Court Strikes Out FG’s Suit Against 7 Banks
Justice Chuka Obiozor of the Federal High Court Sitting in Lagos Wednesday struck out a suit filed by the federal government against seven commercial banks to seek the remittance of the sum of $793,200,000 allegedly hidden with them in contravention of the Treasury Single Account policy.
Justice Obiozor, in a ruling on a motion filed by the government seeking to discontinue the suit against the banks, held that contrary to the arguments of the affected banks that the case be dismissed, the proper order to make was to strike out the suit.
The court, however, awarded a cost of N200,000 each in favour of all the banks except Skye Bank which was not represented in court.
It will be recalled that counsel to the federal government, Prof. Yemi Akinseye-George had on Tuesday informed the court that the Attorney-General of the Federation, Abubakar Malami, asked him to withdraw the suit in the larger interest of the public and because of the economic implications.
Akinseye-George had also disclosed that the Federal Government had decided to explore an ‘out of court settlement’ with the banks.
Even though the banks did not oppose the notice of discontinuance of the suit, through their lawyers they had insisted that the Government’s allegation against them was false and had cost substantial damage to their reputation.
They urged the judge not to merely strike out the suit but to dismiss it and award cost of between N10-N20m against the Federal Government.
The defence lawyer also argued that any case struck out could be re-filed while a case dismissed could no longer be re-filed.
But in his ruling, Justice Obiazor held that dismissal of an action is one of the gravest actions a plaintiff can face and so the court must be slow to take this option and only exercise such discretion judiciously.
Having considered the reasons for the withdrawal of the suit, the court held that since the case was yet to proceed to trial, the proper order to make was to strike out the suit.
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,” the court held.
In awarding cost, Justice Obiazor held that the banks had placed no evidence before him to support the damage to their reputation as a result of the actions of the Federal Government, he therefore used his discretion to award a cost of N200,000 each.
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.
The court also vacated the interim order made on the 20th of July in favour of the Federal Government directing the banks to temporarily remit the funds to the TSA.
In a 15-paragraph affidavit filed in support of the ex parte application and deposed to by a lawyer, Vincent Adodo, the government alleged that the seven banks colluded with some Federal Government officials to hide the funds in breach of the government’s TSA policy.
Adodo averred that the funds were revenues, donations, transfers, refunds, grants, taxes, fees, dues, tariffs etc accruable to the Federal Government from different ministries, departments, parastals and agencies.
He further maintained that the banks had failed to remit the funds to the TSA domiciled in the CBN in violation of the guidelines issued by the Accountant General of the Federation which fixed September 15, 2015 as the deadline for such funds to be moved.
The lawyer claimed that, “The 1st to 7th respondents (banks), in collaboration with and/or collusion with unknown officials of the Federal Government, conspired to disobey the relevant constitutional provisions, thereby depriving the Government of the Federal Republic of Nigeria of funds belonging to it, which are needed urgently to fund pressing national projects under the 2017 budget.”
