Naira Redesign and Swap: Supreme Court Lacks Original Jurisdiction

–Sylvester Udemezue

Issues relating to whether or not a court of law has jurisdiction are fundamental, and lack of jurisdiction is fatal. See OTUKPO v JOHN (2000) 8 NWLR (669) 507; BRONIK MOTORS v. WEMA BANK (1983)6 S.C. 158. In the Supreme Court case of MADUKOLU v NKEMDILIM (1962) 1 ALL NLR 589, the Supreme Court provided the following guide for determining whether a court has jurisdiction. Hon Justice Vahe Bairamian (FJ) while delivering the lead judgement in that, case stated as follows: “Put briefly, a court is competent when: (1) the court is properly constituted as regards numbers and qualifications of the members of the Bench, and no member is disqualified for one reason or another; and (2) the subject matter of the case is within its jurisdiction, and there is no feature in the case which prevents the court from exercising its jurisdiction: and (3) the case comes before the court initiated by due process of law, and upon fulfilment of any condition precedent to the exercise of jurisdiction. Any defect in competence is fatal, for the proceedings are a nullity, however well conducted and decided: the defect is extrinsic to the adjudication”.  

Background 

Now, in October 2022, the Central Bank of Nigeria rolled out the Naira Redesign and Daily Cash Withdrawal Limit policies, announcing 31 January, 2023 as the deadline for use of old Naira Notes (N1,000, N500, and N200 notes) in Nigeria. The deadline was however, later extended to 10 February, 2023. Meanwhile, Kaduna, Zamfara, and Kogi States filed a case at the Supreme Court of Nigeria, against the Attorney-General of the Federation, challenging the polices and asking the Supreme Court to restrain the Federal Government from enforcing the 10 February, 2023 deadline on Naira swap. The Supreme Court has granted an ex parte order, directing that the new Naira notes and the old ones should continue to coexist until 15 February, 2023 when the Motion on Notice in the case would be heard. 

Does the Supreme Court Have Jurisdiction in the Matter?

My worry is, does the Supreme Court of Nigeria have jurisdiction in this matter? I respectfully answer the question in the negative, with due respect, for the following reasons:

The Naira Redesign and Daily Cash Withdrawal Limit policies, are policies of the Central Bank of Nigeria. Only the Federal High Court has jurisdiction in disputes arising from or related to Central Bank policies, and anything having to do with the Naira as the Legal Tender in Nigeria.  Section 251(1)(d) Constitution of the Federal Republic of Nigeria, 1999 provides: “Notwithstanding anything to the contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters — connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, Legal Tender , bills of exchange, letters of credit, promissory notes and other fiscal measures…”. Thus, it is submitted that the proper court to have filed the case is the Federal High Court, and not the Supreme Court. Besides, it is submitted that, the proper party  to sue is the CBN.

Section 232 (1)(a) of the Constitution, 1999,  provides that “The Supreme Court shall, to the exclusion of any other Court, have original jurisdiction in any dispute between the Federation and a State or between States if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends”. In line with this section, there must be a live dispute between the Federation and a State, or between two States,  before the original jurisdiction of the Supreme Court can be activated. It’s submitted that in the present scenario, there is no dispute between the Federation and any of Kaduna/Zamfara/Kogi States over the Naira Redesign and Daily Cash Withdrawal Limit policies. These policies are policies of the Central Bank; the Supreme Court in its original jurisdiction, has no business with the case. And, if any State in Nigeria has any problems with the deadline fixed by the CBN, the State is free to drag the CBN before the Federal High Court. After all, the CBN is not immune from Civil actions; Section 1(2) of the CBN Act provides that the CBN may sue or be sued. In my opinion, one major problem is that it appears some people are used to confusing the term Federation with Federal Government or the Office of the President. In AG Kano v AG Federation (2007) 3 SC (PT 1) the Supreme Court explained that “The word “Federation” in Section 232 of the 1999 Constitution bears the same meaning as “Federal Republic of Nigeria” or “Federation of Nigeria”. The Plaintiffs’ claim did not accuse the Federation of Nigeria or the Federal Republic of Nigeria of taking any action against the Hisbah Law of Kano State or the operation of the Hisbah Corps in Kano State; or of arresting and detaining commanders of the Hisbah Corps in Kano State. There was no dispute between Kano State in its status as a component unit of the Federation and the unit of the Federation itself” – per Mohammed JSC at 38.

