A joint bank account is an account operated in the names of two or more persons. Joint accounts are commonly used by spouses, business partners, family members and other persons who wish to operate an account together. A common question is whether a bank can freeze a joint account because of a problem involving only one of the account holders. Yes, a bank can place a restriction on a joint account in appropriate circumstances. However, the fact that one joint account holder has a dispute, debt or legal problem does not automatically give the bank an unrestricted right to freeze the entire account. The legality of the restriction depends on the reason for the freeze, the account mandate, the bank’s contractual terms, any applicable regulatory or statutory authority and, where relevant, the existence and scope of a court order. Nigerian case law also establishes that a bank owes its customers contractual duties and must exercise reasonable care and skill in operating their accounts. In Bernard & Anor v. FCMB Ltd (2022) LCN/16024(CA), the Court of Appeal considered a restriction placed on a business savings joint account and affirmed that an unjustified restriction can constitute a breach of the banker-customer relationship. What Is a Joint Bank Account? A joint account is an account opened in the names of two or more persons. The manner in which the account can be operated is determined by the account mandate. For example, a joint account can be structured so that: either account holder can give instructions independently; all account holders must sign before a transaction can be carried out; or a specified number of the account holders must authorise a transaction. The Central Bank of Nigeria’s account-opening framework recognises joint accounts and provides for an account mandate specifying the authority by which the account is to be operated. The particular mandate governing the account is therefore important when determining the rights of the joint account holders. Can a Bank Freeze a Joint Account? Yes. A bank can restrict a joint account where there is a lawful basis for doing so. For example, a restriction can arise where: there is a valid court order; the bank is required to comply with a lawful regulatory or statutory requirement; there is a legitimate dispute concerning the ownership or operation of the funds; the account is connected with a suspected fraudulent transaction; the bank is acting pursuant to a valid contractual right; or circumstances surrounding the account require the bank to suspend transactions pending clarification. The bank’s terms and conditions can also be relevant. For example, Zenith Bank’s published account-opening terms provide for the bank to place a hold on an account where there is a dispute concerning funds or another person claims an interest in the funds. However, the existence of a joint account does not give the bank an unlimited power to freeze it whenever one of the account holders has a personal problem. Can a Bank Freeze the Entire Joint Account Because of One Account Holder? It depends on the circumstances. This is the more important question. Where the reason for the restriction relates specifically to one account holder, the bank should have a proper basis for determining the extent of the restriction. For example, suppose A and B maintain a joint account containing ₦10 million. A becomes the subject of a legal dispute concerning ₦2 million belonging to A personally. The fact that A is a joint account holder does not automatically establish that all ₦10 million in the joint account belongs to A or that the entire account should be permanently frozen. The bank must consider the nature of the claim, the account mandate, the source and ownership of the funds where relevant, and the terms of any court order or other legal authority relied upon. What If One Joint Account Holder Owes Money to a Creditor? A personal debt owed by one joint account holder does not automatically mean that the creditor is entitled to all the money in the joint account. Where the creditor has obtained a judgment against one account holder, the appropriate judgment-enforcement procedure must be followed. A creditor cannot simply instruct a bank to take the money of the other joint account holder merely because the debtor happens to be a joint account holder. Where a court order is involved, the precise terms and scope of that order become critical. The non-debtor joint account holder should therefore obtain legal advice immediately if a joint account has been restricted because of the other holder’s personal debt. Can a Bank Freeze a Joint Account Because of a Court Order? Yes. Where a valid court order directs a bank to restrict or preserve funds in a joint account, the bank is required to comply with the order within its terms. However, the court order should be examined carefully. The important questions include: Which account is affected? Which account holder is the subject of the proceedings? What amount is affected? Does the order apply to the entire account? Does it restrict withdrawals or completely freeze the account? How long is the order intended to operate? Was the order made by a court with jurisdiction? A bank should not treat an order concerning one person as automatically authorising restrictions beyond the terms of the order. Can the Police Cause a Joint Account to Be Frozen? A police investigation can result in a bank account being restricted, but the bank’s legal authority to impose the restriction must still be considered. This issue arose in Bernard & Anor v. FCMB Ltd. The appellants operated a business savings joint account with FCMB. They complained that the account had been frozen following a Nigerian Police Force instruction. FCMB maintained that it had acted pursuant to a Post No Debit order from a Magistrate Court. The Court of Appeal ultimately dealt with the question of damages and affirmed the lower court’s refusal to award punitive or exemplary damages. Importantly, however, the judgment discussed the contractual banker-customer relationship