The Respondent got a loan from the Appellant's Benin City Branch in 1979 upon a mortgage deed in which he used his property at No. 23 (now No. 63) Okumagba Avenue, Warri as collateral. In September, 1992, he liquidated the principal loan together with accrued interest. He then asked that a deed of release be prepared in order for him to have his property back unencumbered. The Appellant failed to do so but merely handed back to him his document of title. The Respondent has alleged that he could not raise another loan to develop his country home because without the deed of release, the property remains apparently encumbered.

On 16 March, 1994, the Respondent filed a writ of summons in the High Court of Delta State at Warri against the Appellant claiming damages of N5,000,000.00 and an order directing the Appellant to release his property from encumbrance. Pleadings were exchanged. Thereafter the Appellant brought an application on 4 November, 1994 to have the suit struck out for incompetence on the basis that it was brought in the State High Court which lacked the jurisdiction to entertain the same. The ground for this was stated to be that the Appellant bank was an agent of the Federal Government of Nigeria created by statute and could therefore not be sued in a State High Court. Reliance was placed on section 230(1) paragraphs (q), (r) and (s) of the 1979 Constitution as amended by the Constitution (Suspension and Modification) Decree No. 107 of 1993.

The learned trial Judge (Bazuna, J.) in a considered ruling given on 25 April, 1995, found no merit in the application and dismissed it. He based his decision on the fact that the dispute between the parties was that of a bank and its customer, and that by virtue of the proviso to section 230(1)(d) of the said Constitution, a State High Court has jurisdiction to entertain it. The Appellant took the matter to the Court of Appeal, Benin Division. On 25 April, 1997 the court upheld the decision of the trial court and in addition held that the argument of Appellant's counsel that the Appellant bank was an agency of the Federal Government was untenable. The appeal was dismissed.

Still dissatisfied the Defendant/Appellant now appealed to the Supreme Court.