Keystone Bank Limited v. Dr. Vincent O. Ebuh & 2 Ors. [2026]

Introduction

Nine years is a long time to wait before asking for your money back — long enough, as it turned out here, to lose the right to ask at all. This was a cross-appeal against the decision of the Court of Appeal, which had struck out a shareholder's claim for a refund on jurisdictional grounds after first ruling, on the merits, that the claim wasn't statute-barred. The Supreme Court, unanimously allowing the cross-appeal, went further than either court below and dismissed the claim outright.

Facts of the Case

In November 2007, Keystone Bank Limited (then operating under an earlier corporate identity) issued a prospectus for an Initial Public Offer. Dr. Vincent Ebuh applied to acquire 30,000,000 shares and paid for them. When allotment happened on 7th April 2008, he received only 4,335,000 shares — leaving 25,665,000 shares he had paid for but never received.

Ebuh commenced an action on 10th November 2017 — just over nine years after the allotment — seeking, among other reliefs, a declaration that the bank was contractually bound to refund N436,305,000 (the value of the unallotted shares) with interest, an order setting aside a later "unsolicited" allotment of the same 25,665,000 shares made to him under a 2008 special placement, and an order setting aside an apparently unauthorised sale of his original 30,000,000 shares by the third respondent, a stockbroking firm. The Securities and Exchange Commission was joined as second respondent.

The bank denied liability and raised a preliminary objection: that the claim was statute-barred under section 7 of the Limitation Act, since it was filed more than nine years after the cause of action arose in April 2008.

Summary of Proceedings at the Investment and Securities Tribunal

The matter was heard by the Investment and Securities Tribunal, which found in Ebuh's favour and granted the reliefs he sought.

Summary of Proceedings at the Court of Appeal

The bank appealed. The Court of Appeal engaged with the merits and held that the underlying transaction was a contract under seal — reasoning that, because share certificates are issued under seal pursuant to section 146(3) of the Companies and Allied Matters Act, 1990, and because section 385 of the same Act was relevant, the twelve-year limitation period for contracts under seal applied rather than the shorter period for simple contracts. On that basis, the claim was not statute-barred. But the Court of Appeal then went a different direction entirely: it found that the Tribunal had lacked jurisdiction from the outset, due to Ebuh's failure to satisfy a condition precedent before filing. It set aside the Tribunal's judgment and struck out the claim.

Dissatisfied with the parts of that judgment which set aside the Tribunal's decision and struck out the suit, Keystone Bank cross-appealed to the Supreme Court.

The Arguments Before the Supreme Court

The cross-appellant (the bank) and the second cross-respondent (SEC) argued that Ebuh's claim was founded on a simple contract, governed by the six-year limitation period under section 8(1) of the Limitation Law — not the twelve-year period the Court of Appeal had applied. Since the claim was filed roughly nine years after the cause of action accrued, it was well outside even a generous reading of the applicable window, and should have been dismissed rather than merely struck out.

Ebuh countered that the transaction fell within the ambit of a contract under seal, or alternatively engaged statutory rights carrying the longer twelve-year limitation period — the same position the Court of Appeal had accepted below.

Resolution of the Questions for Determination

The Supreme Court, unanimously allowing the cross-appeal, held as follows:

On reading section 385 of the Companies and Allied Matters Act, the Court found its wording clear and unambiguous, and applied the settled principle that clear statutory words must be given their ordinary meaning rather than stretched beyond their actual scope. Section 385 deals specifically with the recovery of declared dividends — nothing more. The express reference to "dividends" excludes claims of a different character, including a claim for the refund of money paid toward shares that were never allotted. The Court of Appeal had erred by treating a dividends provision as though it also governed an unallotted-shares refund claim; the two are legally distinct.

On what actually makes a contract one "under seal," the Court held that such a contract must be executed, sealed, and delivered as such. Ebuh had neither pleaded nor proved any instrument meeting that description. The fact that the share certificates ultimately issued happened to bear a seal, pursuant to section 146(3) of the Companies and Allied Matters Act, doesn't retroactively convert the earlier pre-allotment application into a sealed contract. The Court of Appeal's reliance on the share certificate's seal to justify a twelve-year limitation period was a misapplication of both provisions it cited.

On the true nature of a share application, the Court explained that applying for shares is simply an offer — nothing more — and it only crystallises into a binding contract once allotment actually occurs. Since Ebuh's claim concerned shares that were never allotted to him, no contract ever came into existence over that portion of his application. What he actually had was a claim for money paid and not accounted for — a classic simple contract claim, governed by the six-year period under section 8(1) of the Limitation Law, not the twelve-year period for sealed instruments.

On the fraud argument raised late in the proceedings, the Court reaffirmed that fraud must be distinctly pleaded and strictly proved, and cannot be introduced for the first time at the appellate stage simply to escape the operation of a limitation statute. Ebuh had raised fraud in his brief of argument, but it had never been specifically pleaded or proved at trial, so it couldn't now be used to extend time.

