Pastor Atoyebi v. Barclays Bank Plc: Ratio for Settlement

We think that the case of  Pastor Atoyebi v. Barclays Bank Plc is one that should prompt a serious reflection on how businesses approach dispute resolution in Nigeria. In that case, Mr. Peter Oluwafemi Atoyebi, SAN, a legal practitioner and pastor, opened a bank account through the liaison office of Barclays Bank Plc in Lagos. This was a liaison office and so, it didn't carry on banking business in Lagos, Nigeria. Thus, Pastor Atoyebi's bank account was domiciled with Barclays Bank in England. Between 2006 and 2009, Pastor Atoyebi alleged that Barclays wrongfully dishonoured several cheques despite sufficient funds being available in his account. He also alleged that certain transfer instructions were not executed as expected. He subsequently sued Barclays Bank Plc and its Nigerian liaison office before the Lagos State High Court ("Court"), seeking damages arising from the alleged wrongdoing.

Barclays Bank challenged the jurisdiction of the Court to entertain the claim against Barclays Bank, arguing, among other things, that the breaches alleged by Pastor Atoyebi occurred in England. The Court agreed with Barclays Bank and ruled that service of court processes on Barclays UK should be set aside for want of jurisdiction. Pastor Atoyebi appealed to the Court of Appeal. However, the Court of Appeal upheld the decision of the trial court. Pastor Atoyebi then appealed to the Supreme Court.

On 30 January 2026, the Supreme Court allowed Pastor Atoyebi's appeal, holding that the Court could entertain the claim against Barclays Bank in the circumstances of the case, notwithstanding the fact that, the actions complained about occurred in England. The case was therefore remitted to the High Court for continuation of proceedings, on the merit. Almost two decades after the alleged banker-customer breaches that gave rise to the dispute, the Supreme Court has only resolved a jurisdictional question, but the substantive claims still await determination.

We discuss the scope of legal principles established by the Supreme Court in that decision here. However, for our present purposes, the case of Atoyebi vs. Barclays Bank Plc, represents another reminder of the need for businesses to seriously explore professionally guided settlement, even where they have legitimate grievances and strong legal arguments.

Here are five reasons why we strongly advocate that parties to commercial disputes should explore professionally guided settlement, even where they have legitimate grievances and strong legal arguments.

1. Sophisticated parties should be particularly well placed to explore settlement.

Both parties in Atoyebi v. Barclays are sophisticated. Barclays is an international banking institution, while its counterparty is an intellectual and a respected Senior Advocate of Nigeria, with a deep understanding of the law and the implications of litigation.

A bank of Barclays' standing would ordinarily be expected to have legal and compliance considerations informing its decisions. Equally, a Senior Advocate of Nigeria understands the legal system, the demands of litigation and the uncertainties inherent in having a dispute determined by a court.

None of this points of act establishes that either party was necessarily wrong or that the dispute could easily have been settled as sophistication does not oblige a party to compromise a legitimate legal position. However, where parties have the capacity to understand the legal merits, assess the financial implications and appreciate the risks of continued proceedings, there is a strong basis for a structured, informed settlement process. Importantly, professionally guided settlement gives each party an opportunity to test its assumptions, understand the other's position and consider whether a mutually acceptable resolution is possible. Professional settlement of disputes is necessarily not an admission of weakness or liability. In our experience, it can also be a deliberate exercise of good judgment.

2. Litigation can outlive the dispute that gave rise to it.

Atoyebi v. Barclays also illustrates how parties can spend years litigating a preliminary question without the substantive dispute being determined. The Supreme Court's decision resolved an important jurisdictional question. But it did not determine whether Barclays had wrongfully dishonoured the cheques or breached its obligations to its customer. Those questions will now be determined by the Court almost two decades after the action was filed in the Court.

Herein lies one of the risks parties should confront when considering litigation as option for dispute resolution. A party may be right on the law and still have a considerable distance to travel before obtaining a final resolution of the substantive dispute. Professionally guided settlement offers an opportunity to address the underlying disagreement directly, without necessarily waiting for every procedural and substantive question to be resolved through the courts.

3. Winning a legal argument is not the same as achieving a commercial outcome.

A party may win an important legal argument and still be far from obtaining the outcome it originally sought. A favourable ruling on jurisdiction establishes that a court can entertain a claim. It does not, by itself, establish liability or entitle the claimant to damages. Further proceedings may be necessary, with their attendant costs, risks and uncertainties.

A professionally guided settlement allows parties to focus on what they actually need. In this case, payment, performance, an agreed exit, restoration of a business relationship or a final resolution of competing claims. When considering litigation, the question should therefore not be limited to whether a party can win. It should also be whether the eventual outcome justifies the time, expense and uncertainty required to obtain it.

4. Litigation costs extend beyond legal fees.

The true cost of litigation includes management time, disruption to business, the diversion of internal resources, reputational considerations and the uncertainty that persists while a dispute remains unresolved. These costs accumulate even while parties litigate preliminary questions.

A party may spend substantial resources establishing the right to pursue a claim before the court has determined whether the underlying claim succeeds. A proper settlement assessment should therefore consider the full economic cost of continuing the dispute, not merely the legal fees already incurred.

5. Settlement creates room for solutions that a court may not be able to provide.

Litigation generally asks a court to determine the parties' rights and grant remedies available under the law. However, negotiating a mutually-acceptable settlement can accommodate a broader range of outcomes. Depending on the circumstances, parties might agree to staged payments, a restructuring of obligations, the transfer of assets, a revised commercial arrangement or another form of consideration that meets their respective needs.

Key Takeaways

The point of this insight is not that every dispute must be settled. There could be other strategic considerations. Also, some disputes require judicial determination, particularly where a party needs an authoritative interpretation of the law, where urgent protective relief is necessary or where a negotiated outcome cannot adequately protect its interests. However, litigation should not be the default simply because parties disagree or because one party believes it has a strong case. In our experience, the most valuable legal advice is not always about how to win a dispute, but about how best to resolve it. If there other considerations justifying litigation, businesses must be clear and document such considerations from the outset.

Balogun Harold provides second opinions on commercial litigation matters and advises businesses and individuals on dispute resolution, including litigation, mediation, arbitration and professionally guided settlement of existing and anticipated disputes.