How Zenith Bank's Disobedience Of Court Order On Stamp Duty Charge Almost Cost It N50m

Zenith Bank, led by Ebenezer Onyeagwu, has been fined NGN2 million for disobeying court order, following a lawsuit against the bank and the Central Bank of Nigeria (CBN) by Rupert Irikefe. Zenith Bank had flouted a court ruling against the deduction of NGN50 stamp duties charge on transaction of NGN1000.

There have been confusion on the stamp duties charge by banks, which the government introduced, requesting Deposit Money Banks (DMBs) to charge NGN50 on electronic transfers above NGN10,000. The stamp duties charge doesn't belong to the banks, as the lenders are mandated to remit it to the Federal Inland Revenue Service (FIRS).

Background To Zenith Bank's Disobedience Of Court Order

Zenith Bank had deducted NGN50 and NGN100 from Irikefe's account on different occassions between 2016 and 2018. The action of Zenith Bank prompted Irikefe to file a lawsuit demanding a refund and NGN50 million damages from Zenith Bank and CBN for their role in the deduction.

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He had visited the bank's office at Asaba and Warri on September 14, 2018, and October 11, 2018, respectively, to make findings as to why such amount was dedcuted from his account, but the bank said the law backed their action "to deduct the said amounts as stamp duties charges on teller deposits or electronic transfers from N1000 (One Thousand Naira) upward.” Irikefe said.

Zenith Bank Turned Blind Eye To Court Order

Zenith Bank had cited “Suit No. FHC/L/CS/1462/2013 between Kasmal International Service Limited v. Standard Chartered Bank Nig Ltd & 22 Ors.”, however, Zenith Bank had been in another lawsuit which had prohibited such action, but the bank still went against the court order.

There had been a case - prior to Irikefe's lawsuit - which involved Zenith Bank and CBN as defendants; suit No. CA/L/437A/2014 delivered on April 21, 2016 and suit No. FHC/L/CS/126/2016 delivered on March 13, 2017 of the of the Federal High Court.

The court had ruled that no law backed the deduction of NGN50 as stamp duties on teller deposits or electronic transfers from NGN1000 upward. Despite having knowledge of this ruling, Zenith Bank went ahead to charge its customers, leading to the lawsuit and Irikefe submitted the suit No. CA/L/437A/2014 and suit No. FHC/L/CS/126/2016 in his defense.

Zenith Bank Disobeyed The Court Order

CBN and Zenith Bank argued the case of Irikefe, with CBN stating that it has immunity from the suits liability or adverse claims or any demand from anybody for actions it did in “good faith” as stipulated in sections 52(1) and 53(1) of the CBN Act and BOFIA.

But Justice Nnamdi Dimgba dismissed CBN's objection, stating that the bank regulator “cannot be shielded on the provisions of the law it relied on.” According to The Cable, Dimgba said CBN’s claim that it has no contractual relationship between them and Irikefe “gathers no traction”.

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Zenith Bank tried to dismiss the case on technicality, stating that Irikefe “wrongly instituted the suit by way of an originating summons instead of by way of a writ of summons requiring oral evidence.” The judge, however, dismissed the objection of Zenith Bank, stating that the lender failed to provide opposing ruling against the suit No. CA/L/437A/2014 and suit No. FHC/L/CS/126/2016, which Irikefe used in his defense.

According to the Judge, Zenith Bank "willfully disobeyed the judgment of courts.”, hence, the bank is a "wrongdoer" and "should therefore suffer the consequence.” of its action. Dimgba fined Zenith Bank and CBN by ordering them to pay Irikefe NGN2 million, instead of the NGN50 million he had demanded.

Judge Furious At Zenith Bank's Disrespect Of Court Order

The judge ruled in favour Irikefe due to Zenith Bank's disobedience against court ruling and lack of "a superior court overriding the decisions in Suit Nos. CA/L/437A/2014 and FHC/L/CS/126/2016 that the Plaintiff is relying on, and which authorities empowered them to continue to make the deductions.”

Dimgba added that, “The truth is that when it comes to obedience to the law, everybody is on his own and should exercise independent judgment. It is my view that the 2nd defendant acted recklessly, and at its own peril, when it continued to deduct stamp duties charges from the plaintiff’s account, in the face of clear and binding judicial decisions arising from judicial proceedings which the 2nd defendant itself participated in."

He also stated that, “This relief is granted to set an example that it is reprehensible conduct to willfully disobey decisions of competent courts of law."