ZENITH BANK IN 23.3 BIL CONTRACT FRAUD, HOW ABUJA JUDGE WAS COMPROMISED

  • As Abuja Judge forges International Treaty to Give Zenith Judgement
  • The outcry that greeted the award of $9.6 billion to Process and Industrial Projects Limited {P&ID} against Nigeria may not be the last, as a Nigerian bank, Zenith and a Judge of Federal Capital Territory, Justice Angela .O. Otaluka, sitting in Lugbe, a satellite town of Abuja, have incurred the wrath of an international trade agency through alleged willful, fraudulent and criminal flouting of the treaty on the part of Zenith Bank Plc.
    If the threat of legal action against the Nigerian Government for forgery on the one hand and the FCT judiciary for defamation on the other, are carried out by the international body, then the infamy and possible blacklisting that may result therefrom will most definitely overshadow the monetary award given the P&ID.
    This is because international trade or transactions are governed by the Uniform Customs and Practices, a treaty that Nigeria is signatory. These same ground norms were allegedly brazenly flouted by Zenith Bank and allegedly forged by Justice Otaluka to give legal backing to the banks misconduct.
  • HOW IT ALL STARTED
  • Owigs and Obigs Nig Ltd, an indigenous Nigerian company and a customer of Zenith Bank Plc had sometime in 2014 appointed the 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 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).
    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.
    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 importers bank to the exporters bank in favour of the exporter on behalf of the importer.

Meaning that letters of credit is between the importers and exporters bank on behalf of their customers and as a matter of principle, letters of credit are not issued to the banks customer (exporter) but issued directly to the exporters /confirming bank with a requirement and a mandate to confirm the issued letter of credit to the exporter by the exporters/confirming bank.
Now, the 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.
According to court papers sighted by Paparazzi, 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 banks 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.
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 fulfillment of its own contractual duty, thereby kept the exporter stranded with goods already procured for shipment worth of ten million dollars(USD10M), at the port of loading and this constituted a breach of fundamental term of the contract ,triggering off damages as consequences.
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 BANKS GREEDY MANIPULATIONS AND CRIMINAL NEGLIGENCE

The realization of the huge profit margin to be made by Owigs and Obigs allegedly unsettled Zenith Bank and reportedly prompted a process of criminal manipulations that eventually led to the cancellation of the contract, albeit through the action of the bank.
Shortly after the receipt of the Letters of Credit from ICBC, Zenith Bank, sources say 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, Zenith Bank 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.
The 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.
This request by the bank was not only rebuffed but seen as an unprofessional move by Zenith Bank against internationally laid down procedures and practices. That alone, cast the Nigerian banking industry in bad light as a bunch of amateurs who are not properly versed in the handling of international trade.
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 fulfill its contractual obligations to its Chinese partners.
Curiously, Zenith asked for a whopping 34 percent 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 percent 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.
Curiously also and in a fraudulent move, the bank, according to court papers in the possession of Paparazzi, 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 action of the bank has the following implications according to court papers.
Firstly, the bank behaved fraudulently by passing its liability to the company for defaulting in acting on its assigned role in the transaction. The payment of the penalty for non-confirmation of the Letters of Credit, was a liability solely to be borne by Zenith bank, but it went ahead to fraudulently pay the penalty from the account of the company. To hide this fraudulent activity, the bank allegedly cut off the company from receiving SMS alerts from the account, while also refusing to oblige the request of Owigs and Obigs for a statement of account.
Secondly, the account from which the money was paid from was a dedicated account with the funds in it solely for guaranteeing of the contract between Owigs and Obigs. It was not to be touched for any other purpose so as not to violate the contract.
As the bankers to the company and contract, this fact was said to have been known to Zenith Bank but it went ahead to tamper with the funds to the tune of over $4,000, obviously in a bid to frustrate the company for its refusal to accede to its greedy demands. The payment was made from the account of the company to pass it off that the company willfully flouted a term of the contract!
Thirdly, the payment of the penalty by Zenith Bank was the banks own way of intentionally ending a contract it was only invited to be receiving/confirming bank. The bank, according to sources in the know, took the step without the knowledge of the Nigerian company so as to punish it for refusing its overtures for profit sharing.
The manipulative and greedy disposition of the bank did not only deprive Owigs and Obigs its due profitability but also deprived the Federal Government of Nigeria taxes and levies that would have been due to it in millions of naira.
The actions of the bank have also effectively painted the country is bad light and dragged its name in the mud as a country of people who are unprofessional and dubious in business and unable to follow through simple contractual obligations, processes and procedures.

