How Zenith Bank Allegedly Defrauded Nigerian Firm’s N23.2bn Trade Deal

Ekohotblog gathered that Owigs and Obigs Nig Ltd, an indigenous Nigerian company has dragged Zenith Bank Plc to Court of Appeal over a failed international deal worth N23.2bn.

A report on PaparazziPressNig.com said Owigs and Obigs had some time in 2014 appointed Zenith bank as the Confirming Bank in conformity with international trade protocol known as Uniform Customs and Practice, following a duly secured letter of credit based contract involving the shipment of solid mineral ores worth of USD64,107,180.04 (sixty-four million, one hundred and seven thousand, one hundred and eighty dollars, point four cents).

It was learned that Zenith Bank Plc formally accepted the appointment as required by law for the issuance of the letters of credit to be issued to her from the Issuing bank (ICBC) as required in favour of Owigs and Obigs. Newsone Nigeria understands that a documentary letter of credit is a mode of Payment between the importers/buyers and sellers/exporters bank, which serves as the Payment Guarantee from the importer’s bank to the exporter’s bank in favour of the exporter on behalf of the importer.

Confirmed letter of credit by the exporters/confirming bank to the exporter serves as the instrument/approval/authorization, required and utilized by the exporter for shipment of goods and without the said shipping instrument (confirmed letter of credit) as required, it is practically impossible under international trade protocol (UCP RULES) for the exporter to carry out the shipment.

Paparazzi Media quoted court papers at its disposal, saying that the ICBC, acting as the issuing bank for the Letter of Credit, a mandatory feature in international trade, fulfilled its own obligations by issuing the two Letters of Credit as required based on Zenith bank’s approval. The letters of credit bear confirmation Instruction s to Zenith bank, mandating Zenith bank to confirm the issued letters of credit to the exporter (Owigs and Obigs) accordingly as required.

The report added that Zenith bank as the confirming bank, received the acceptable letters of credit and endorsed them in acceptance for confirmation as its own contractual duty but for inexplicable reasons, failed to carry out the required confirmation of the LC in fulfilment of its own contractual duty, thereby kept the exporter stranded with goods already procured for a shipment worth of ten million dollars(USD10M), at the port of loading and this constituted a breach of a fundamental term of the contract, triggering off damages as consequences.

It was learned that prior to this, a profitability and risk assessment jointly carried out by parties to the contract on the Nigerian side, Owigs and Obigs and Zenith Bank, established that the profit to be accrued to the Nigerian firm was in the region of $38, 432, 470.04 {Thirty-eight million, four hundred and thirty-two dollars, four cents}. The discovery of the huge profit margin to be made by the company allegedly unsettled Zenith Bank, allegedly triggering greedy and manipulative desire to keep a chunk of the action.

Zenith Bank Greedy Manipulations

Newsone Nigeria understands that Zenith Bank and reportedly prompted a process of criminal manipulations after realizing the huge profit margin to be made by Owigs and Obigs, a situation that eventually led to the cancellation of the contract, albeit through the action of the bank.

According to Paparazzi sources, shortly after the receipt of the Letters of Credit from ICBC, Zenith Bank took undue advantage of the fact that Owigs and Obigs was exporting for the first time and might not be conversant with foreign trade documentations, requested for Owigs and Obigs and ICBC to deposit funds for the contract with the bank, a move that was completely alien to rules guiding such international trade and totally forbidden in Banking Rules. To be sure, the bank stood no risk in the transaction as it was acting as the receiving/confirming bank, for which it would have earned handsome commission.

It was learned that Zenith bank allegedly went ahead to automatically deduct claims from the account of Owigs and Obigs as charges for Letters of Credits confirmation commission/fee without confirming the letters of credit as required, a gross contravention of banking Rules, amounting to defrauding of the said customer. Followed closely by this was another disingenuous request by the bank to Owigs and Obigs for a percentage of the profit if it must confirm the Letters of Credit, which is the only instrument that will enable the company to fulfill its contractual obligations to its Chinese partners.

The online newspaper reported that Zenith bank requested for a whopping 34 per cent from a deal it had no other obligations except to act as receiving and confirming bank, from which it would earn good commission! This request, which was turned down by the company, more than any other thing, infuriated the bank and revealed the greedy nature of the Nigerian banking system where most banks have no qualms involving in backroom under the table deals. Despite the illegality of such illicit demand, the bank allegedly insisted on collecting the 34 per cent through illegal means.

A refusal by the company, Owigs and Obigs, made the bank embark on a process of manipulative delays and underhand fraudulent dealings that eventually vitiated the contract, leading to the loss of the entire profit of over $38 million dollars and payments of huge penalties and other monetary obligations to third parties. The rules guiding international trade imposes a time limit to the lifespan of Letters of Credit, this, of course, is known to Zenith Bank and its officials but in their own manipulative wisdom, the bank employed strange delay tactics to ensure that the contract lapsed since it could not get its desired 34 percent, the report added.

