Atoyebi v. Barclays Bank Plc: Jurisdictional Implications for Representative Offices & International Banks

The decision in Atoyebi v. Barclays Bank Plc[1] is important for international banks with representative offices in Nigeria. In that case, the Supreme Court held that a Nigerian court could exercise jurisdiction over a claim for breach of contract involving a foreign bank where the contract was made through its Nigerian representative office. The Court relied on Order 8 Rule 1(e)(ii) of the High Court of Lagos State (Civil Procedure) Rules, which permits service outside the jurisdiction where a contract is made “by or through an agent residing or carrying on business within jurisdiction” on behalf of a principal residing or carrying on business outside the jurisdiction.

Importantly, the Nigerian representative office of Barclays Bank Plc, was not itself conducting banking business or licensed to accept deposits, grant credit or execute banking operations. The decision therefore raises questions about the jurisdictional consequences of the activities performed by local representative offices on behalf of foreign banks.

Our Comments

The decision should not be read as establishing a general rule that the existence of a representative office in Nigeria, or its involvement in customer acquisition, is sufficient to confer jurisdiction on Nigerian courts over its foreign parent. Its application must be understood in the context of the facts before the Court and the requirements of Order 8 Rule 1(e)(ii).

In this case, the appellant pleaded that he submitted the necessary documents and completed the formalities for opening his account with Barclays Bank Plc in England through the Nigerian representative office. The judgment records that the respondents did not deny that the documents and account-opening formalities were handled through that office. The Supreme Court considered these circumstances sufficient to bring the claim within the relevant provision of Order 8.

Although the account in dispute was held with Barclays Bank Plc in England and the allegations concerned the dishonour of cheques and related banking matters arising from that relationship, the Supreme Court appears to have taken the view that these circumstances do not, by themselves, determine jurisdiction. Nor does the foreign location of an account automatically exclude the jurisdiction of a Nigerian court. Thus, the threshold question remains whether the particular circumstances satisfy the applicable procedural rules for service outside the jurisdiction.

Nevertheless, the Court’s broad interpretation of Order 8 highlights the potential for a foreign bank to face jurisdictional exposure in Nigeria where its local representative participates in the account-opening process, even though the underlying banking relationship is maintained abroad.

Therefore, international banks with representative offices in Nigeria may need to review their account-opening processes and the functions performed by their Nigerian representative offices to assess and mitigate potential jurisdictional exposure. The handling of customer documentation, the completion of account-opening formalities and the extent to which local offices participate in establishing contractual relationships with foreign banking entities are all key factors in assessing jurisdictional exposure.

On the facts, one possible response for international banks is to review whether their Nigerian representative offices need to participate directly in the account opening process. For example, a representative office might be limited to advertising the bank’s services, providing general information and directing prospective customers to the foreign bank’s website, with applications, supporting documents and account-opening formalities handled directly between the customer and the foreign bank. Such an arrangement could provide a basis for arguing that the offshore banking contract was not made through the Nigerian representative office.

Key Takeaways

The decision does not make the mere existence of a representative office sufficient to confer jurisdiction, but it makes the nature and extent of that office’s involvement an important consideration. The Supreme Court’s interpretation of Order 8 Rule 1(e)(ii) suggests that an agent need not have authority to conclude a contract for its involvement in making the contract to support service outside Nigeria. International banks should therefore review the functions of their Nigerian representative offices and their account-opening processes, particularly the handling of customer applications and contractual formalities, to assess and mitigate potential jurisdictional exposure.

[1] The appeal concerned the validity of service of originating court processes on Barclays Bank Plc outside Nigeria. The Supreme Court allowed the appeal on the jurisdictional issue and remitted the matter for further proceedings. It did not determine the substantive merits of the appellant’s claim or whether Barclays had in fact breached the banking contract.