Appeal Court reverses N579bn stamp duty payment judgment in CBN’s favour

The Court of Appeal sitting in Abuja on Wednesday reversed the judgment of a Federal High Court ordering the Central Bank of Nigeria (CBN) to pay Kasmal International Services the sum of N579,130,698,440 for its involvement in stamp duty collection.

Justice Adebukola Banjoko, who delivered the majority judgment of two to one of the Appeal Court, overturned the judgment of the lower court.

Banjoko held that, Kasmal had no legal right to be engaged by the Nigerian Postal Service (NIPOST) for stamp duty collection from the outset.

The trial Court had, in a judgment, delivered on October 11, 2024, by Justice Inyang Ekwo, ordered the CBN to pay over N579 billion to Kasmal within a specified period with a 10% annual interest rate on the judgment sum from January 1, 2015, to January 31, 2020.

Justice Ekwo held that the CBN had paid Kasmal a total of N10.3 billion, representing 15% of remitted stamp duty payment by all Deposit Money Banks (DMBs) between January 1, 2015, and January 31, 2020, via the CBN NIPOST Stamp Duty Collection Account No. 3000047517 and that, the CBN could not backtrack from its contractual agreements with Kasmal and NIPOST.

Kasmal’s lawyer, Dr. Alex Izinyon (SAN), argued that his client was appointed by NIPOST to represent it in the collection of a N50 charge on all receipts issued by any bank or financial institution as acknowledgment of services rendered for electronic transfers and teller deposits of N1,000 and above, in compliance with the Stamp Duties Act and the Nigerian Financial Regulations 2009.

In the CBN and Attorney General of the Federation’s (AGF) 17 reasons listed in their notice of appeal dated October 24, 2024, Chief Niyi Akintola, SAN, who expressed dissatisfaction with the Federal High Court decision, contended that Justice Ekwo “erred in law” and urged the Appeal Court to intervene.

The appellants further argued that “the alleged funds Kasmal International seeks to recover are public monies, which are part of the Federation Account governed by the provisions of Section 162 of the 1999 Constitution (as amended).”

He maintained that, regardless of any previous mismanagement, stamp duties should be paid into the Federation Account and shared among the three tiers of government.

On his part, Alex Izinyon (SAN) opposed the appeal by the CBN, insisting on the contractual agreement his client had with NIPOST.

Delivering judgment on Wednesday, Justice Banjoko held that the first respondent (Kasmal) lacks the requisite locus standi (legal authority) to initiate the suit or claim any lawful entitlement or commission.

“The suit as constituted is fundamentally defective,” she said, adding that the appeal (by CBN and AGF) is allowed and the judgment of the lower court is set aside in its entirety.

She stressed that the Federal High Court, per Justice Ekwo, “erred in declaring Kasmal’s entitlement to the said commission when in law, there was no legal contract ab initio (from the beginning) between first respondent (Kasmal) and NIPOST.”

The Appeal Court further concluded that NIPOST had no statutory authority to manage or collect stamp duties and cannot delegate powers it does not have to the first respondent (Kasmal).

In his dissenting judgement, Justice Okong Abang of the Appeal Court said he finds it extremely difficult to agree with the majority judgement that the transaction in question is illegal.

”My conscience will not allow me if I should follow the majority,” he added, stating further that, by the ratification of the contract by the Attorney General and payment of N10.3 billion, he must “now be estopped from keeping the proceeds meant for the 1st respondent (Kasmal).

“The doctrine of unjust enrichment frowns at a party who uses the law to retain the benefit conferred by another without offering compensation,” he concluded.

He held that the appeal lacked merit and ought to be dismissed and proceeded to dismiss the appeal.

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