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By Correspondent in Abuja.
The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC), on Monday, challenged the jurisdiction of the Federal High Court in Abuja to entertain a suit jointly filed by Aso Savings & Loans Plc and Union Homes Savings & Loans Plc over the revocation of their operating licences.
CBN’s counsel, Onyeka Ezeah, and NDIC’s lawyer, Abubakar Shehu, raised the objection before Justice Emeka Nwite shortly after the case was called for the defendants to show cause.
Our correspondent recalls that Justice Nwite had, on Dec. 29, declined to grant an ex-parte motion filed by Aso Savings and Union Homes seeking to restrain the CBN and NDIC from taking further steps following the recent revocation of their licences.
In his ruling on the ex-parte motion moved by the plaintiffs’ counsel, Joseph Silas, the judge held that the interest of justice would be better served by placing the defendants on notice to show cause why the reliefs sought should not be granted.
Justice Nwite subsequently adjourned the matter to Jan. 5 for the defendants to show cause.
When the matter was called on Monday, Silas informed the court that the case was fixed for the defendants to show cause.
He told the court that the CBN had served the plaintiffs with an affidavit to show cause, a notice of preliminary objection, and a counter-affidavit to their originating summons.
Silas added that earlier in the day, the NDIC also served them with a counter-affidavit and a notice of preliminary objection.
However, the lawyer maintained that the hearing was scheduled for the defendants, particularly the NDIC, to show cause why the plaintiffs’ application should not be granted.
He argued that from the processes filed by the NDIC, the agency had failed to show any reasonable cause.
Silas contended that although the CBN had revoked the licences of the two institutions, the law allows them a 30-day window to appeal the decision. He said this necessitated an order restraining the NDIC from liquidating the two mortgage banks pending the hearing and determination of the substantive suit.
According to him, if the NDIC was allowed to proceed with liquidation and the court eventually found the CBN’s action unlawful, the plaintiffs would have suffered irreparable prejudice.
He therefore urged the court to order the parties to maintain the status quo pending the determination of the suit.
Ezeah, however, strongly opposed the application, arguing that the plaintiffs’ counsel was delving into substantive issues despite the pending challenge to the court’s jurisdiction.
“We have a jurisdictional issue here,” she said, describing jurisdiction as “the lifeblood of a case.”
Citing a 2022 Supreme Court decision in Waziri v. PDP, Ezeah argued that issues of jurisdiction must be resolved first before any other matter could be considered.
Shehu, who appeared for the NDIC, aligned himself with Ezeah’s submission, insisting that the corporation acted strictly within its statutory powers.
He informed the court that the NDIC had also filed a preliminary objection and that the matter was ripe for hearing.
“What should be done now is to adjourn this case to enable the plaintiffs’ counsel to respond, so that our preliminary objections can be properly heard,” he said.
In response, Silas argued that while the suit was pending, the NDIC was continuing with liquidation steps.
“All we are asking for is for parties to stay action,” he said, relying on the Savannah Bank case to support his argument.
Shehu countered that once the licence of a financial institution is revoked, the NDIC is empowered by law to take over in the interest of depositors.
Silas, however, maintained that the law grants the plaintiffs 30 days to challenge the CBN’s action and that the NDIC was merely predicating its actions on the CBN’s decision.
“They should allow the plaintiffs, because the plaintiffs will surely succeed,” he argued.
He further submitted that granting the application would be in the interest of depositors, noting that the maximum amount payable by the NDIC to a depositor is N2 million, regardless of whether a depositor had as much as N1 billion with the institutions.
Shehu responded that the NDIC’s intervention became necessary because depositors were no longer able to access their funds.
He added that if the plaintiffs eventually succeeded, the shareholders’ remedy would be to claim
Edited by Dada Ahmed.
