News

Court Strikes Out $793m TSA Suit, Awards N1.2m Against FG

The Federal High Court in Lagos on Wednesday struck out the suit filed by the Federal Government against seven commercial banks, which were accused of violating government’s Treasury Single Account policy.

As Justice Chuka Obiozor struck out the suit, he awarded a cost of N200,000 each in of favour six out of the seven banks against the Federal Government.

The striking out of the suit followed an application for discontinuation filed by the Attorney General of the Federation and Minister of Justice.

Granting the AGF’s application for discontinuation of the suit, Justice Obiozor held, “I have considered the stage at which the notice of discontinuance was filed in this suit; the suit has yet to proceed to trial.

ADVERTISING
inRead invented by Teads
“I have also considered the reason given for withdrawal of the suit, which as it were, was of public interests. The proper order to make in this matter is to strike out and not to dismiss. I do not find that the justice of this case demands a dismissal.

“Nevertheless, I shall not turn a blind eye on the effect of the interim order on the defendants. In the matter of cost, the court has a discretion which must be exercised judicially and judiciously, according to the rules of reasoning and justice. Besides, compensation is the basis for awarding cost. Indeed, the defendants deserve compensation which I put at N200,000 to be paid to each of the defendants with the exception of the third defendant.

“In the final analysis, this suit is hereby struck out. The plaintiffs shall not re-list this suit without the leave of court while the interim order is discharged.”

The Federal Government had on July 20, 2017, approached the court, alleging that the seven commercial banks connived with some government agencies to illegally hide in their coffers, a total of $793,200,000, which was meant to have been transmitted to the TSA account domiciled in the Central Bank of Nigeria.

The concerned banks are United Bank for Africa; Diamond Bank Plc; Skye Bank Plc; First Bank Limited; Fidelity Bank Plc; Keystone Bank Limited; and Sterling Bank Plc.

Upon entertaining an ex parte application by counsel for the Federal Government, Prof. Yemi Akinseye-George (SAN), on July 20, Justice Obiozor had made an interim order directing the banks to immediately remit the funds to the TSA account at the CBN.

He had then adjourned till Tuesday, August 8 for the banks to appear in court to show cause why the order should not be made permanent.

But at the resumed proceedings on Tuesday, the Federal Government’s counsel, Akinseye-George, said he had been instructed by the AGF to discontinue the case in the overall interest of the public.

“It is not out of weakness that the Federal Government is withdrawing this case. The banks are corporate citizens and we are interested in the well-being of everybody,” Akinseye-George said, urging Justice Obiozor to dismiss the suit.

But the banks, which claimed that the Federation Government’s allegation against them was false and that they had already been unjustly disparaged, urged the judge not to merely strike out the suit but to dismiss it and award N20m cost against the Federal Government.

ADVERTISING
inRead invented by Teads
They noted that any case struck out could be re-filed while a case that is dismissed could no longer be re-filed.

Counsel for the banks, including Mr. Seyi Sowemimo (SAN) and Mrs. Abimbola Akeredolu (SAN), took turn to argue that the proper order that the court ought to make in the circumstances of the case was to dismiss the suit and not strike it out.

Akeredolu, who represented Sterling Bank Plc, argued, just like the rest of the counsel, that the Federal Government decided to withdraw the case having realised that it was filed in error.

“My Lord should not allow the instrumentation of the law to be used as a vehicle of mischief. And nobody is above the law, even the Federal Government of Nigeria…We are praying the court make an order for a meagre cost of N10m against the plaintiffs,” Akeredolu said.

Counsel for Keystone Bank Limited, Mr. Babatunde Ogungbamila, however, insisted on a cost of N20m against the Federal Government, saying his client had suffered a substantial damage to its reputation.

“They have destroyed the reputation of our banking industry and they did this recklessly because the fundamental economic underpinning of this country was actually targeted,” Ogungbamila said.

But Akinseye-George countered them, insisting that the case should be struck out rather than dismissed.

In his ruling on Wednesday, Justice Obiozor agreed with Akinseye-George and struck out the suit.

PUNCH.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top
%d bloggers like this: