The Federal High Court, Lagos, has ordered the Nigerian Customs Services (NCS) to pay N500 million to the Registered Trustees of Auto Dealers in Lagos.

In an action instituted against the Nigerian Customs Services Board, Chairman, Nigerian Customs Services Board, and the Comptroller General, Nigerian Customs (as Defendants) in Suit No: FHC/L/CS/665/2021, Hon. Justice A. O. Awogboro, in her judgment delivered on December 27, 2023, directed the Defendants to pay to the Plaintiff the huge sum as general and aggravated damages for the arbitrary and unlawful invasion and sealing off of their business premises since September 30, 2019, and for the huge economic loss and depreciation in business fortunes of members of the plaintiff on account of the unlawful sealing off.

Other reliefs granted by the Judge were mandatory injunction directing the Defendants to immediately unseal the business premises of all members of the Plaintiff; Perpetual Injunction restraining the Defendants from further invading and sealing the business premises of the members of the Plaintiff on the ground that the vehicles in their car shops which had earlier been inspected, assessed and cleared at the Port by officers of the Defendant were not properly inspected, assessed and cleared and the payment of interest on the judgment sum at the prevailing monetary policy rate (Central Bank of Nigeria rate) from the date of judgment until judgment sum is fully liquidated.

Background

In September 2019, some officers of the Nigerian Custom Service invaded and sealed several car shops across the country citing the reason that those cars were either smuggled or under- assessed during clearance at the ports.

The Registered Trustees of Auto Dealers in Lagos felt they had had enough of Custom’s harassment, illegality, extortion and therefore briefed the law firm of Dr. Monday Ubani to seek legal redress on their behalf.

In a letter to the Comptroller General of NCS, the group through the law firm of Ubani & Co, condemned the September 30, 2019 raid and sealing of their shops by Custom operatives, describing the action as ” demonstration of gross irresponsibility, unprecedented impunity and abuse of power.”

The dealers claimed that all the cars in their business premises were duly cleared and with appropriate duties paid. The law firm also forwarded copies of the letter to the Senate president, Speaker, House of Representatives and the Attorney General of the Federation.

Part of the letter which also served as a pre-action notice read:

“We must state here with all sense of responsibility and patriotism that the action of Nigeria Custom officers in this regard is a demonstration of gross irresponsibility, unprecedented impunity and abuse of power.

“Though the Nigeria Customs and Excise Management Act gives you the power to examine, mark, seal and take account of any goods contravening your regulations. In this case, you did not examine, mark, seal, and take account of the particular vehicles identified as not being properly cleared, but rather sealed up the entire premises without any form of examination or inspection of papers. This very act of yours, has no protection under the Act, but smacks of impunity, illegality and flagrant abuse of executive power.

“The moment Nigerian government agencies elevate the pursuit of revenue above the rights and welfare of the citizens, Nigeria is doomed. Take notice, therefore, that you have 14 days from the day you receive this letter to unseal all our client’s members’ business premises to enable them carry out their lawful businesses as Nigerian citizens.

“Take further notice that you have a period of 30 days from the date you receive this letter to pay a compensation of 10 billion to our clients for the severe hardship, suffering, embarrassment, loss of business, physical, mental and psychological torture and trauma your arbitrary, lawless and inconsiderate action has caused our clients and their families, failing which our client shall be left with no other option than to seek redress through a competent court of law.”

When the warnings and requests were ignored, the law firm instituted an action, SUIT NO: FHC/L/CS/665/2021, asking the Court to determine:

“Whether the Defendants have any power, authority or justification to invade and seal off the Plaintiff’s members respective business premises, on the ground that the Plaintiff’s members vehicles were smuggled, an allegation they later abandoned for another allegation – that the vehicles were not properly assessed and cleared by the designated Defendants’ officers at the Port, and demanding the Plaintiff’s members to come to the Defendants office with their vehicle Custom clearance documents, which documents were issued to the Plaintiff’s members by officials of the Defendants after duly inspecting, assessing and clearing their vehicles at the port.

“Whether the Defendants, after their officials had inspected, assessed and cleared the Plaintiff’s members vehicles at the Port, have any right, justification, power or semblance of power to intercept the same vehicles on the road (in transit), or at the car shop and detain same for a re-assessment known as Debit Note (DN) on the ground that they were not properly assessed and cleared by their officers, and thereby demanding payment of additional duty from the Plaintiff members.”

Reliefs

A declaration that having duly inspected, cleared and issued the required Customs clearance papers to members of the plaintiff at the Port, and the plaintiff members having paid the fee (Custom Duty) as duly assessed and demanded by officers of the Defendants, the Defendants have no power, authority or justification to thereafter invade and seal off the same Plaintiff members business premises, on the ground that the Plaintiff members vehicle were (smuggled or) not properly assessed and cleared by the designated officers of the Defendant.

A declaration that the Defendants’ directive to the Plaintiff members to come to the Defendants office with their vehicle Customs clearance documents for re-assessment and re-clearance, and directing their officers to raise a Debit Note (DN) to that effect is unwarranted, unjustified and unlawful.

A declaration that the Defendants, after their officials had inspected and cleared the Plaintiff members’ vehicles at the Port, have no right, justification, power or semblance of power to intercept the same vehicles on the road (in transit) and detain them on the ground that they were not properly cleared, and thereby demanding payment of additional money from the Plaintiffs or their Customers.