With due respect to the AG’s of Kaduna State, et al, the Attorney-General of the Federation is the proper Defendant or Plaintiff only in suits against or by the Federation; a quarrel over the action of the CBN in respect of the Legal Tender does not qualify as or translate to a dispute between a State and the Federation as provided for in Section 232(1) of the Constitution, to justify the filing of the case at the Supreme Court. In the same A.G. Kano State v A.G. Federation (Supra), the Attorney-General of Kano State had dragged the AG of the Federation to the Supreme Court over an action taken by the Inspector-General of Police, and Mahmud Mohammed, JSC (as he then was) held, while dealing with the … provisions of Section 232(1) in the lead judgement that: “Any complaints against the Government of the Federation or any person who exercises power or authority on its behalf like the Inspector-General of Police as asserted by the learned senior for the Plaintiff in his address before this Court, are completely outside the jurisdiction of this Court”. Continuing, the Apex Court said: “The statement of claim disclosed a dispute between the Government of Kano State and its Agencies, and the Government of the Federation through the Inspector-General of Police and Minister of Information, exercising their power or authority on behalf of the Government of the Federation. The venue for settlement of such disputes (i.e. against Inspector-General of Police and Minister of Information), was in the various courts of first instance whose jurisdictions were clearly outlined in the same 1999 Constitution – and not the Supreme Court” –  per Mohammed, JSC at Page 38.

Another question is whether the ex parte order made by the Supreme Court of Nigeria is binding on the Central Bank of Nigeria or on any of the Commercial Banks in Nigeria, in view of the fact that neither the Central Bank nor the Commercial Banks are a party to the case at the Supreme Court?

It is a settled principle of law, that an order of court binds only parties to the case before the court. It’s a principle of joinder of parties. Thus, if a person is not joined, that person is deemed to not be a party to the case, and is therefore, not bound by any order made in the case or the outcome of the case. See Babatola v Aladejana (2001) 6 SC 124. Section 1(3) or the Central Bank Act 2007 provides that the Central Bank of Nigeria “is an independent body in the discharge of its functions”.  Further, Section  17 of the CBN Act provides that “The Bank shall have the sole right of issuing currency notes and coins throughout Nigeria and neither the Federal Government nor any State Government, Local Government other person or authority shall issue currency notes, bank notes or coins or any documents or token payable to bearer on demand being document or token which are likely to pass as legal tender”. Section 19(1) (b) provides that “The currency notes and coins issued by the Bank shall be of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board”.  Section  20(1) of the CBN Act provides that “The currency notes issued by the Bank shall be the legal tender in Nigeria at their face value for the payment of any amount”. Section 20(3) of the CBN Act provides that “….the bank shall have power, if so directed by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coins with respect to which a notice has been given under this subsection shall, on the expiration of the notice, cease to be the legal tender, but subject to section 22 of this Act, shall be redeemed by the Bank upon demand”. From the above it appears that the CBN has the responsibility and power to issue a legal tender for Nigeria and to redesign any denomination of the legal Tender. Also, fixing of deadline for cessation of validity of the old Naira notes are issues falling within the sole powers of the CBN under the President’s directive, pursuant to Sections 19(1)(b) and 20(3) of the CBN Act. 

Accordingly, one is surprised that anyone who has a complaint or grievance in respect of either the redesign of the legal tender by the CBN, could commence such a case at the Supreme Court. Section 251(1)(d) of the Constitution doesn’t mince words that every dispute arising from or related to the Legal Tender, including Naira redesign and phasing out, must be commenced at the Federal High Court.  Besides, the CBN is a necessary party to such a suit. Further, the declaration of the Supreme Court in AG Kano v AG Federation (Supra) leaves no one in doubt: the Hon. AGF has no business whatsoever with the suit. And to this end, two major suggestions are made:

While the CBN is a necessary party to the suit, actions cannot be commenced or maintained against the CBN at the Supreme Court of Nigeria in its original jurisdiction. Perhaps, this is why the Plaintiffs carefully avoided joining the CBN, an essential party to the suit. But, then, in leaving the CBN out, the Plaintiffs still fell into a grave error of dragging to the Supreme Court, a suit legally suitable