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JUST IN: Appeal court rejects bid to suspend N579bn payment to Kasmal by CBN over stamp duty collection
The Court of Appeal in Abuja has rejected an application to suspend a standing judgment that required the Central Bank of Nigeria (CBN) to pay Kasmal International Services N579,130,698,440 for its involvement in stamp duty collection.
The contested judgment, issued by the Federal High Court, also mandated the payment of 10% annual interest on the judgment amount for the period between January 1, 2015, and January 31, 2020.
The ruling, delivered on Friday, January 24, was read by Justice Okong Abang during an application for a stay of execution filed by the School of Banking Honors against Kasmal, with the CBN and the Attorney General of the Federation as involved parties.
This followed the earlier judgment of the Federal High Court, handed down on Friday, October 11, 2024, by Justice Inyang Ekwo, which ordered the CBN to pay over N579 billion, along with the specified interest, to Kasmal within the given time frame.
Justice Ekwo had ruled that the Central Bank of Nigeria (CBN) had paid Kasmal a total of N10.3 billion, representing 15% of the stamp duties remitted by all Deposit Money Banks (DMBs) between January 1, 2015, and January 31, 2020.
This payment was made from the CBN NIPOST Stamp Duty Collection Account No. 3000047517.
The judge further stated that the CBN could not retract its contractual agreements with Kasmal and the Nigerian Postal Service (NIPOST).
Kasmal’s legal counsel, Dr. Alex Izinyon SAN, argued that Kasmal had been appointed by NIPOST to oversee the collection of N50 on all receipts issued by banks or financial institutions in acknowledgment of services related to electronic transfers and teller deposits of N1,000 and above.
This was in line with the Stamp Duties Act and the Nigerian Financial Regulations 2009.
In their notice of appeal dated October 24, 2024, the CBN and Attorney General of the Federation (AGF) outlined 17 grounds for challenging Kasmal’s claims.
Chief Akintola, representing the appellants, expressed dissatisfaction with the Federal High Court’s ruling and judgment in Abuja.
He contended that Justice Ekwo had made a legal error, which warranted the Appeal Court’s intervention to overturn the decision.
The appellants further argued that the funds Kasmal International sought to recover were public funds, part of the Federation Account as outlined in Section 162 of the 1999 Constitution (as amended).
Akintola emphasized that, irrespective of any prior mismanagement, stamp duties should be deposited into the Federation Account and distributed solely among the three levels of government.
The School of Banking Honors, which contested Kasmal’s claims, requested that the Appeal Court temporarily suspend (stay) the trial court’s ruling and judgment while granting permission to appeal the decision of the lower court.
Additionally, the School of Banking Honors sought an order allowing an extension of the time frame within which the applicant can request leave from the court to appeal the Federal High Court’s ruling delivered on October 11, 2024, in this case.
“An order granting leave to the applicant to appeal on grounds of mixed law and facts as contained in the proposed notice of appeal against the substantive judgment of the trial court delivered in October 2024.
“An order granting leave to the applicant to combine the appeal against the said ruling with the appeal against the judgment of the trial court delivered on the same day in the instant suit, since an order granting leave for the appellants to rely on the records of appeal transmitted by the CBN and AGF is already before the court and has been duly entered.
“An order of stay of execution or enforcement of the judgment of the Federal High Court Abuja delivered on October 11, 2024, in the instant suit, pending the hearing and final determination of the applicant’s appeal,” the company stated.
The applicant further requested that the Appeal Court prevent the Central Bank of Nigeria (CBN) from executing any part of the trial court’s judgment while the applicant’s appeal remains pending.
In response, Alex Izinyon SAN directed the Appeal Court to his counter affidavit.
He objected to the School of Banking Honors’ request for a stay, asserting that the trial court’s ruling and judgment, issued on the same day, were consolidated.
This, he argued, made the reliefs sought by the School of Banking Honors inappropriate.
Izinyon also contended that it was improper to have both a proposed notice of appeal and an active appeal simultaneously.
“There will be too many appeals if this application is granted,” Izinyon said.
After reviewing the application on Friday, January 24, Justice Abang concurred with Izinyon, agreeing that the School of Banking Honors’ application was flawed and lacked merit.
“It is not really clear what the applicant is asking for,” he said.
The judge remarked that it appeared the applicant was treating judicial processes recklessly.
He ruled that the trial court’s decision became final as soon as it was issued, and the applicant did not need court approval to file an appeal.
While acknowledging the applicant’s right to appeal, the judge clarified that leave to appeal is only necessary when challenging a decision made by the Appeal Court.
“You have filed an appeal; why ask for leave to appeal again?” he asked.
The judge characterized the application for a stay and leave as frivolous and a misuse of the court’s processes.
“In the instant appeal, the applicant has no valid notice of appeal and failed woefully to combine and transmit the record of appeal in this matter,” the judge said.
“To be modest, this application is the worst, reckless abuse of judicial process and a complete waste of judicial time.
“It is clear that the applicant has no valid or competent appeal upon which it seeks the stay of execution of the subsisting judgment of the trial court.
“The application is hereby dismissed, and costs of N300,000 are awarded in favor of Kasmal.”
He stated that the application was filed in bad faith and was nothing more than a waste of valuable judicial time.
Stamp duty is an indirect tax levied on various financial transactions.
In 2023, former CBN Governor Godwin Emefiele disclosed that the total revenue collected as stamp duty on behalf of the Federal Government over a six-year period, from 2016 to 2022, amounted to N370.686 billion.
Kasmal sought the Federal High Court’s intervention to determine its share based on the agreed terms with the relevant agencies, particularly NIPOST.
The matter is now in the hands of the Appeal Court panel, which will issue its final ruling, especially regarding the CBN’s appeal.
