Supreme court to resume hearing on £2.5bn judgment awarded against Nigeria Oct 7


The supreme court will, October 7, resume hearing in a suit involving the Central Bank of Nigeria (CBN), Union Bank of Nigeria (UBN) and Petro Union Oil & Gas Company Limited over £2.556 billion debt judgment.

The case was a lower court judgment establishing that £2.556 billion was lodged in the coffers of the Central Bank of Nigeria (CBN) and Union Bank by Petro Union as far back as 1994.

Ahead of the apex court decision, there has been an uneasy calm among stakeholders in the nation’s justice and financial sectors — as many had said the case is similar to the recent $10 billion Process & Industrial Development Limited (P&ID) legal tussle.

Apart from the supreme court hearing, the Economic and Financial Crimes Commission (EFCC) had also instituted criminal charges against officials of the Petro Union at the federal high court.

According to the EFCC, the case is an attempt to defraud Nigeria and the Union Bank of Nigeria (UBN).

The Petro Union saga started in 1994 when its directors, including Prince Isaac Okpala (now dead) and his wife, issued a cheque dated December 29, 1994, for £2,556,000,000 to establish three refineries in Nigeria.

The cheque, issued in favour of their consultants, Gladstone Kukoyi and Associates, was drawn on the Barclays Bank account of Gazeaft Ltd.

The Okpalas were also directors of the UK-registered Gazeaft.

According to the court papers, Gladstone Kukoyi and Associates lodged the cheque with Union Bank. The bank then asked its London branch to confirm it, as was the formality, only to be told that Gazeaft Ltd had closed that account since 1989 — five years before the cheque was issued. Union Bank said it notified the CBN about the suspicious cheque and that the central bank did its own checks and confirmed that Gazeaft’s UK account had indeed been closed since 1989.

By 2012, the company filed a suit at the federal high court, Abuja, asking to be paid £2.556 billion by the CBN, Union Bank, the minister of finance and the attorney-general of the federation.

The company premised its arguments on an allegation that CBN received the sum of £2,159,221,318.54 while Union bank retained £396,778,681.46 as commission.

In March 2014, the court presided over by the late Justice Adamu Abdu-Kafarati ruled in favour of Petro Union and their directors against the defendants.

In his judgement, Justice Kafarati held, among others, that Union Bank was liable to Petro Union in the sum of £396,778,681.46 being the balance of Petro Union’s foreign capital, which it supposedly deposited with the Bank in 1994 and that the CBN was liable to the company for the sum of £2,159,221,318.54.

The allegation was that the balance of the sum of £2,556,000,000.00 allegedly deposited with Union Bank had been transferred to CBN. The liabilities were held by the court to be joint and several against all the four defendants – CBN, Union Bank, minister of finance and attorney-general of the federation.

An appeal was later lodged by CBN and Union Bank against the judgement at the court of appeal, Abuja division, in 2014.

However, on the 5th of June 2018, the appellate court also upheld the judgment of the lower court and dismissed Union Bank’s appeal.

The appeal lodged by the CBN against the judgment of the federal high court is yet to be determined till date while the AGF and minister of finance are yet to file an appeal against the judgment — meaning the judgment subsists against these major agencies of the federal government and therefore against Nigeria itself.

Dissatisfied with the judgment, Union Bank promptly appealed to the supreme court in June 2018.

The hearing of the appeal at the apex court was later stalled on June 27, 2021, owing to a dispute over legal representation for Petro Union.

Two lawyers, Joe Kyari Gadzama (SAN) and Onyechi Egwuonwu had on that day confronted each other over who should represent Petro Union in court.

The representatives of Petro Union had later confirmed in open court that their lead lawyer is now Gadzama and that they had asked Egwuonwu to work together with him to no avail.

Following this confirmation, the court informed Egwuonwu that he could no longer be heard in the proceedings.

This paved the way for Adegboyega Awomolo, Union’s Bank lawyer, to introduce his pending application.

Gadzama, Petro Union’s lawyer, told the court that he had filed a preliminary objection to the application on the ground that the same application for leave to appeal against the same court of appeal decision was earlier heard on the merits and dismissed by the supreme court on December 16, 2019.

In view of the contentious nature of the application, the court adjourned the hearing in the case to October 7.

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