Kam Industries Asks Court to Vacate $9.5m Mareva Injunction Over FX Deal Dispute

Wale Igbintade 

Kam Industries Nigeria Limited, the country’s largest indigenous metal and steel production company, has urged the Federal High Court in Lagos to vacate an ex parte Mareva injunction granted against it in connection with an alleged $9.5 million credit transaction with Ecobank Plc.

Justice Daniel Osiagor had on October 7, 2024, granted Ecobank’s application for a Mareva injunction restraining 25 licensed banks and financial institutions in Nigeria from releasing or giving the defendants access to funds, shares, bonds, letters of credit, promissory notes, bills of lading, and other negotiable instruments up to the sum of N3,000,681,722.97 and $6,824,638.75. 

The order was made pending the hearing of the main suit, marked FHC/L/CS/1748/2024.

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

At the proceedings, counsel to the defendants, Mr. Yakub Dauda, urged the court to vacate the injunction on grounds that Ecobank failed to disclose material facts that influenced the court’s earlier decision.

Relying on Orders 26 Rule 10(1)-(3) and 28 Rule 1(1)-(3) of the Federal High Court (Civil Procedure) Rules 2019, Dauda argued that the court’s proceedings of October 7, 2024, were conducted without jurisdiction and infringed on the defendants’ right to fair hearing.

He explained that in 2023, the Central Bank of Nigeria (CBN), Ecobank, and the defendants entered into a tripartite FX Forward Contract.

 Under the contract, the CBN was to supply USD to Ecobank for the benefit of the defendants, thereby creating a repayment obligation to the bank.

However, according to Dauda, the CBN has yet to fulfill its part of the deal by supplying the USD. 

Despite this, Ecobank issued a demand letter to the defendants on July 14, 2024, seeking repayment. The defendants denied liability in a reply dated July 29, 2024.

Dauda noted that Ecobank did not respond to the reply but proceeded to obtain the ex parte injunction on September 27, 2024—without serving the originating processes on the defendants.

He further argued that the defendants are Nigerian entities with verifiable assets worth N150.6 billion within Nigeria, eliminating any fear of asset dissipation.

He argued that Ecobank’s solicitor failed to disclose critical facts and bypassed due procedure by issuing threats and interpreting the court order unilaterally in letters sent to all 25 banks involved.

He submitted that the ex parte order, meant for urgent matters, was not served until March 18, 2025—over six months later—undermining the urgency and validity of the injunction.

If the defendants were to settle Ecobank’s claim through other FX sources while CBN eventually delivers the contracted USD, it would amount to FX “round tripping,” a serious violation of CBN regulations.

Dauda concluded that the matter falls outside the jurisdiction of the Federal High Court since none of the parties is a federal agency, suggesting the proper venue is the State High Court.

Opposing the application, Ecobank’s counsel, Mr. Kemi Balogun (SAN), insisted that the defendants are still indebted to the bank and that the injunction is necessary to prevent them from dissipating their assets before the court can decide the case.

He maintained that the court has inherent jurisdiction to entertain the suit.

Earlier, Balogun prayed the court to discharge five banks—Union Bank Plc, Moniepoint Microfinance, TAJ Bank, CSAS Bank, and Standard Chartered Bank—that had complied with the court order and filed affidavits to that effect.

Justice Osiagor has scheduled judgment for June 4, 2025.