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‘Hidden’ N249b: Court strikes out Fed Govt’s...

‘Hidden’ N249b: Court strikes out Fed Govt’s case against seven banks

‘Hidden’ N249b: Court strikes out Fed Govt’s case against seven banks

A Federal High Court in Lagos has struck out a suit by the Federal Government seeking to recover $793,200,000.00 (about N249,659,700,000.00) 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.

Justice Chuka Obiozor, who gave the ruling yesterday, ordered the government to pay N200,000 as costs to the commercial banks, except Skye Bank, which had no legal representation.

He barred the government from bringing the same action against the banks without the court’s permission.

The ruling followed a notice of discontinuance dated August 7 brought on Tuesday by the Attorney-General of the Federation, through Prof. 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  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.

Delivering his decision yesterday, 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 N10million or N20million as costs to the defendant not to be founded on,  with respect, 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.”


By Robert Egbe



Tags: Treasury Single Account, United Bank for Africa Plc, Diamond Bank Plc, Skye Bank Plc, First Bank Ltd, Fidelity Bank Plc, Keystone Bank Ltd and Sterling Bank Plc.
Source:The Nation Newspaper

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