Court of Appeal Dismisses NAIC’s Appeal Against First Bank in N200bn Agric Credit Scheme Dispute
The Court of Appeal in Abuja has upheld the decision of the Federal High Court to dismiss a long-running suit filed by the Nigerian Agricultural Insurance Corporation (NAIC) against First Bank of Nigeria over the disbursement of the Federal Government’s N200 billion Commercial Agriculture Credit Scheme (CACS). The appellate court’s ruling, delivered on Friday by Justice Okon Abang, effectively ends a 12-year legal tussle that began in 2013.
In a series of seven coordinated judgements delivered within six hours, Justice Abang held that NAIC’s attempt to discontinue its case at the trial court after issues had already been joined amounted to an effort to manipulate judicial proceedings. He described the move as “a smart attempt” to salvage a weak and unsustainable claim.
Background of the Dispute
The case originated from NAIC’s allegation that First Bank, one of the participating disbursement banks under the CACS programme, failed to deduct and remit the mandatory 2.5% insurance premium from beneficiaries of the scheme. NAIC sought declaratory reliefs through an originating summons at the Federal High Court, Abuja.
First Bank promptly countered the claims by filing a counter-affidavit, written address, and additional affidavits opposing NAIC’s suit. Court records show the matter experienced multiple adjournments over the years, after which NAIC surprisingly applied to withdraw the suit. NAIC claimed the withdrawal was prompted by an intervention from Mr. Jubril Aku, a representative of the Bankers’ Committee, who allegedly sought an out-of-court settlement.
First Bank objected, arguing that NAIC’s application to discontinue the suit without its consent—especially after both sides had fully exchanged pleadings—was prejudicial. The bank maintained that the appropriate order should be a dismissal, not a striking out, which would leave room for NAIC to refile the case.
The trial court agreed, ruling that since issues had already been joined, discontinuance could only result in dismissal. Dissatisfied, NAIC appealed the ruling, arguing for a striking out instead.
Court of Appeal Ruling
In upholding the trial court’s verdict, Justice Abang described NAIC’s arguments as “grossly misconceived.” He emphasized that once a claimant has seen the defence of the opposing party, any attempt to withdraw the case without the other party’s consent should naturally result in a dismissal.
He explained that an order striking out the suit would only have been appropriate if NAIC had applied for withdrawal before First Bank’s counter-affidavit was served.
Justice Abang further questioned NAIC’s reliance on the alleged intervention of the Bankers’ Committee, noting that the committee was not a party to the suit and had earlier opposed being joined. He expressed surprise that NAIC, after withdrawing an earlier application to join the committee—which the court struck out in October 2013—proceeded two months later to file an application based on its purported intervention.
According to the appellate court, the only reasonable conclusion was that NAIC became apprehensive after reviewing First Bank’s defence and sought a “soft landing” through withdrawal, with the hope of re-instituting the suit later. Justice Abang stressed that such a move could not be permitted, and the trial court acted correctly in dismissing the case.
He affirmed that the ruling aligned fully with established Supreme Court precedents and proceeded to dismiss NAIC’s appeal. The court also awarded N1 million in costs in favour of First Bank.
Broader Context
The Commercial Agriculture Credit Scheme remains one of Nigeria’s major agricultural financing initiatives, aimed at boosting productivity and supporting agribusinesses. Launched in 2009 and funded through a N200 billion bond issued by the Debt Management Office, the scheme offered qualified companies loans at a maximum interest rate of 9%.
The case underscores the importance of procedural diligence in Nigeria’s legal system, particularly the consequences of attempting to discontinue a suit after parties have fully joined issues.