A court document seen has revealed the Central Bank of Nigeria’s (CBN) counter affidavit position on the MTN’s $8.1 billion repatriation saga and its plans to credit the telecom giant in local currency upon its payment in foreign currency.
Counter affidavit is an affidavit responding to and contradicting the affidavit produced by an adversary. It is an affidavit made in opposition to one already made. Such affidavits are allowed in the preliminary examination of some cases.
“A refund of the foreign currencies purchased by the telecom company will result in MTN being credited with the Naira equivalent of the foreign currency,” the CBN said through its lawyer.
According to the court document the CBN said it acted in good faith for the benefit of Nigeria and exercised its statutory functions over the foreign exchange market in the $8.1 billion MTN refund saga.
CBN further affirmed that it shall before or at the trial, raise an objection to the propriety of the present suit against it in view of the foregoing fact and prayed the court declared that this suit was brought in bad faith, without reasonable cause and ought to be dismissed with substantial costs in favor of the apex bank.
“MTN has not disclosed any reasonable cause of action against it or any legal right to be protected in this application,” the apex bank cited.
“At all material times the Plaintiff had sufficient notice of the investigation on the banks and that it were given sufficient opportunity to make representations and substantiates.”
The lawyer responding to MTN’s suit disclosed that an article assessed on CBN website revealed that its total external reserves stood at $45 billion only and verily believed that the amount improperly purchased by MTN forms a large fraction of the external reserves of the CBN and indirectly the federal Republic of Nigeria.
The lawyer for CBN noted that MTN must show that there is a serious question to be tried which implies that the applicant has a real possibility and not a probability of success at the trial.
CBN’s lawyer admitted that MTN has not shown any serious question to be tried before the court or that it has a real possibility of success at the trial.
“ First, there is no civil right, which is actionable in the case formulated by the Plaintiff as contended in the argument in support of the 1st defendant’s preliminary objection to this suit which we urge this honourable court to first determine before considering MTN’s right to an injunction,” CBNs lawyer said.
The lawyer for CBN noted that the regulatory decision directing MTN to refund the foreign exchange irregularly remitted out of Nigeria is not a determination of MTN’s civil right and obligation which can form the basis of any action or an allegation of a denial of fair hearing citing a 2013 case between Aboseldehyde laboratories Plc vs Union merchant Bank Limited and Anor 13 NWLR (pt 1370) at 131, Ariwoola, (J.S.C).
CBN said the totality of MTN’s case in the suit was to protect its pecuniary interest in the sum of $8.1 billion which the Federal government has ordered them to refund.
“Accordingly, there is no basis for an injunction where damages are an adequate remedy. We therefore submit that this is another reason why this application should be refused,” CBN said.
The CBN lawyer said MTN must show that its conduct is not “reprehensible” hence the conduct of the Plaintiff was premeditated and contrived to maximize profits for themselves in an irregular manner at the expense of the Federal Government.
“In simple terms, the plaintiff was implicated in the contravention of foreign exchange regulations. We submit that this is a case where discretion ought not to be exercised in favour of MTN,” CBN said to the Federal High Court.
“In conclusion we submit that having regard to the failure of Plaintiff to satisfy any of the conditions required for this application we urge this Honourable court to dismiss this application and refuse all the prayers sought therein,” the CBN lawyer said.
Isaac Okorafor, a spokesman for the Abuja-based regulator said although there’s a case in court, the Central Bank of Nigeria is aggressively engaging MTN and the banks. “I’m hopeful that an amicable resolution will soon be achieved.”
Meanwhile, analysts have expressed mixed opinions concerning the CBN counter affidavit response to MTN at the Federal High Court in Lagos.
A Lagos-based economist who pleaded anonymity said the government should concentrate more on trying to attract more foreign investors into the country than scaring away the few ones that are already in the country by giving them all this kind of arbitral fees and fines. “I think this MTN issue should be resolved out of court.”
“If they are going to fine MTN at all, the fine should be drastically reduced and going forward the apex bank should get its acts together,” the economist who asked not to be quoted said.
Rafiq Raji, chief economist at Macroafricaintel Investment said it is a good thing that CBN is taking the court process seriously, haven given a comprehensive response and since they are in court, the best thing is for the court to resolve the matter.
“The system allows for cases like this to be settled in court, the CBN is abiding by that process and as far as doing business is concerned that is what matters,” Raji explained.
The chief economist at Macroafricaintel Investment said it will be even more positive if at the end the court gives it ruling the CBN abides by the court decision despite the outcome. “It will actually be positive for the economy and the strength of the institutions.”
Responding to the best way to handle the issue, another industry expert who has been following up with the issue said most “firms are advised not to take regulators to court because the court is most likely to favor the regulator on the merit of the case.”
Bismarck Rewane, MD of Financial Derivatives Company said CBN’s response is a statement of defence to the federal government position. “They are legal arguments which will be argued on trial if it ever gets to that point.”
“The fact that you are in court does not mean you cannot settle out of court and I think it is not a bad development,” Rewane concluded.
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