Economy Dollarization: Polo Solutions, Others Ask Court to Strike Out MTN Suit

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Polo Solutions Projects Ltd, Awoyale Raphael Abayomi and Awoyale Temitayo Adekunmi all defendants in Suit No: LD/9999 GMW/2023 instituted by MTN have filed a written address in support of their preliminary objection seeking an order of the Honourable Court to strike out and/or dismiss this suit for lack of jurisdiction

According to the preliminary objection filed by their counsel, AYOOLA B. OKE ESQ., of Ayoola Babatunde Oke & Co, the grounds upon which the Preliminary Object is brought as follows:

The Claimants hold that Honourable Court lacks jurisdiction to hear this suit being a suit to enforce a criminal act specifically criminalized by the combined provisions of Sections 15 and 20(5) of the Central Bank of Nigeria Act:

Section 15 The unit of currency shall be the Naira which shall be divided into one hundred kobo while Section 20(5) also states “A person who refuses to accept the Naira as a means of payment is guilty of an offence and liable on conviction to a fine of =N=50,000.00 or 6 months imprisonment: Provided that the Bank shall have powers to prescribe the circumstances and conditions under which other currencies may be used as medium of exchange in Nigeria”

According to the counsel defendants, the document pleaded by the Claimant as MTN1 is the contract between the parties and clearly states in paragraph 6.3 that all invoices shall be denominated in Naira and it is therefore surprising that the Respondent started to demand payment in Dollars in breach of its contractual term, without first seeking and executing an amendment to the contract.

“We note that from all the documents pleaded by the Claimant particularly the Notices of Demand issued by the Claimant and replies from the Defendant that the main issue is not the payment but the question of in what currency? In fact, it is clear that the Respondent was paid in Naira but it rejected the payment and offered to return the payment made but reneged on this offer as soon as it was accepted thus holding on the funds of the Applicant while applying self-help to disconnect its and destroy its business”.

That the pleadings of the Claimant do not disclose any reasonable cause of action as nowhere in the Interconnect Agreement which is the contractual agreement between the parties is the Defendant mandated to pay the Claimant in Dollars

The issues for determination according to counsel to the defendant are as follows:

“If by the correct Interpretation of Sections 15 and 20 of the Central Bank (CBN) Act the demand (and insistence) by the Respondent for the Applicant to pay it in Dollars rejecting payments made in Naira for a transaction carried out in Nigeria and between two Nigeria companies does not amount to a criminal offence, an illegality.

“Whether the Central Bank of Nigeria has duly and lawfully exercised its powers to grant exception under the proviso to Section 20(5) by purported grant to the Respondent without any valid and binding instrument.

“If the loss suffered by the Applicant as a result refusal of the Respondent to comply with the law and if the parties are not bound by their contract subject to renegotiation”.

Reinforcing its earlier stance on the issues of law, the claimant relied on Sections 15 and 20 of the Central Bank of Nigeria Act states as follows:

“The unit of currency shall be the Naira which shall be divided into one hundred kobo.“

20 (1) The currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.

20 (5) A person who refuses to accept the Naira as a means of payment is guilty of an offence and liable on conviction to a fine of =N=50,000.00 or 6 months imprisonment:

Given that there is no ambiguity in the provisions of the Section 15 and 20 of the Central Bank of Nigeria Act and the Board of CBN has not in any way modified this provision we submit that the Applicants are entitled to the reliefs sought.

The claimants “contend that the Respondent acted in bad faith and note that it is trite law that parties are bound by their contracts.

“In this case the parties are two Nigeria Network Service providers that entered into an interconnect contract agreeing that consideration should be denominated in Naira in line with the provisions of the Nigerian Law specifically CBN Act yet one party, the Respondent decided to unilaterally refuse payment in Naira, an act prohibited by the extant law.

“We humbly pray that this honourable court grants the requested reliefs as prayed by upholding this Preliminary Objection and dismiss this suit with substantial cost”, Ayoola B. Oke Esq. implores the court.