Lagos Court Nullifies No Refund Policy Of Limited And Declares Practice Illegal

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Orders Wakanow.Com To Refund Money Paid For Flight Ticket And To Pay Damages For Negligence

No Refund Policy

The recourse to “No Refund Policy” or “No Refund of Money After Payment” provision has become a commonplace among business owners and service providers in Nigeria. Typically the so-called no refund policy appears as small print in tickets, receipts, invoices and standard contracts issued by service providers and business owners making it difficult for the customers or clients to notice such provision. For many others, little or no attention is paid to the implication of the exclusionary clause in contracts and business documents. It is when circumstances change or disputes arise between the parties requiring a demand for refund of money already paid or cancellation of booking that the business owner or service provider draws the attention of the client or customer to the existence of such clause. And yes, customers or clients may demand refund or cancellation of booking or order for several reasons even when there is no dispute. With the enactment of the Federal Competition and Consumer Protection Act, 2018 (FCCPA), the legality or otherwise of No Refund Policy is gradually becoming a subject of judicial scrutiny. The combined effect of sections 120 and 129(1)(a)(b)(iii) of the FCCPA is to outlaw the practice of no refund policy in Nigeria subject to the exception provided under the Act. The Nigerian Courts inspired by the said provisions are gradually rising to the occasion and have in recent times struck down such obnoxious practices which many business owners and service providers have used as a shield in order to escape liability for shoddy services or sometimes to arm-twist the customer or client to patronize their services.

The Magistrate Court of Lagos in Suit No. SCC/LAG/184/2022: Edem Ewa Ekeng & Anor v. Limited just last month (October 2022) nullified the non-refund policy of Limited and ordered the Company to refund the money paid by the Claimants for air tickets. The Court also awarded monetary reliefs for damages caused by the Company’s delay and failure to reschedule the flight despite payment of the sum agreed by the parties.

Back Story

The Claimants had in 2016 booked a flight to London using’s website. All payments were made directly to Thereafter the Claimants instructed the Company to open the ticket and change the destination from London to Maryland USA which the Company did. The Claimants also paid for additional tickets and then requested that the old ticket be rescheduled to a new date suggested by the Claimants together with the additional tickets to be purchased. Despite paying the sum agreed by the parties, the Company negligently failed to purchase the new tickets and did not to reschedule the flight until the price went up. Thus, the Claimants could not travel with the old ticket as a result of the negligence of the Company. Piqued by the Defendant’s negligence, the Claimants demanded refund to enable them purchase the tickets from another source. Rather than refund the entire sum paid, the Defendant only refunded the money paid for the additional tickets and refused to refund the initial sum paid, claiming that the ticket had already been issued. The Defendant premised its refusal on its non refund policy which it claimed was written on the ticket. The Claimants sued in April 2022 to recover the money paid and also claimed damages. The Defendant in its defence challenged the jurisdiction of the Court and argued that the Claimants’ case was statute barred despite a clear evidence that the cause of action arose on 21 June 2016 when the demand for the refund was made and lapsed on May 2022 (one month after the Suit was filed). Aside the jurisdictional challenge and no refund arguments, the Defendant also argued that it is an agent of a disclosed principal (the airline) and that the Claimants ought to have claimed refund from the airline. The Claimants were represented by The Law Suite Team led by Prince I. Nwafuru (the writer).


In its ruling, the Court agreed with and upheld all the submissions of The Law Suite and rejected the counter arguments of the Defendant both on the jurisdictional and the substantive issues. The Court held that the Defendant was liable having acted negligently in failing to reschedule the ticket as agreed by the parties. The Court specifically held that the purported no refund policy of the Defendant which was only communicated to the Claimants after the payment for the flight tickets is illegal, null, void and not binding on the Claimants.


In recent times, the Nigerian Courts influenced by the new regime of consumer protection under the FCCPA have come to the rescue of customers and clients who have become victims unjustifiable application of the no refund policy by business owners and service providers. The FCCPA in what may be termed an exception to the general rule however, has a proviso which seeks to balance the interest of the business owners/service providers and that of the consumer. Under section 120 of the FCCPA, whilst recognizing the right of a consumer to cancel advance booking, reservation or order, provides that such cancellation or demand for refund shall be subject to a reasonable charge or deduction to be made by the supplier or service provider. It follows that where a consumer or client asks for a refund, the business owner is entitled to charge a percentage of the sum paid to cover whatever costs already incurred provided that the charge or cancellation fee is reasonable and justifiable. The FCCPA has defined what is unreasonable charge or cancellation fee.

The decision by the Lagos State Magistrate Court is a reminder to business owners, vendors and service providers who hide under No Refund Policy to resile from their obligations to clients and customers that the day of reckoning is here. It is illegal to place a bar on the right of customers or consumers to cancel any booking or order made under the guise of No Refund of Money policy. This decision is not alone, The High Court of Enugu State sometime in April 2022 had reportedly ordered Peace Mass Transit (a transport company) to pay N500,000 damages for refusal to refund a lawyer for canceled trip. The Court in that case also held that non refund policy mostly used by service providers to prevent returning payments made to them by their clients/users is illegal as it violates section 120 of the Federal Competition and Consumer Protection Act, 2018.

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