Justice Inyang Ekwo of the Federal High Court in Abuja has directed the Central Bank of Nigeria to compensate Kasmal International Services with N579,130,698,440, along with an annual interest rate of 10% for its involvement in the collection of stamp duties. This interest will be applicable from January 1, 2015, to January 31, 2020.

Kasmal, represented by their attorney Alex Izinyon, initiated legal action against the CBN and the Attorney General of the Federation, contending that the Nigerian Postal Service had designated them to collect a N50 fee on all receipts issued by banks or financial institutions for services related to electronic transfers and teller deposits of N1,000 and above. This designation was consistent with the Stamp Duties Act and the Nigerian Financial Regulations of 2009.

The attorney further stated that the agreement between NIPOST and the plaintiff stipulated a remuneration of N7.50 from each N50 collected, which has not been fully disbursed as per the terms. The court documents indicated that the plaintiff learned through public statements made by the CBN Governor that, following an initial payment of N10.367 billion to the plaintiff, the total amount owed for all accrued deposits that should have been transferred to the NIPOST Stamp Duty Collection Account No. 3000047517 from January 1, 2015, to January 31, 2020, was not reflected. Additional remittances exceeding N370.7 billion were made from the DMBs’ NIPOST Stamp Duties Accounts to the same collection account during this period.

Currently, the Stamp Duty Collection Account holds a total of N3.8 trillion, which is available for distribution among the Federal Government, State Governments, Local Governments, the Federal Inland Revenue Service (FIRS), Coordinating Consultants, and other entities. The plaintiff's share of 15%, amounting to N579,130,698,440, is included in the N3.8 trillion in the Stamp Duty Collection Account.

The defendants have initiated actions to disburse and transfer the entire amount of N3.8 trillion from the Stamp Duty Collection Account, disregarding the outstanding payments owed to the plaintiff.

The plaintiff has requested the Court to issue an order compelling the 1st and 2nd Defendants to pay the plaintiff the sum of N579,130,698,440, or any other amount deemed appropriate by the Court, upon the submission of records related to stamp duty collections from January 1, 2015, to January 31, 2020. This amount represents 15% of all accrued deposits that were either paid into or should have been paid into the CBN NIPOST Stamp Duty Collection Account No. 3000047517 by all Deposit Money Banks.

Additionally, the plaintiff seeks an order requiring the 1st (CBN) and 2nd Defendants to pay an interest rate of 10% per annum on the sum of N579,130,698,440, or any other amount as determined by the Court, based on the same records of stamp duty collections.

The plaintiff's attorney previously requested the Court to restrain the 1st and 2nd Defendants, along with their agents, representatives, or any associated parties, from disbursing, distributing, transferring, or otherwise depleting the accrued deposits in the CBN NIPOST Stamp Duty Collection Account by all Deposit Money Banks until the case is heard and resolved.

In their preliminary objection to the case marked FHC/ABJ/CS/335/2024, the Attorney General of the Federation and the Central Bank, represented by Chief Adeniyi Akintola (SAN), argued that the agency contract the plaintiff claims to have with NIPOST is unlawful.

Akintola asserted that only the Federal, State, and Local Governments have the right to distribute the revenue from the Federation Account. He claimed that the alleged appointment of the plaintiff by NIPOST was invalid from the beginning, as stamp duty fees on bank transactions are a tax that is solely managed by the Federal Government through the Federal Inland Revenue Service. He argued that NIPOST is not the designated revenue collection agency for stamp duties and therefore lacks the authority to appoint the plaintiff as its representative for collecting on behalf of the Federal Government.

Additionally, he pointed out that NIPOST does not possess the power to designate the plaintiff as a revenue collector for stamp duties, which undermines the validity of the contract in question. He referenced an existing judgment that does not obligate the Central Bank of Nigeria to any contractual agreements between NIPOST and the plaintiff. He further requested the court to dismiss the case, criticizing the plaintiff for failing to include NIPOST as a defendant.

The lawyer emphasized that it is the duty of the Accountant General of the Federation to manage the disbursement, distribution, allocation, or transfer of all revenues accrued in the Federation Account.

He stated, “The failure to join NIPOST, which allegedly appointed the plaintiff as a collection agent, deprives the Honorable Court of the necessary jurisdiction to consider the claims as they are currently presented; the supposed agency contract between NIPOST and the plaintiff, which underpins the plaintiff’s authority, has not been submitted to the court, thus preventing the court from enforcing the agency contract merely because it was referenced in passing in paragraph 5(e) of the plaintiff’s affidavit supporting the originating summons.”

The revenue in question is attributed to the entire Federation, with its collection and remittance directed to the Federation Account. Any funds credited to this account can only be allocated among the Federal, State, and Local Government Councils within each State. Consequently, the court does not have the jurisdiction to address this case concerning the distribution of the funds in the Federation Account.

The Stamp Duties Act does not allow for the delegation of stamp duty collection to any entity other than NIPOST, as stipulated in the NIPOST Act, and thus, the stamp duties in question are exclusively related to this provision.

In delivering the judgment, Justice Ekwo stated that the arguments presented by the CBN and AGF, asserting that NIPOST lacks the legal authority to collect stamp duties and that the agency agreement with the plaintiff is invalid, are unfounded. The judge emphasized that a prior ruling favoring the plaintiff regarding stamp duties remains in effect and has not been overturned by a higher court.

Justice Ekwo further asserted that the claims made by the CBN and AGF, which suggested that the reliefs sought by the plaintiff could not be granted because all revenues, including the stamp duties at the center of this dispute, are deposited into the Federation Account and can only be distributed according to the Constitution, are incorrect.

He noted that the CBN had disbursed N10.3 billion to the plaintiff, representing 15% of the stamp duties collected by all Deposit Money Banks from January 1, 2015, to January 31, 2020, from the CBN NIPOST Stamp Duty Collection Account No. 3000047517.

Ultimately, the judge concluded that the CBN and AGF had not successfully refuted the plaintiff's case, and since the plaintiff presented a compelling argument, they should prevail on the merits of the case.

In my view, this case is based on the premise that the 1st and 2nd Defendants previously engaged in transactions with the plaintiff, having paid the plaintiff a total of N10.3 billion, which represents 15% of the remitted stamp duty, he stated.

Justice Ekwo then granted the plaintiff's requests and directed the Apex bank to disburse over N579 billion along with accrued interest within the designated timeframe.