Quoting the court papers in the possession of BlackBox Nigeria, Paparazzi reported that Zenith Bank went ahead to pay from a dedicated account of Owigs and Obigs, without the knowledge and authority of the company, the stated penalty for default in confirming the Letters of Credit.

The Judicial Conspiracy

Apparently displeased with the development, Owigs and Obigs approached the High Court of the Federal Capital Territory for adjudication and to ask for damages for the huge losses it suffered, but the hope of the company for speedy and judicious adjudication, however, vanished into the thin air due to an alleged conspiracy between Justice Angela Otaluka, who sat on the case in the Lugbe area of the FCT.

In order to bury justice, based on the Certified True Copy of the Appellants Brief Of Argument available to Paparazzi, and to achieve miscarriage of justice, the presiding judge desecrated the Universal Governing Rules of Trade Customs And Practice (UCP) by allegedly altering them in favour of Zenith bank plc in legal sharp practice, allegedly to save the neck of Zenith bank to the detriment of Federal Government and jeopardized the collective interest of Nigeria and its people.

Ekohotblog learned that Justice Otaluka relied on the apparently forged UCP Rules to occasion a miscarriage of justice and in the process defamed a global body when she swapped the breach by Zenith bank. This is legal malpractice moreso when the global body defamed was not a party to the contract between Zenith bank and Owigs and Obigs.

According to Paparazzi, the said global body has warned that it will drag the FCT High Court to the International Court for alleged defamation in a fraudulent judgment which was published in an international magazine and has caused her the loss of contract worth of USD1.5 billion in Eastern Europe.

It was learned that the group also threatened to sue the Federal Government for fraud, Forgeries, Criminal Misrepresentation of international Trade Protocol and criminal altering of the Universal Governing Rules of International transactions for which Nigeria is a signatory to, occasion miscarriage of justice in a fraudulent judgment to defraud a global body which has damaged its global reputation, causing her to suffer losses amounting to billions of dollars as consequences.

The brief of appellants argument filed by Owigs and Obigs after Justice Otaluka dismissed its suit against Zenith Bank, shows that the appellant clearly stated that the presiding judge, Justice Otaluka re-wrote an international contract for the parties by substituting a non-party with a party, removed the liabilities of the legitimate party to a non-party contrary to procedure and protocol upheld by a treaty which Nigeria is a signatory.

Furthermore, Owigs and Obigs claimed that Justice Otaluka, held that Eglone Group Asia PTE Ltd, an international broker, which was not part of the sellers’ company or the buyers’ company, as the defaulting entity in the refusal of Zenith Bank to confirm the Letters of Credit and breach of contract without any evidence to that effect before the court.

Displeased with the development, Obigs and Owigs took the matter to the Appeal Court. The trial judge jettisoned laid down procedure regulating international contract financed by Letters of Credit in violation of the precedents created by this Honourable Court of Appeal and the Supreme Court of Nigeria in similar situations, thereby bringing the Nigerian Judiciary into international mockery, subjecting the nation to threatened international sanctions for breach of protocol of international treaty and causing the appellant loss of revenue in penalty and loss of ascertained profitability in millions of dollars; thereby occasioning a miscarriage of justice Obigs and Owigs claimed in its notice of appeal.

In its notice of appeal, Owigs and Obigs said in the notice of appeal filed by its counsel, Idris Abdulatif from the law firm of K.T. Turaki and Co, that despite the refusal or inability of Zenith Bank to produce any documentary evidence to back its claims, Justice Otaluka went ahead to give it justice, absolving Zenith Bank from any blame. This, the judge did despite an admission by the bank in its final address that it was indeed the receiving and confirming bank for the ill-fated contract.

The company also contended that despite several demands for the production of different crucial documentary shreds of evidence in the custody of Zenith Bank, in the course of the trial, the bank refused to produce same and the judge, without reprimand and without taking judicial notice of the blatant refusal, gave the bank a favourable judgement.

Furthermore, Owigs and Obigs stated that the action of both Zenith Bank and Justice Otaluka had made the international community to write letters of condemnation to Nigeria’s apex bank, Central Bank of Nigeria and the Chief Justice of Nigeria, thereby causing embarrassment for the country’s judiciary.

Meanwhile, Paparazzi reports that court papers show that Justice Otaluka also curiously upheld the deduction of over $4,486.04 the bank removed from the company’s account without the knowledge and authorization of the company to pay for a penalty the bank should have ordinarily paid from its pocket.

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