THE JUDICIAL CONSPIRACY

Aggrieved, 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, believing that the judiciary is the last hope of the common man.
Their hope for speedy and judicious adjudication however vanished into the thin air due to 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 judge desecrated the Universal Governing Rules of Trade Customs And Practice (UCP) by allegedly altering them in favour of Zenith bank plc in a 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.
The judge relied on the apparently forged UCP Rules to occasion miscarriage of justice and in the process defamed a global body, when the she swapped the breach by Zenith bank. This is a legal malpractice moreso when the global body defamed was not a party to the contract between Zenith bank and Owigs and Obigs. Our investigation revealed that 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.
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.
According to the Brief of Appellants Argument filed by Owigs and Obigs after Justice Otaluka dismissed its suit against Zenith Bank, 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.
The company further 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.
Obigs and Owigs has taken 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.
Continuing, the company 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 judgement, 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.
Owigs and Obigs also contended that despite several demands for the production of different crucial documentary evidences 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.
The company further stated that the action of both Zenith Bank and Justice Otaluka had made the international community to write letters of condemnation to Nigerias apex bank, Central Bank of Nigeria and the Chief Justice of Nigeria, thereby causing embarrassment for the countrys judiciary.
According to court papers, Justice Otaluka also curiously upheld the deduction of over $4,486.04 the bank removed from the companys account without the knowledge and authorization of the company to pay for a penalty the bank should have ordinarily paid from its pocket.

NAGGING QUESTIONS

In all of these, there are certain questions that are seriously begging for answers since it is an affront to common sense and a mockery of judicial process that in the breach of contract, a non-party was held responsible for the breach of duty in a contract it was not a party to while the non-defaulting party was held liable for the damages of the breach occasioned by the defaulting party and the defaulting party was exonerated for defaulting.

  1. Can a non-party indeed breach a contract in which it was not a party to in the Nigerian trade custom and practice?
  2. In a breach of contract, which party is liable under the law- the defaulting or the non-defaulting party?
  3. Does Nigerian law punish the innocent and exonerate the guilty?
  4. Can Nigeria be taken seriously as a nation that wants to be in the forefront of international trade if a leading bank like Zenith Bank Plc is engaged in blatant fraudulent practices and criminal manipulations as witnessed in its deal with Owigs and Obigs?
    5 Is there any rule of the Central Bank of Nigeria that mandates banks in the country to share in the profit of companies they act as receiving/confirming banks for outside of standard commissions and fees payable to them?
  5. How can the much touted diversification of the Nigerian economy come to fruition if banks in the country change the rules at will and become overtly greedy to the point of frustrating and willfully rendering such profitable contracts of Owigs and Obigs useless just because its criminal manipulations could not be actualized?
  6. What becomes of the fate of the solid minerals sector in the country and its players when dealing with the international community if banks and state institutions in the country fail to play by international rules, processes and procedures?
  7. How can Nigeria be taken serious if our judiciary can connive with supposed defaulters and suspected criminally fraudulent entities to deprive hardworking and industrious Nigerians fair hearing and equitable judgment as alleged?

For how long will Nigeria remain a pariah nation on account of few individuals in government, judiciary and the corporate world? Any hope for a robust economic prosperity with the current trend?These are questions not just for the Nigerian government but every conscionable Nigerian, who is pained by the current trend and desirable for a more equitable country where the highest bidder does not easily breach the rules, brazenly act like a bull in a China shop and still walk away from the consequences as Zenith Bank Plc hopes it has done. Another conspiratorial intrigue played out when the Appeal by Owigs and Obigs against the judgement came up for hearing on the 26th of February, 2020 at the Court of Appeal in Abuja as observed by Paparazzi reporters present. There are two courtrooms namely, A and B in the premises, with the case assigned to court A, but in a suspicious manner and citing frivolous excuses, officials of the court suddenly announced that Court A will not be opened for court sessions that day, which technically meant that a new date would have to be sought again before the appeal can be heard, after a heated argument by the appellants lead counsel and calls made to highest hierarchy of the court, the officials capitulated and agreed to open the court room. The drama didn’t end there, when the case was eventually called, the court staff informed the panel that the case file was missing! Again, it took the influence and intervention of Barrister Sule (SAN) the appellants lead counsel before the case file magically reappeared. There was no counter motion when the case was announced for hearing by the respondent, Zenith Back, ably represented by Olayinka Adedeji Esq,. The Sitting Panel went on to agree that the brief was properly served the respondent. The court then moved the motion for hearing to 21st of May, 2020, the respondents lawyer also did not raise any objection. Paparazzi put some calls through to the Corporate Affairs Department of Zenith Bank, an official of the bank promised to meet up with the Paparazzi Editors in Abuja to address the banks own side of the story, but did not keep the appointment. He also did not respond to questions put through SMS before he established contact with Paparazzi.

Culled from Paparazzi

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