$9.5m FX dispute: Court discharges mareva injunction against firm

The Federal High Court in Lagos has discharged an ex-parte order and the consequent Mareva Injunction served on the Deposit Money Banks(DMB), against Kam Industries Nigeria Limited over an alleged $9.5 million trade finance dispute with Ecobank Nigeria Plc.

The court discharged the injunction on the grounds that the Central Bank of Nigeria (CBN), being a necessary party, was not joined in the suit.

Justice Daniel Osiagor held that both parties mutually acknowledged the critical role of the CBN in the transaction and that any judgment rendered without its participation would be incomplete.

The court also directed that the N1.5 billion be ring-fenced inside the bank account of Kam Industries as security pending the final determination of the substantive suit.

 “On the agreement of the parties, the ex-parte order is hereby discharged, and the assets of the company are not to be dissipated or transacted with,” Justice Osiagor ruled.

“The sum of N1,500,000,000.00 is hereby ring-fenced in the Fidelity account of the defendants as security for the case.”

The court also struck out Polaris Bank as a party to the suit and adjourned further proceedings to January 26, 2026.

The initial Mareva injunction, which was granted on October 7, 2024, in favour of Ecobank under the ex parte order, no longer exists.

The order restrained 25 licensed Nigerian banks and financial institutions from releasing or granting access to the defendants’ funds, shares, bonds, letters of credit, promissory notes, bills of lading, and other negotiable instruments, covering amounts equivalent to N3,000,681,722.97 and $6,824,638.75.

Besides Kam Industries Nigeria Limited, other defendants in the suit include its Chairman, Dr. Kamoru Yusuf, and Kamsteel Integrated Company Limited.

Ecobank instituted the suit, marked FHC/L/CS/1748/2024, via an originating summons dated September 27, 2024.

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The bank sought a declaration that it is entitled to judgment for the outstanding balance of the facility—allegedly N3 billion and $6.8 million—based on the defendants’ alleged breach of loan terms.

It prayed the court to vest all assets belonging to the second and third defendants—Dr. Yusuf and Kamsteel, as part of the debt recovery process, citing the execution of both personal and corporate guarantees in respect of the credit facility.

Ecobank asked the court to enter judgment against all three defendants for the alleged indebtedness and to vest in the bank all assets, cash, bonds, real estate, stocks, and negotiable instruments held by the defendants in any financial institution in Nigeria or abroad until full satisfaction of the debt.

The bank’s claims were backed by a 43-paragraph affidavit, 14 exhibits, and a written address.

Ecobank stated that the $9.5 million facility included a factory charge of $634,688.75 and an accrued debt of over N3 billion as of July 9, 2024.

However, the defendants contested the claims.

Justice Osiagor noted that both sides agreed on the involvement of the CBN in the foreign exchange transaction that is the crux of the dispute.

The court held that the Central Bank is a necessary party or, at a minimum, a vital witness for a comprehensive adjudication.

“The mutual recognition of the CBN’s role makes it essential for the court to understand the full scope of the bank’s involvement,” the judge stated, reiterating that any judgment without such clarity would be deficient.