Justice Mohammed Yunusa of the Federal High Court in Lagos has ordered the Central Bank of Nigeria to use funds held by the bank for the Zamfara State government to pay off a judgment of N741.8 million against the state.
Justice Yunusa gave the order while ruling in a case brought by First Bank of Nigeria Plc. against the state. The case, filed by Olukemi Balogun on behalf of the bank, accused Zamfara State’s Ministry of Finance of failing to honor an irrevocable standing payment order (ISPO) for N308.2 million to the plaintiffs. In an affidavit in support of the application, another lawyer who represented the bank, Marcellus Onah, stated that the claim was for N586.4 million, being an outstanding debt to the First Bank.
According to the details of the case, on February 22, 2008, the Zamfara State Hospital Services management board had issued a an irrevocable standing payment order to the bank guaranteeing the monthly payment of N17 million from the state’s revenue allocations for 18 months. Based on the ISPO, the bank paid out N260 million to a Nigerian firm, Al-Excel, to finance the purchase of 4,000 CG125 motorcycles for members of the state’s Hospital Services Management Board.
First Bank argued that the board and the Zamfara state government were obligated to pay off the debt as well as interest, adding that the state had failed to do so, despite numerous requests.
The bank urged Justice Yunusa to order the state to pay N586.4 million as well as interest calculated at 18 percent per annum from April 29, 2013.
Last October, the court had ruled for the plaintiffs, ordering the state to repay N741.8 million in debt and interests. As the state failed to pay, First Bank filed an application on October 22, 2014 asking the court to attach the defendant’s accounts at various commercial banks. However, Diamond Bank became the only bank to disclose that the state had an account with the sum of N113.3 million, which was turned over to First Bank.
The bank went back to Justice Yunusa to urge him to garnish the state’s monthly statutory allocation that is held at the Central Bank of Nigeria.
Justice Yunusa ordered the parties to return to court on June 24, 2015 to determine that the CBN had complied with his judgment.