Firm Seeks Court Reversal of $9.5M Injunction in FX Dispute

Kam Industries Nigeria Limited, which stands as the nation’s premier producer of metals and steel with local ownership, has petitioned the Federal High Court located in Lagos to overturn an ex parte Mareva injunction that was issued in favor of Ecobank Nigeria Plc concerning a contentious $9.5 million foreign currency deal.

On October 7, 2024, Justice Daniel Osiagor approved Ecobank’s request for a Mareva injunction, which ordered 25 authorized banks and financial entities not to allow the defendants to withdraw or obtain access to assets including funds, shares, bonds, letters of credit, promissory notes, bills of lading, and various negotiable documents valued at N3,000,681,722.97 and $6,824,638.75.

The directive was released ahead of the main case hearing identified as FHC/L/CS/1748/2024.

Along with Kam Industries Nigeria Limited, the plaintiffs have named Dr Kamoru Yusuf and Kamsteel Integrated Company as additional defendants in the lawsuit.

During the proceedings on Wednesday, Mr. Yakub Dauda, who represents the defendants, requested the judge to lift the injunction, claiming that Ecobank had omitted crucial information in their petition for the ruling.

Dauda contended that Ecobank deceived the court by not disclosing pertinent information that affected the issuance of the order.

There isn't an immediate danger of assets being dispersed, however, they brought their case before this court on September 27, 2024, received the injunction on October 7, 2024, yet did not serve us until March 18, 2025.

He added: "On March 13, 2025, Wema Bank was notified about our involvement, which let us know of this directive. There’s no evidence indicating that the court sheriff ever delivered notice to us. Therefore, we refute any claims of debt towards them."

Dauda argued that Ecobank’s counter-affidavit essentially supported the stance of the defendants.

"Their rebuttal affidavit nearly concedes the validity of our presented facts. The issuance of this Mareva injunction should never have occurred. I strongly request the court to revoke it," he stated.

Drawing upon Orders 26 Rule 10(1)-(3) and 28 Rule 1(1)-(3) from the Federal High Court (Civil Procedure) Rules 2019, Dauda argued that the court did not have proper jurisdiction when issuing the injunction. He also contended that this action infringed upon the defendants' rights to a fair trial.

He stated that a three-party FX Forward Contract was initiated in 2023 among the Central Bank of Nigeria, Ecobank, and the accused parties. According to the terms, the CBN agreed to supply U.S. dollars to Ecobank for the advantage of the defendants, which established a liability for repayment.

"Nonetheless, the CBN failed to provide the USD as promised. Consequently, Ecobank sent a demand letter on July 14, 2024, requesting reimbursement, to which we replied on July 29, 2024, refuting any responsibility," he noted.

Even so, Dauda stated, Ecobank went ahead and obtained an ex parte order on September 27, 2024 without serving the originating processes to the defendants.

He further stated that the accused entities include reputable Nigerian firms possessing identifiable assets worth more than N150.6 billion, thus alleviating concerns about potential transfer or depletion of these assets.

Dauda charged Ecobank’s legal representatives with circumventing proper procedures: "They sent intimidating letters to the 25 impacted banks and distorted the court's directive."

He mentioned that the ex parte order, meant for immediate assistance, became ineffective after being unused for more than half a year.

Dauda also mentioned that compelling the defendants to acquire funds from alternate foreign exchange sources while waiting for the CBN’s fulfillment of their obligations might lead to "round-tripping" in foreign currency terms, which constitutes a significant breach according to CBN rules.

Dauda contended that the Federal High Court does not have jurisdiction, asserting that the case should appropriately be heard by a State High Court since neither party involved is a federal agency.

In opposition to the application, Ecobank's chief legal representative, Mr Kemi Balogun (SAN), argued that the injunction was crucial to stop the defendants from transferring or hiding their assets before the court had made its judgment.

“The defendants are still indebted to the bank. This injunction is necessary,” Balogun told the court, adding, “The Federal High Court has the inherent jurisdiction to hear this matter.”

Previously, Balogun asked the court to release five banks—Union Bank Plc, Moniepoint Microfinance, TAJ Bank, CSAS Bank, and Standard Chartered Bank—from an earlier directive. These institutions had adhered to the court’s instructions by submitting the required affidavits. The court approved this petition.

Moreover, Balogun requested the court to approve a motion dated April 3, 2025, and this request was also granted.

Following the presentation of arguments from both parties, Justice Osiagor postponed the ruling until June 4, 2025.

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