Revisiting the Autonomy Principle in Financial Instruments: Application in Domestic and Cross-Border Contracts

These financial instruments operate independently of the underlying transaction and banks are not concerned with any dispute that may exist between the parties under the underlying transaction. However, In recent times, Nigerian courts have started to recognise exceptions to the autonomy principle such as fraud, illegality, unconscionability, etc.

In this article, TEMPLARS Partner, Sesan Sulaiman; Managing Counsel, Orji Uka; and Associate, Precious Emeka-Egonu examine how financial instruments are treated under Nigerian law, analyse key authorities on the limited exceptions to the principle of autonomy of financial instruments, and offer practical drafting and due-diligence recommendations to balance risk with efficiency.