Why CBN may not obey Supreme Court order on Naira swap deadline

FG challenges Supreme Court order on Naira swap deadline

The Supreme Court order on Naira swap deadline extension may not be binding on the apex bank due to some technicalities, according to a legal expert that spoke to Nigeria Today News.

Recall that three State governments – Kaduna, Kogi, and Zamfara – had approached the Supreme Court seeking to restrain the Nigerian Government and its agencies from implementing the deadline for the swap of the old Naira notes.

CBN is not named in the suite

However, according to Isaac Okeh, a legal practitioner, the Supreme Court order on Naira swap deadline may not be binding on the CBN for several reasons, one of which includes the fact the CBN was not named as a party in the suit.

“Can the Supreme Court competently make an order against the CBN in the suit that the CBN is not a party to? Had the CBN been joined in the suit, the Supreme Court would not have had jurisdiction. This is because the CBN was not listed amongst the persons that can appear before the Supreme Court in its original jurisdiction.

“Now, the law is clear that a person who is not a party to a suit cannot benefit or be bound by the decision, ruling, order, or judgment made pursuant to such suit.

“In this instance, the CBN was not a party to the suit before the Supreme Court and legally speaking, there is no legal basis for the apex bank to be bound by the decision. At best, the Supreme Court order on Naira swap deadline is binding on the FG but it is submitted that the FG is a distinct and different person from the CBN; such that an order against it does not extend or translate to an order against the CBN,” Okeh explained.

The order and CBN autonomy

Speaking further, he also posited that “even though under section 20 (3) of the CBN Act, the CBN has no unilateral power to call in or recall the old notes without the approval or consent of the President, the CBN remains a distinct independent entity with its clear mandates”.

“Section 1(3) of the CBN Act clearly ceded autonomy to it. The section provides that: “In order to facilitate the achievement of its mandate under this Act and the Banks and Other Financial Institutions Act, and in line with the objective of promoting stability and continuity in economic management, the Bank shall be an independent body in the discharge of its functions.”

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Existing court ruling by FCT High Court

More so, he continued, “there is a valid and subsisting order of the FCT High Court restraining the CBN and other commercial banks as well as the President from extending the time for the phasing out of the old notes beyond the February 10, 2023 deadline.

“The said order binds the CBN who was a party to it since the same has not been vacated by the Court of Appeal nor did the Supreme Court order consider it suit under discussion (the Supreme Court, in any case, has no jurisdiction to consider any judgment emanating from any court other than the Court of Appeal). It therefore could not be said to have been overruled by implication because overruling an order of a court must be direct and express arising from its appeal or an appeal of a related case, but not implied.”

Okeh, therefore, concluded that “the order of the Supreme Court in Suit No. SC/CV/162/2023 against the FG and CBN is a mere academic exercise respecting the apex bank and does not bind it has not been a party to it.

“The CBN is by no stretch of the imagination, an agent of the FG, and due to its autonomy, the FG has limited powers over it, especially with respect to its mandate under section 2 of the CBN Act, one of which is the recalling of the old notes and issuance of the new ones which is the immediate cause of the suit under discussion. I shall respectfully refrain from making suggestions on what should have been done because the matter is sub judice.”