Concerns have been raised in the Nigerian media about a Supreme Court ruling in Nigeria involving Owigs & Obigs Nigeria and Zenith Bank. The dispute centres on a US$64 million international trade contract for the export of tin, columbite, and tantalite ores to Chinese buyers.

The contract required confirmation of letters of credit (L/Cs) by Zenith Bank, which Owigs & Obigs alleges the bank failed to provide, leading to the termination of the contracts and financial penalties deducted from their account.

Court decision

In May 2024, the Supreme Court ruled in favour of Zenith Bank, stating that the bank was not liable for the alleged breach.

The court held that the contracts between the parties were autonomous and that Zenith Bank, as the confirming bank, did not have a direct contractual relationship with Owigs & Obigs under the Uniform Customs and Practice for Documentary Credits (UCP 600).

Criticism

This decision has drawn criticism from various stakeholders, including Agimor Media Consultant International, who argue that the ruling undermines international trade standards and could deter foreign investment in Nigeria.

They contend that the judgment disregards the interconnected nature of the contracts and the responsibilities of the confirming bank, potentially setting a concerning precedent for international commerce involving Nigerian entities.

Supreme Court petitioned

Owigs & Obigs has petitioned the Supreme Court to review its decision, asserting that the ruling misrepresented the facts and legal principles governing the case.

They maintain that the bank's failure to confirm the L/Cs directly led to the contract's termination and their financial losses.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.