In the case of Mr. Moses G. Jwan v. Ecobank Nigeria Plc & UBA Plc [2021] 10 NWLR (Pt. 1785) 449, Jwan was a customer of Ecobank. He used the Automated Teller Machine (ATM) card issued to him by Ecobank on the ATM belonging to UBA where he tried to withdraw the sum of N10,000. His case was that he slotted his card into the ATM and requested for cash but none was dispensed. He was however debited.

Every ATM card user in Nigeria is familiar with this development. It’s a usual occurrence. Normally, when it happens, banks have dispense error forms with which you can lodge your complains and it will be dealt with in a couple of days. In some cases, the customer will receive a reversal automatically even without lodging a formal complain.

Apparently, Jwan wasn’t so lucky. He didn’t get a reversal. He lodged complains at his bank, Ecobank, and at UBA. But both banks seemed to claim that Jwan was bluffing as their records showed that the ATM paid him.

Aggrieved, Jwan sued both banks at the High Court claiming that they were negligent. He relied on the doctrine of res ipsa loquitur. By this he claimed that he could not explain why he was debited but was not paid. He relied on his account statement showing the transaction. He therefore urged the Court to infer from the circumstances that the banks must have been negligent.

The banks denied liability. They relied on the bank statement showing the debit and also on a faded piece of paper (which was claimed to be a journal record of the transaction). The trial Court relied on both documents to hold that the transaction was successful and that Jwan failed to prove his case.

Jwan’s appeal to the Court of Appeal

Jwan appealed to the Court of Appeal. The appeal was decided on 23 March 2020. The Court knocked the trial Judge for relying on the faded piece of paper (Exhibit 19). It held that the faded document has some scribbling that cannot be read. Thus, no probative (or meaningful) value can be attached to it. The Court held it to be a worthless piece of paper and consequently expunged it from the record of the Court.

We are now left with the statement of account. The Court of Appeal held that the statement of account proved that indeed there was a debit as claimed by Jwan. The Court was of the position that Jwan has successfully raised an inference of negligence on the part of the banks when he alleged that he was not paid by the ATM, the amount debited on his account. The Court aptly explained the legal status of ATM cards and the obligation of banks. Aliyu, JCA stated:

The ATM card issued by a bank being akin to a cheque, which must be honoured on request once there is enough funds in the customer’s account, and failure to do that will mean the banker is in breach of the duty of care owed to its customer. No doubt it is one of banking innovations to use an ATM card by a customer to request for and withdraw cash from his bank account, and indeed a specialized banking service offered by the Respondents. [Ecobank and UBA] Therefore, the issuance of the ATM cards by the banks to its customers carry with it the duty to ensure that both the cards and the ATMs work as they are meant to and where there is failure of these services to a customer, the banks are duty bound to explain what happened. This is quite common since the ATMs and their operations are under the control and management at the banks.

The Court of Appeal was of the view that the banks in this case failed to supply useful explanations regarding Jwan’s claims. The Court held that merely supplying documents to show Jwan was debited doesn’t answer the question of non-payment by the ATM, especially when the banks’ witness admitted that ATM dispense failure or error is a usual occurrence. According to Aliyu, JCA:

What was required to discharge the presumption of negligence against the 1st Respondent (Ecobank) or its officers is an explanation of how that could have happened without its negligence or failure of duty of care owed to the Appellant. This is especially so because its witness DW1 admitted that there are situations where the ATMs debit a customer’s account without paying him the cash requested, which was what the Appellant complained of. Indeed, the evidence of the 1st Respondent only supported and strengthened the case of the Appellant of negligence against it. The effect of this is that the 1st Respondent did not rebut the presumption of negligence against it in this case.

The implication

The natural implication of the above case is that banks are called upon to wake up in the management of ATM transactions. A thorough investigation of ATM dispense issues will often reveal what truly transpired on the machines. This is the reason banks are ordinarily able to resolve dispense error claims. Undoubtedly, ATMs are powered by technology. The IT departments saddled with ATM operations in banks will normally take necessary steps internally to get to the root of the problems.

The instant case appears to represent one of those cases where the banks perhaps failed to do thorough internal investigations. Otherwise, the banks would have furnished the Court with detailed explanations with possible evidence such as CCTV footage. For instance, Ecobank’s witness was a customer service manager! It was not clear whether the witness was a qualified IT personnel who can articulate the technical aspects of the ATM technology and help the bank to disprove negligence. 

No automation of liability

Nonetheless, the Court of Appeal is not saying that once there is ATM dispense failure, the banks become automatically liable. No. The automation of the ATM does not mean automation of liability on the part of the banks. This is the reason Aliyu, JCA clearly held that where there is a failure, the banks should explain what happened.

Lastly, it must be mentioned that if you’re looking to pounce on the banks whenever a particular ATM fails to pay you, even without debiting you, you need to think again. Likening an ATM card to a cheque as done by Aliyu, JCA doesn’t totally mean all the rights attached to cheques also attach to ATM cards. While a cheque is a negotiable instrument, ATM card is not, precisely. ATM service is a technology-driven service that makes various kinds of banking transactions possible using the ATM card. Thus, while Mr. A can issue a cheque to Mr. B stipulating certain amount to be paid to Mr. B upon presentation, Mr. X cannot issue an ATM card to Mr. Y as a means of payment. The analogy by Aliyu, JCA was for mere illustration which is applicable only to the extent that as long as you have funds in your account, you should ordinarily be able to access it using your ATM card.

And yes, cases are to be applied with caution, with due regards to the facts. Generally, there are lots of dimensions to ATM cases. Jwan’s case touched on the tort of negligence. We are yet to explore what contract law has to say.


PS: You see those tiny write-ups contained in the ATM card application form you signed, they are not their for jokes.

Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has advised a number of both established and startup tech companies. He tweets @siazubuike.

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