Legal Update On The Implementation Of The Stamp Duties Act And The Rights Of Bank Customers


Thursday, June 8, 2017 8:00AM /Bolu Ojewole**


The Central Bank of Nigeria (“CBN”) vide a circular BSD/DIR/GEN/CIR/03/015 dated 15th January, 2017 (the “Circular”) had directed that all deposit money banks (the “Banks”) should deduct N50 from every deposit of over N1,000 made into bank accounts (the “Deduction”) and remit the Deduction to the Nigeria Postal Service (“NIPOST”) in accordance with the CBN’s interpretation of the provisions of Federal Government Financial Regulations, 2009 (the “Regulations”) and the Stamp Duties Act, 2004 (“SDA”). Further to the Circular, deposits into Bank accounts are subject to the Deduction. Customers of Banks (the “Customers”) have since be liable to the Deduction on the basis of Circular.

However, the Court of Appeal (“COA”) on the 21st of April, 2016 delivered judgment in Standard Chartered Bank v Kasmal International Services Limited & 22 Ors [CA/L/437A/2014] (“Kasmal Case”) wherein it held that the a court of law can only apply provisions of the law which are in existence and in force in Nigeria and there is no provision under the SDA giving the 1st to the 22nd respondent the right to make the Deduction. Furthermore, the COA held that Item 4 of Schedule 1 of the SDA exempts evidence receipt of monetary deposits into Bank Accounts from stamp duty.

The decision of the COA in Kasmal’s case was relied upon in the judgment delivered on the 13th of March, 2017 at the Federal High Court (FHC) in Retail Supermarkets Nigeria Limited v Citibank Nigeria Limited & Anor (“Shoprite Case”) wherein the Circular was set aside and declared it invalid, null and void. The FHC also issued a Perpetual Injunction issued restraining the CBN and the 1st defendant from taking any step to or further implementing the Circular.


1.   Can Customers seek a refund of all and any Deductions done pursuant the CBN’s interpretation of the SDA and the Regulations as detailed in the Circular?

If yes, how far back can the refund go – up to date of COA Judgment or FHC Judgment or date of Circular or date the bank first deducted the duty?

Who can the Customers claim such a refund from?


The judgment of the Court of Appeal as relied upon in the Shoprite Case nullified the Circular as being contrary to the express provisions of the SDA. The Judgment of the FHC and the COA remain binding until set aside; and in the circumstance is the law.(2) Thus, as of today the law is that Banks do not have any basis to make any Deduction pursuant to the Circular.

It is also important to note that the judgment of the Courts in Kasmal and the Shoprite Cases are final on the issues they decide and as such can only be subject to an appeal.(3)  A final decision is one that cannot be varied, reopened or set aside by the court that delivered it or any other court of coordinate jurisdiction, although it may be subject to an appeal to a court of higher jurisdiction before it”(4)
Customers thus have a right to write to the Banks, communicating the decision of the COA and FHC declaring the Circular null, void and unenforceable and specifically demanding that the Deduction abates immediately.Furthermore, Bank Customer can request for a refund of all Deductions made pursuant the Circular on the basis of the judgement in the Kasmal Case and Shoprite Case declaring the Circular “null and void”. “Null and void” means ineffectual, nugatory or having no legal force or binding effect.[5]
The implication of this is that in law, the Deduction has no legal efect.(5)  In view of  the position outlined above, when a thing is void ‘ab initio’ then in law it had never happened or existed and so would have no effect whatsoever from the beginning and for all times.(6)  Thus, Customers can make a demand for all Deductions done from the date of implementation of the Circular by the Banks. The Banks may be liable in contempt(7)  because they were parties alongside the CBN and NIPOST in the Kasmal Case and ought to have discontinued implementation of the Circular. The legal responsibility of the Banks arose in the course of the Banks discharging the duties entrusted to them under the Circular for the benefit of NIPOST. NIPOST is therefore a known and fully disclosed principal and the law is that “an agent acting on behalf of a known and disclosed principal incurs no personal liability”.(8) The implication of this is that an action to recover Deductions must be against NIPOST subject to issuing pre-action notice. However, since the sole purpose of making an entity a party to a suit or action is to make that entity bound by the decision of the court after due consideration of the suit, thus the CBN and Banks are also necessary parties to any suit seeking a refund of Deductions.

There is no legal basis for the continued Deduction as at today because the decision in the Kasmal Case remain binding until the Supreme Court sets it aside. Customers are at liberty to write to their Banks and also enclose certified true copy of the decisions of the COA and FHC  in the Kasmal Case and Shoprite Cases respectively.  

In the event that the Banks do not desist from making the Deduction, Customers can initiate an action against NIPOST, the Banks and CBN seeking for the Deductions to abate in addition to seeking a refund of all Deductions. It however remains to be seen how or whether NIPOST is in a position to refund all Deductions, since these may have been expended as revenue accruing to NIPOST as an agency of the Federal Government of Nigeria.

**Bolu Ojewole, LL.B (Lagos) B.L (Abuja), LL.M (London) is a lawyer with work experience in diverse roles and engagements within legal practice, telecoms, FMCG, IT & Technology industries.

1.       Yakubu v Ajaokuta Steel Co 10 NWLR Part 774 @ Page 117.

2.      "Whether regular or irregular, competent or incompetent, a decision, order or judgment of a competent court of law in respect of what it is constitutionally empowered to do, is valid, subsists and binds the parties affected by it until set aside by the court itself or on appeal by a higher court, that is the effect of the presumption of regularity enshrined in the Evidence Act -  See Rossek v. A.C.B. Ltd. (1993) 8 NWLR (Pt. 312) 382; (1993) 10 SCNJ 20.

3.      Fadiora v Gbadebo (1978) 3 SC 219; Onyeabuchi v INEC (2002) 8nwlr (Pt.769) 417 S.C.

4.      Black's Law Dictionary

5.      ''Null and void' means that which binds no one or is incapable of giving rise to any rights or obligations under any circumstances, or that which is of no effect". Per  Ogundare, J.S.C. (P.34, Paras.A-B) Adefulu & Ors. v. Okulaja & Ors (1996) LPELR-90(SC)

6.      Macfoy v. UAC Ltd. (1962) A.C. 152 ; INEC v. Nyako & Ors CA/A/117/2011 (CON)

7.      The law is that any party who disobeyed a decision, order or judgment of the court is guilty of contempt of the court and any act or acts done in violation and or disobedience of the said, decision, order or judgment are invalid and ineffective in law.

8.      Okafor v Ezenwa  2002) 13 NWLR (PT.784) 319. 

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