidelity Bank to pay ₦225bn to Ibadan Firm in Landmark Judgment

The Supreme Court of Nigeria has ordered Fidelity Bank Plc to pay a staggering ₦225.3 billion in damages to Ibadan-based firm, Sagecom Concept Limited, after a lengthy tort dispute that has rocked the country’s financial sector.

Fidelity Bank is currently negotiating with Sagecom’s legal team for a possible structured repayment plan, though insiders say the urgency of the apex court’s ruling may limit the bank’s chances of staggering the payments without risking a financial crisis.

“This is the biggest crisis the bank has ever faced,” a senior official confided in News360 Nigeria over a video call at the weekend.”

“The obligation is simply too big. If the bank survives this, it’ll be thanks to the goodwill of the small business that won this unprecedented judgment.”

Despite the bank’s recent market performance, with its shares closing at ₦20.80 per unit on Friday and enjoying a 140 percent rally this year, Fidelity’s financial position remains fragile.

Although it posted a ₦385 billion pre-tax profit in 2024, officials admit much of that was tied up in rolled-over loans, raising doubts about its ability to honour the court-ordered payout.

So far, no other financial institution has volunteered to back the liability, with industry sources warning that the Central Bank of Nigeria (CBN) may be forced to intervene to prevent the collapse of a tier-one bank at a time the economy is already fragile.

Neither Fidelity Bank nor its legal representatives, including senior advocates Kanu Agabi and Onyechi Ikpeazu, have publicly commented on the matter.

The legal dispute dates back to the early 2000s when engineering firm G. Cappa Plc took two high-interest loans from FSB International Bank, one for $3 million and another for ₦100 million.

Fidelity Bank later acquired FSB and its liabilities during the 2005 banking consolidation.

After G. Cappa allegedly defaulted, Fidelity seized assets in Ikoyi and Ibadan that had been pledged as collateral.

A federal judge had ordered Fidelity to halt the asset sales, but the bank proceeded regardless, eventually selling some of the properties to Sagecom for ₦350 million.

Sagecom, co-founded by Bamidele Ogunkanmi and US-based Dakore Miriki, later discovered a court-issued 2006 disclaimer prohibiting those sales and demanded a refund, citing the earlier injunction.

The matter dragged through the Lagos High Court, the Court of Appeal, and eventually the Supreme Court, which on April 11, 2025, ruled in favour of Sagecom.

Delivering the lead judgment, Justice Adamu Jauro said allowing the bank to escape liability would amount to it benefitting from its own wrongdoing.

Concurring, Justice Jummai Hannatu Sankey described Fidelity’s actions as a “deliberate disregard” for the court’s authority and Sagecom’s rights.

The Lagos High Court had initially awarded compensation in 2011 for Sagecom’s lost rental income on the properties. Justice Olabisi Akinlade recently updated the award to reflect prevailing values: $139 million, which now amounts to ₦225.3 billion using the current exchange rate of ₦1,620 per dollar as of May 15, 2025.

Fidelity is expected to challenge the updated figure during a May 19 court session, but insiders predict little chance of success, with Justice Akinlade making it clear the final naira equivalent will be pegged to the official exchange rate on the payment day.

The bank, led by its first female CEO, Nneka Onyeali-Ikpe, is Nigeria’s sixth-largest by assets and has faced persistent criticism over its aggressive loan recovery tactics, a policy it has often attributed to cbn pressure.

The apex bank is yet to officially comment on this latest development.