Fidelity Bank is currently facing serious threats of a looming bankruptcy after a Supreme Court panel found the bank liable in a years-long tort dispute with a little-known general services company, Sagecom Concept Ltd based in Ibadan.
The bank, according to reports, has opened talks with lawyers representing Sagecom Concept Ltd to hammer out a repayment plan, but the urgency stipulated in the judgement could hamper the bank’s ability to spread out the N225 billion liability without going bankrupt.
The April 11, 2025, unanimous decision of five justices who heard the matter stemmed from a pair of loans obtained by engineering giant G. Cappa Plc from FSB International Bank in the early 2000s. The loans, recorded as $3 million and N100 million at the time, were executed before Fidelity Bank bought FSB International and its liabilities as part of the banking sector consolidation in 2005.
The cumulative facility was issued at prohibitive interest per annum, and Fidelity began seizing G. Cappa’s assets in Ikoyi and Ibadan that had been used to secure the deal when the company allegedly defaulted in 2005. G. Cappa sued at the time, and a federal judge in Lagos ordered Fidelity to desist from its aggressive depletion of G. Cappa’s assets, court documents said.
But Fidelity’s management failed to obey the court order, and instead listed the assets for sale to potential buyers, including Sagecom. Court documents said Sagecom, run by Bamidele Ogunkanmi and U.S.-based Nigerian Dakore Miriki, paid N350 million to buy some of the properties from Fidelity Bank, but the company quickly sought to recoup its payment after seeing a January 2006 disclaimer that said a court order had enjoined Fidelity from selling G. Cappa’s assets.
The matter was later returned to the Lagos State High Court. After several years of litigation, during which the bank lost repeatedly, including at the Lagos Division of the Court of Appeal, the dispute wound up at the Supreme Court in 2018, leading to the final judgement last month.
“Apart from the mountain of evidence against it, allowing the appellant to escape liability as it so desperately seeks to do here would be tantamount to allowing it to benefit from its own wrong,” the Supreme Court said in its lead opinion by Justice Adamu Jauro. “The notorious principle of equity that a court ought not to allow a person to take advantage of his own wrong still remains part of our jurisprudence.”
Sagecom, represented by Muiz Banire and Adeyinka Olumide-Fusika, successfully argued throughout the case that it suffered damages through Fidelity’s action because it borrowed the N350 million from FMCB to secure the troubled assets from Fidelity, enduring 19.5 per cent annual interest.
Fidelity lawyers argued that the bank was not responsible for the damages and blamed G. Cappa for collecting rents on the Lagos assets following the initial court injunction. But the Supreme Court justices said Fidelity must pay for its apparent decision to disregard a live injunctive relief from a federal court.
“At the heart of the matter lies the appellant’s somewhat egregious conduct in selling a property it knew was subject to a restraining court order,” the court said, adding that Fidelity deprived Sagecom of “the possession and the economic benefits of its purchase for many years.”
The justices were unsparing as to Fidelity management’s conduct at the early stages of the dispute, repeatedly stating throughout the judgement that the bank admitted that it received notice of the injunction that blocked it from selling G. Cappa’s assets but proceeded anyway.
“This was not mere negligence but a deliberate disregard for both the court’s authority (with the intention to undermine it) and the first respondent’s rights as an innocent purchaser,” Justice Jummai Hannatu Sankey said in her concurring opinion. “The law remains that parties to a suit must obey court orders whether or not they are correct.” The three other justices on the panel were Mohammed Lawal Garba, Moore Aseimo Ibrahim Adumein and Abubakar Saqid Umar.
The justices also said that one way Fidelity might have prevailed in its appeal was if the bank had argued that there had been a perversion or miscarriage of justice in the lower courts.
Consequently, the Supreme Court upheld the damages as calculated by the Lagos high court and imposed against Fidelity in a June 20, 2011, judgement, which Fidelity appealed. The Lagos judge, whom the Supreme Court lauded for doing a good job on the case, had ordered Fidelity to pay accrued earnings for several flats over many years Sagecom was unable to take possession of the assets.
Following the Supreme Court judgement, Justice Olabisi Akinlade of the Lagos State High Court calculated damages due to Sagecom, as of May 16, 2025 to be $139,064,896.18, with the court putting the naira value at N225,285,131,812.38 -using N1620 per dollar as of the close of business on May 15, 2025.
Officials said Fidelity planned to argue the calculation during a court hearing before Mrs Akinlade, scheduled for May 19, However, sources familiar with the matter said it was unlikely the calculation would change.