A declaration that the invasion and sealing off of the Plaintiff members’ respective business premises since the 30th day of September, 2019 on the ground that the Plaintiff members vehicles were not properly cleared, and demanding the Plaintiff members to come to the Defendants’ office with their Vehicle Customs clearance documents for inspection and re-assessment (which documents were issued to the Plaintiff’s members by the officials of the Defendants after duly inspecting and clearing the said vehicles at the port) is unlawful and unjustified.

A declaration that the practice of intercepting the Plaintiffs members vehicles by officials of the Defendants on the road (in transit) and detained on the ground that they were not properly assessed and cleared, and thereby demanding payment of additional money from the Plaintiff’s members or directing them to raise Debit Note (DN) to that effect is unwarranted, unjustified, and unlawful.

An order of mandatory injunction directing the Defendants to, with immediate effect, unseal the business premises of all members of the Plaintiff which was unlawfully and arbitrarily sealed off by officials of the Defendants since 30th day of September, 2019.

An order of Perpetual Injunction restraining the Defendants from further invading and sealing the business premises of the members of the Plaintiff on the ground that the vehicles in their Car Shops which had earlier been inspected, assessed and cleared at the Port by officers of the Defendant were not properly inspected, assessed and cleared.

An order Directing the Defendants to pay to the Plaintiff the sum of N5 five million as general and aggravated damages for the arbitrary and unlawful invasion and sealing off of the Plaintiff’s members business premises since the 30th day of September, 2019, and for the huge economic loss and depreciation in business fortunes of members of the plaintiff on account of the unlawful sealing off of their business premises since 30th day of September, 2019.

Interest on the judgment sum at the prevailing monetary policy rate (Central Bank of Nigeria Rate) from the date of judgment until judgment sum is fully liquidated.

The Cost of action

The Defendants in their defence first alleged that the Plaintiff’s vehicles were smuggled, and the Plaintiff denied it and stated that there were no smuggled vehicles found in the car shops of any of its members visited and sealed by the Defendants’ officers. Moreover, following the Defendants’ request, the Plaintiff’s members submitted their import and clearing documents for their vehicles, and after two weeks of check in the Defendants’ system, the Plaintiffs were informed by the Defendants’ officers that the issue was no longer smuggling, but false declaration and underpayment.

The Plaintiff further informed the Court that there couldn’t have been underpayment/undervalue when the Plaintiff’s members’ vehicles were duly and physically inspected by the Senior Customs Officers (some of them at the level of Deputy Comptroller) who signed and authorized the release order, and that no Importer/Dealer sees the imported vehicles until the clearing process has been concluded by the Customs, and by which time all the necessary charges have been taken care of by the Importer/Dealer. Besides, all payments made by its members were in accordance with the Defendants’ valuation and directive which precedes the signing of the release order. The Plaintiff informed the Court that what its members pay was what they were asked to pay which is programmed in the Defendants’ system. The amount given to the Plaintiff members to pay is what the Defendants’ system accepts, which is called Automated Assessment. The Plaintiff further informed the Court that the Defendants’ officers are in the habit of stopping, checking, harassing and extorting money from its members’ customers after they drive out into town with their purchased vehicles, and this negatively affects their business, and that when its members’ customers call them to inform them of the harassment by the Defendants’ officers on the road, they usually intervene and inform the harassing officers that the necessary Duties on such vehicles have been paid, but the harassing Defendants’ officers would usually respond with the slogan “Senior Officer Release, Junior Officer seize.”

Suspicion of non-compliance

The Defendant admitted sealing 434 Car marts/Shops of the Plaintiff’s members in Lagos on suspicion of non-compliance with Customs Procedure, and informed the Court that some of the Plaintiff’s members have complied with their directive by making undertaking to make the additional payment, and the car mart of those members have been unsealed, but the Plaintiff said those members were coerced/induced by the Defendant into executing undertakings for additional Duty payment under duress in the office of the Defendants.

The Defendant having seen how weak its case was, at a point abandoned the substance and began to chase shadow by challenging the jurisdiction of the Court on the ground that the Plaintiff is not a registered entity, and has no power to institute the suit, and also that there was no cause of action against the Defendants. The Plaintiff in a bid to rebut the assertion tendered its Certificate of incorporation to show it was a legal entity. Having seen that the plaintiff is a legal entity, the defendant argued that the Plaintiff instituted the suit as Registered Trustees of Auto-Mobile Dealers Friends Association which is not recognised in law, as what the law recognises is Incorporated Trustees of a body and not Registered Trustees of a body.

Unlawful and arbitrary

Hon. Justice A. O. Awogboro in her judgment delivered on December 27, 2023, first dealt with the issue of jurisdiction, and held that the only way of proving that an entity is registered is by providing a copy of the Certificate of Incorporation, which the Plaintiff has provided, and the argument of whether it sued as a Registered Trustees instead of an incorporated trustee is of no consequence.

Going into the substance of the case, the Judge held that the sealing up of the car marts of the plaintiff’s members was unlawful and arbitrary, as there was no justification for the unlawful act. She held that the argument that some members of the Plaintiff have complied by undertaking to make the additional payment as a result of which their car marts were unsealed was not tenable and did not in any way support or justify the arbitrary action of the Defendants because those members did not agree to do so willingly but out of coercion and duress, so that they could carry on with their business. The allegation of coercion and duress were not denied by the Defendants.

Counsel for the plaintiffs, Dr. Ubani and his client applauded the judgement delivered and recommended such boldness and uprightness to be exhibited by judges of various courts in the land in order to end impunity in the system. (Daily Sun)

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