Firm sues for N4.1b over negligence as CBN objects

Zumax Nigeria Limited, an oil services company, has sued the Central Bank of Nigeria (CBN) for N4.1 billion at the Federal High Court in Lagos.

It alleges gross negligence and complicity by CBN over a receivership.

In the case before Justice Akintoye Aluko, Zumax claimed that the CBN failed in its statutory duty to supervise banks and protect customers’ interests.

However, CBN has filed a preliminary objection challenging the court’s jurisdiction in hearing the matter.

Zumax maintained that it had paid over N547 million to FCMB, proving it was never in debt to the bank, yet it was placed in receivership, and that the the CBN failed to intervene despite being petitioned.

The company claimed it was unable to operate for two decades due to the receivership based on what it described as an entirely fabricated debt.

The plaintiff is praying for a declaration that the CBN was negligent in its duty to regulate Nigerian banks.

It is also asking for special damages amounting to $41million, including lost income and asset depreciation; general damages of N2 billion, exemplary damages of N2 billion and legal costs amounting to N100 million.

The plaintiff, a player in the oil services industry, was regularly engaged by oil majors like Shell Explorations Limited and Chevron Limited, and from which jobs it earned regular substantial incomes in dollars.

At the hearing yesterday, Wole Olanipekun (SAN) told the court that the plaintiff had an application dated February 20, 2025, asking the court to hear the application.

He told the court that the plaintiff’s motion and the defendant’s preliminary objection could be consolidated and heard together.

He stated that the priority of which application should be heard first should not arise as the plaintiff has not said CBN’s preliminary objection can’t be heard.

But CBN’s counsel Adeleke Agboola (SAN) told the court that the defendant has a preliminary objection in the suit which commenced as a rit of summons challenging the jurisdiction of the court.

He argued that CBN filed its notice of preliminary objection within time and that the plaintiff has responded to it.

Agboola said: “This preliminary objection has priority over any other applications. The plaintiff’s application is not meritorious.”

In response, Olanipekun said: “My learned friend said the application we filed is not meritorious.

“It is the court that can make any pronouncement on that.

“The court has to determine whether the objection has to be heard first or the Plaintiff’s application dated February 20, 2025, has to be heard first.

“It’s no longer the law, in fact, it has never been the law that when there is a preliminary objection the court will say let’s take it first. We urge your lordship to take our application haven’t not been contested by the defendant.”

Justice Aluko adjourned till April 22, 2025 for ruling on which application to hear first.

According to court documents, Zumax had and maintained in its name an account (with account no: 0101020000026) with the defunct IMB International Bank PLC which by/under several mergers and consolidations of banks ultimately fused into the much larger banking institution known as First City Monument Bank.

The plaintiff had obtained a facility from FCMB’s predecessor, IMB International Bank, an overdraft facility of N50 million, which was later increased to N200 million in or during the first half of 1998.

However, the bank allegedly inflated the company’s debt and, by December 6, 2002, claimed it had risen to N465.6 million, which was vehemently disputed by Zumax.

“Rather than addressing the dispute, FCMB appointed receivers to take over Zumax’s operations.

“The receivership, which lasted from December 2002 until 2022, led to severe financial losses, including the collapse of Zumax’s business and the loss of contracts without multinational oil companies such as Chevron,” the plaintiff said.

The company claimed it was unable to operate for two decades due to the receivership, which was based on what it describes as an entirely fabricated debt.

Zumax further alleged that despite repeated petitions, the CBN failed to investigate FCMB’s actions or intervene to prevent the alleged financial mismanagement.

The company maintained that a 2007 CBN report confirmed that it had paid over N547 million, to FCMB, proving it was never in debt to the bank.

“Additionally, the Court of Appeal ruled in December 2021 that the consent judgment upon which the receivership was based was fraudulent and should be set aside.”