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OSOPADEC Files CBN Complaint Against Zenith Bank Over Contract Dispute

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The Ondo State Oil Producing Areas Development Commission(OSOPADEC) has lodged a complaint against Zenith Bank(PLC) with the Central Bank of Nigeria(CBN) over the bank’s failure to pay the agency N200m.

In a Suit No: FHC/CS/L/192/2019 between Zhi Jiang Construction Company Limited and Zenith Bank PLC and OSOPADEC, the state interventionist agency, sought the intervention of the Central Bank of Nigeria(CBN) for the payment of the N200m part-payment of the sum guaranteed by Zenith Bank PLC in respect of the construction firm.

A letter sent to the Director, CBN Consumer Protection Department(CPD) Abuja stated that OSOPADEC awarded the construction of Aboto-Atijere road(28.5km) in Ondo State to a Chinese firm(Zhi JIANG) Construction Company Limited on December 27,2017.

OSOPADEC said that the total Contract Sum of the road project was N8,804,800,125.26 billion while an Advance Payment Guarantee dated April 4,2018 was provided by Zenith Bank to the tune of N8,804,800,126:26billion.

The agency said that N800m was paid as mobilisation in installments of N200 million per tranche to Zhi Jiang Construction Company Limited’s Account domiciled in Zenith Bank with the first tranche already paid.

However, after the payment of the first tranche,the construction company breached the terms of the contractual agreement which forced OSOPADEC to terminate the contract on January 16, 2019.

OSOPADEC then wrote a letter to Zenith Bank on January 16, 2019, demanding that the N200m guaranteed for its customer (Zhi Jiang Construction Company) should be refunded into OSOPADEC’s Account with Zenth Bank. According to the agency, Zenith Bank ignored the letter and did not refund the sum.

After a Federal High Court in Lagos struck out a case against Zenith Bank, OSOPADEC wrote another letter to Zenith Bank, demanding for the N200m part-payment of the guaranteed sum of the contract and attached the certified true copy (CTC) of the judgement, but according to the agency, Zenith Bank did not acknowledge several letters and deliberately refused to refund the funds.

“It has been brought to our notice that Zenith Bank’s reason for unjustly withholding our money is that the Claimant( Messers Zhi Jiang) has filed a Notice of Appeal against the Judgement of the Federal High Court, Lagos delivered since July 2, 2019.

Assuming without conceding that the claimant according to Zenith Bank has indeed filed a Notice of Appeal, it is our humble submission supported by elementary law that the mere filing of Notice of Appeal does not operate as a stay of execution of a validly given Judgement of a competent court”.

The Commission noted that it is spurious for Zenith Bank to hold on to its money since January 16,2019 under the pretext that there was an appeal, stressing that the action is fraudulent and should be sanctioned.

OSOPADEC therefore sought the intervention of the CBN to direct Zenith Bank to refund the sum of N200m to the Commission without further delay. It also asked the central bank to compel Zenith Bank refund the guaranteed funds with interest at the present rate from the date it began to demand its money till the final liquidation of the said amount.

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