Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) have challenged the jurisdiction of the Federal High Court in Abuja to entertain a suit filed by Aso Savings & Loans Plc and Union Homes Savings & Loans Plc over the revocation of their operating licences.
At proceedings on Monday before Justice Emeka Nwite, counsel to the CBN, Onyeka Ezeah, and NDIC’s lawyer, Abubakar Shehu, raised preliminary objections, arguing that the court lacked the competence to hear the matter.
The case came up for the defendants to show cause, following an earlier ruling by Justice Nwite on December 29, when he declined to grant an ex-parte application by the two mortgage banks seeking to restrain the regulators from taking further steps after the licence revocation.
Instead, the judge held that the interest of justice required the defendants to be put on notice and directed them to show cause why the reliefs sought should not be granted, adjourning the matter to January 5.
When proceedings resumed, counsel to the plaintiffs, Joseph Silas, told the court that the case was slated for the defendants to show cause. He disclosed that the CBN had served the plaintiffs with an affidavit to show cause, a notice of preliminary objection and a counter-affidavit to the originating summons. He added that the NDIC had also served similar processes earlier in the day.
Silas, however, argued that despite the documents filed, the NDIC had not shown sufficient cause why the court should refuse the application. He maintained that although the CBN had revoked the licences, the law grants the affected institutions a 30-day window to challenge the decision.
According to him, the NDIC should be restrained from commencing liquidation until the substantive suit is heard and determined, warning that allowing liquidation to proceed could irreversibly prejudice his clients if the court eventually finds the CBN’s action unlawful. He therefore urged the court to order parties to maintain the status quo.
CBN’s counsel, Ezeah, strongly opposed the request, insisting that the court must first determine the issue of jurisdiction. Describing jurisdiction as “the lifewire of any case,” she cited a 2022 Supreme Court decision in Waziri v. PDP, which held that questions of jurisdiction must be resolved before any other issue.
NDIC’s counsel, Shehu, aligned himself with the CBN’s position, stressing that the corporation was acting within its statutory mandate. He informed the court that the NDIC had also filed a preliminary objection and urged the court to adjourn the matter to allow the plaintiffs respond so the objections could be properly heard.
In response, Silas argued that while the suit was pending, the NDIC was continuing with liquidation steps, which he said undermined the plaintiffs’ right to challenge the licence revocation. He cited the Savannah Bank case in support of his plea for an order preserving the subject matter of the dispute.
Shehu countered that once a financial institution’s licence is revoked, the NDIC is empowered by law to step in to protect depositors’ interests. Silas, however, maintained that the law still allows the affected banks time to challenge the CBN’s decision, adding that depositors stood to lose significantly because NDIC insurance covers only up to N2 million per depositor, regardless of higher balances.
Shehu replied that the NDIC’s intervention became necessary because depositors could no longer access their funds, adding that if the plaintiffs eventually succeeded, their shareholders could pursue damages.
Justice Nwite queried whether it would be appropriate to make any preservative order while preliminary objections challenging the court’s jurisdiction were pending. When Silas insisted the application was aimed at preserving the res, the judge said he was unwilling to engage in what could amount to an exercise in futility.
Describing jurisdiction as a threshold issue, Justice Nwite adjourned the matter until January 21 for hearing of the defendants’ preliminary objections.
The suit, marked FHC/ABJ/CS/2776/2025, lists Aso Savings & Loans Plc, Union Homes Savings & Loans Plc, Ridhwan Hamza and Ismaila Adamu as the 1st to 4th plaintiffs, while the CBN and NDIC are named as defendants.
The plaintiffs are challenging the CBN’s decision of December 16, which revoked the operating licences of the two mortgage banks, citing failure to meet minimum capital requirements, insufficient assets, undercapitalisation and non-compliance with regulatory directives.