On how a court determines whether a claim is statute-barred, the Court restated the standard approach: examine the originating process to identify when the cause of action accrued, then compare that date against when the action was actually filed. Here, there was no real dispute that the cause of action accrued on 19th April 2008 and the suit was filed on 7th November 2017 — a gap exceeding nine years, comfortably outside the applicable six-year window.

On what happens once a claim is found statute-barred, the Court was direct: the legal right to enforce it is extinguished by the passage of time. A statute-barred claim is, in the Court's words, dead and sterile — not merely delayed, but incapable of being revived through litigation. The courts will not entertain re-litigation of a claim in that condition, since doing so would waste judicial resources better spent on live disputes.

On the difference between dismissing a suit and striking it out — the point at the heart of this cross-appeal — the Court drew a sharp line. A dismissal is the final word: it closes the book on that particular dispute for good, and nobody gets to bring the same fight back to court afterward. Striking out is something much softer — the case simply comes off the court's active list for now, with the door left open for the claimant to walk back through it later if the rules allow. These aren't interchangeable outcomes dressed in different words; they carry fundamentally different legal consequences.

On which of the two orders was actually appropriate here, the Court explained the underlying logic: where a court has jurisdiction and considers a claim on its merits, and the claim fails, dismissal is the proper order. But once a court decides it never had jurisdiction in the first place, that's essentially the end of its authority to say anything else about the case — it can't then turn around and rule on the merits, since a court with no jurisdiction to hear something has no power to pronounce a verdict on it, and trying to dismiss it anyway would itself count for nothing legally.

On why the Court of Appeal's own approach was internally inconsistent, the Court identified the deeper problem: the Court of Appeal had gone ahead and resolved substantive merits questions — including the limitation issue — before concluding that the Tribunal lacked jurisdiction in the first place. Once that jurisdictional conclusion was reached, none of the earlier merits work could actually support any order at all — a court that has just told itself it has no power to hear a case can't turn around and use findings from that same case to dismiss it. Yet the claim here wasn't actually one where jurisdiction was genuinely absent in that sense — it was, properly understood, a claim that had simply expired through the operation of a limitation statute, which is itself a threshold issue going to jurisdiction. Since limitation had extinguished the claim entirely, rendering it dead rather than merely improperly brought, the correct order was dismissal, not a strike-out that would leave the door open to revival.

On disturbing concurrent findings, the Court noted the general reluctance to interfere with findings that lower courts have agreed on — but confirmed that where those findings rest on a wrong application of the law, as they did here, the Supreme Court will not hesitate to step in.

Final Verdict

The Supreme Court unanimously allowed the cross-appeal, set aside the Court of Appeal's finding that the claim was not statute-barred, and — going further than either court below — ordered that the suit, being statute-barred, stands dismissed for want of jurisdiction rather than merely struck out.

Key Takeaways

A share application is only an offer. It becomes a binding contract solely upon allotment — so a claim over shares that were never allotted is a claim for money paid, not a claim under a concluded contract.
A document being "under seal" for one purpose doesn't automatically make an earlier, separate transaction a sealed contract. The seal on a share certificate issued after allotment has no bearing on the legal character of the application that preceded it.
Dismissal and striking out are not interchangeable outcomes. Dismissal ends the matter permanently; striking out leaves the door open. Getting this distinction right materially changes what a losing party can do next.
A limitation defence is a genuine jurisdictional threshold issue. Where a claim is filed outside the statutory window, the claim is treated as extinguished — dead, not merely delayed — and the correct order is dismissal, not a strike-out that implies the claim might still be revived.
Fraud raised for the first time on appeal, without having been distinctly pleaded and proved at trial, cannot be used to defeat a limitation defence.

In Practice

This case is a useful one to have on hand whenever a client's claim involves an old, unresolved commercial grievance — the kind of dispute that's technically still "owed" but has quietly aged past the point of enforceability. Before filing, it's worth mapping the actual limitation period against the specific character of the claim (simple contract versus sealed instrument versus statutory right) rather than assuming the longer period applies by default.

On the dichotomy between a dismissal order and a striking out order, I could recollect a particular case I handled where I had filed a Notice of discontinuance and the court made a strike out order of the suit. The Notice of discontinuance was filed before the matter ever had the chance to be heard on merit. I filed the Notice of discontinuance because I discovered that the court lacked the jurisdiction to entertain the suit, even when the opposing counsel had not even spotted that loophole. I had planned to file the matter before the appropriate court. However before filing the matter again, I was worried about the actual order of court — whether it was a dismissal or a striking out order. I applied for the ruling of court and only until I confirmed it was a striking out order before I could confidently institute the action before the appropriate court. In essence, the point I am trying to make is that a dismissal order or a striking out order is a determinant of the next line of action to be taken in litigation. A striking out order correctly made is necessary not the end of a suit. Such action can be instituted afresh before the same court or elsewhere depending on the circumstance of the case. An aggrieved party may apply to relist. A dismissal order on the other hand, where correctly made is the end of the suit. You cannot institute the matter again. Where a dismissal order is wrongly made, it can only be set aside on appeal.

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