First Atlantic Bank (FAB) has been ordered by the Accra High Court, Commercial Division 6, to pay a staggering total of about GH¢10.54 million to a customer for losses suffered after the bank unlawfully tendered his government bonds into the Domestic Debt Exchange Programme (DDEP) without his consent.
The award includes GH¢8.44 million (GH¢8,439,959.62), representing the amount the second plaintiff, Mr. Sebastian Klenam Asem, would have earned on his bonds had the bank not submitted them into the DDEP and subjected them to a substantially reduced interest regime.
In addition, the court imposed exemplary damages of GH¢2 million and awarded GH¢100,000 as cost of litigation in favour of the plaintiffs.
The plaintiffs, Vihama Energy Company Limited and Mr. Asem, were represented by lawyers from Gratia Law Consult, led by Alfred Paapa Darkwah.
In a judgment delivered on December 12, 2025, the court, presided over by the assertive Justice Sedina Agbamava, held that First Atlantic Bank acted negligently and in clear breach of its fiduciary duty when it unilaterally submitted the customer’s bonds for the debt exchange, thereby depriving him of significantly higher returns he would otherwise have earned.
The case, Vihama Energy Company Ltd & Another v. First Atlantic Bank [TLP-HC-2025-06], has been described by legal observers as one of the most consequential post-DDEP decisions, with far-reaching implications for banks that handled customer investments during Ghana’s controversial domestic debt restructuring.
Bank’s risk argument rejected
In her characteristic crisp and incisive analysis of commercial claims, Justice Agbamava firmly rejected the defence mounted by First Atlantic Bank.
The bank, through its counsel Augustine Kidisil, had argued that the Bank of Ghana was coercive in pushing bondholders into the debt exchange programme.
The bank further claimed that its failure to tender Mr. Asem’s bonds would have posed risks to its own operations and regulatory standing.
The court found these assertions to be unsupported by evidence.
Justice Agbamava ruled that the bank failed to demonstrate any real or imminent risk that justified overriding the clear ownership rights of the bondholder.
She was particularly critical of the bank’s attempt to cloak its unilateral decision with regulatory necessity, stressing that no directive from the Bank of Ghana authorised banks to tender customer bonds without consent.
Fundamental breach of fiduciary trust
In a key passage of the judgment, the court held that First Atlantic Bank fundamentally breached its mandate as a custodian of the customer’s investment.
At page 11 of the judgment, Her Ladyship stated that “the Defendant’s unilateral decision to tender the bonds without the consent of the owner was a fundamental breach of its mandate and fiduciary trust as no such discretion was warranted by the facility agreement or any other instrument.”
The court underscored that banks occupy positions of trust and must act strictly within the confines of authority granted by their customers, particularly where high-value investment instruments are involved.
Facts of the case
The plaintiffs, Vihama Energy Company Limited and Mr. Sebastian Asem, had earlier contracted a loan facility from First Atlantic Bank.
The facility was secured by Government of Ghana Bonds (GOG-26) and ESLA Bonds (ESLA-31), which were duly lodged with the bank as collateral.
According to facts accepted by the court, the plaintiffs at no point executed any documentation or gave any form of consent authorising the bank to tender the bonds into the Government’s Domestic Debt Exchange Programme.
Despite the absence of consent, First Atlantic Bank unilaterally submitted the bonds into the DDEP, claiming it was acting in its own interest and ostensibly to prevent losses.
The bank further alleged that the plaintiffs had defaulted on the loan facility and that the bonds risked becoming worthless if they were not tendered.
Justice Agbamava found no merit in these claims. After reviewing the bank’s more than 100-paragraph Statement of Defence, the court concluded that the plaintiffs had fully discharged their obligations under the loan facility and that the bonds, contrary to the bank’s assertions, ultimately retained their full value.
Evidence undermines bank’s case
The court’s findings were further reinforced by evidence from the bank’s own witness, which revealed that after the commencement of the suit, the bonds were eventually restored to their original status.
However, during the period the bonds were wrongfully lodged under the DDEP, the plaintiffs were denied full coupon payments to which they were lawfully entitled.
This loss of income formed a critical basis for the court’s decision to award GH¢8.44 million to the second plaintiff.
The court noted that the bank’s conduct deprived the customer of accrued interest and exposed him to financial harm without lawful justification.
Exemplary damages as deterrence
In awarding GH¢2 million in exemplary damages, Justice Agbamava made it clear that the court intended to send a strong warning to financial institutions.
The damages, the court held, were necessary to serve as a firm disapproval of what it described as the bank’s “egregious conduct” and to deter similar actions by banks entrusted with customer investments.
The judgment is expected to reverberate across the banking sector, particularly among institutions that took unilateral decisions over customer bonds during Ghana’s domestic debt restructuring, and may open the door for further litigation by affected bondholders seeking redress.
