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Friday, March 24, 2023

Court strikes out suit against seven banks

Following the application by the Federal Government (FG) to withdraw it’s case against seven banks who allegedly violated the Single Treasury Account (TSA) a Federal High Court, Lagos has struck out the suit by the FG.

Federal High Court
The Federal High Court in Lagos

The application was seeking to recover $793,200,000 (about N249,659,700,000) from seven banks which it claimed they hid for ‘unknown’ government officials.

The banks are: United Bank for Africa Plc, Diamond Bank Plc, Skye Bank Plc, First Bank Ltd, Fidelity Bank Plc, Keystone Bank Ltd and Sterling Bank Plc.

Vacation judge,  Chuka Obiozor, who gave the ruling on Wednesday, August 9, 2017, also ordered the government to pay N200,000 as costs to all of the commercial banks except Skye Bank which had no legal representation.

The ruling followed a notice of discontinuance dated August 7 brought on Tuesday by the Attorney-General of the Federation through Professor Yemi Akinseye-George (SAN).

Akinseye-George told Justice Obiozor that the government had decided to explore an “out of court settlement” with the banks in the public interest.

Last July 20, the government accused the banks of hiding $793 million in contravention of the Treasury Single Account (TSA) policy.

It sought and obtained an interim order directing the banks to remit the sum to a designated account at the Central Bank of Nigeria (CBN).

But, on Tuesday, the Federal Government applied to discontinue the suit on the instruction of the Attorney-General.

Akinseye-George, relying on Order 50 Rule 2 Subsection 1, Federal High Court Civil Procedure Rules of 2009, moved the court to strike out the suit.

The application was challenged by the six banks which urged the court to substitute the strike out order for an order of dismissal.

The lawyers, including UBA’s counsel, Dr. Ajibola Muraina, Seyi Sowemimo (SAN) for Fidelity Bank; Abimbola Akeredolu (SAN) for Sterling Bank. N. A. Oragwu (Diamond Bank); E.A. Okorie (First Bank) and Babatunde Ogungbamila (Keystone Bank) also asked for costs of between N10 million and N20 million for each bank as compensation or damages.

However, following Akinseye-George’s argument that the banks were not entitled to any cost because, among others, they did not file any affidavit to particlurise the nature of the damage they claimed to have suffered, Justice Obiozor adjourned till yesterday for ruling.

Delivering his decision, the judge found, among others, that since the suit did not proceed to trial, the justice of the case was in favour of an order to strike it out, rather than a dismissal.

He said: “I have also considered the reason given for the discontinuance – the demand, as it were, of public interest. I have also considered the fact that when a notice of discontinuance is duly and validly filed, it cannot be recalled, as the suit ceases to exist the moment it is effectively discontinued, subject to the payment of costs.

“I find that as I have not adjudicated on claims in the action before me for a pronouncement on the merits of the issues arising therefrom, the proper order to make, with respect to this matter, is one striking out this suit and not of dismissal and I so hold.

In the instant case before me, the matter is yet to proceed to trial. I do not find that the justice of this case demands that this matter should be dismissed.

Regarding the costs demanded by the banks, the judge said: “Nevertheless, I shall not turn a blind eye to the effect of the interim order on the defendants. This case cannot now go on. I find no reason not to compensate the defendants with costs at least to those of them who have appeared in this matter.”

He, however, declined to grant the amount demanded as costs, saying “I find the request for N10 million or N20 million as costs to the defendant not to be founded on, with respect to established principles.”

The judge added: “The defendants deserve compensation which I assess and put at N200,000 against the favour of and to be paid to each of the first, second, fourth, fifth sixth and seventh defendants.

“In the final analysis, the suit is hereby struck out and the plaintiff shall not re-list this suit without the prior leave of court. The interim order of this court made on the 20th of July 2017, are hereby set aside, truncated and discharged.”

By Chinyere Obia

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