Zenith Bank Faces Global Backlash Over $64 Million Contract Dispute Amid CBN Regulatory Woes

Zenith Bank is currently facing global backlash over $64 million contract dispute amid CBN regulatory woes.

 

NaijaOnPoint Nigeria reports that Zenith Bank Plc is sinking deeper into crisis as it faces fresh allegations of contract breach and judicial manipulation in a $64 million legal battle that has triggered international outrage and further tainted its already troubled reputation.

 

With the Central Bank of Nigeria’s (CBN) June 30 deadline looming for banks to resolve long-standing regulatory forbearance issues, Zenith Bank which is one of Nigeria’s top-tier lenders is now under fire from Owigs and Obigs Nigeria Limited, a company accusing it of commercial sabotage, international treaty violations, and collusion with Nigeria’s Supreme Court to escape liability in a contentious contract dispute.

A Deal Gone Sour

 

The dispute stems from a 2018 agreement in which Zenith Bank was expected to issue a Documentary Letter of Credit (LC) worth $64 million to facilitate an international trade transaction. However, after the contract was signed, the bank allegedly reneged on its obligations, setting off years of costly litigation.

 

 

Despite Zenith Bank admitting in court that it understood and accepted the terms of the contract, governed by the globally recognised Uniform Customs and Practice for Documentary Credits (UCP 600), the bank failed to honour its commitment. The matter escalated to the Supreme Court, which controversially ruled in favour of Zenith, clearing it of any wrongdoing.

 

The ruling shocked commercial and legal experts, who accused the court of reconstructing the contract in Zenith Bank’s favour, effectively shielding the bank from accountability. Owigs and Obigs described the verdict as “judicial reengineering” and have launched a sweeping international campaign to expose what they call a miscarriage of justice.

International Embarrassment

 

The company has lodged formal petitions with the UK Parliament, the International Criminal Court (ICC) at The Hague, and the International Court of Arbitration in France. The petitions accuse Zenith Bank of colluding with Nigerian judicial authorities to frustrate the enforcement of an internationally binding contract.

 

According to Donatus Emeka Okorie, Chairman of Owigs and Obigs, “The Supreme Court’s decision defies all logic, international law, and commercial sense. It is a fraudulent ruling based on a fictitious letter of credit that doesn’t exist anywhere on earth.”

 

Okorie insists that the judgment not only sabotaged the company’s global operations but has cast a long shadow over Nigeria’s credibility in the international financial and legal ecosystem.

 

“The judgment contradicts the basic structure of a documentary credit system,” he said. “How can a seller’s bank serve as the issuing bank in a three-party agreement without a confirming bank? And how did the court fail to recognise this fundamental flaw?”

 

Regulatory Headaches Multiply

 

This scandal couldn’t have come at a worse time for Zenith Bank. The institution is currently scrambling to meet CBN’s regulatory forbearance deadline, a mandate that has exposed deep-seated financial and governance issues in several Nigerian banks. For Zenith, the $64 million fiasco not only raises fresh questions about its internal controls and corporate ethics but also compounds investor and stakeholder concerns over its long-term viability.

 

Legal experts say the Supreme Court ruling contradicts internationally accepted trade protocols and undermines confidence in Nigeria’s financial system. Under UCP 600 and INCOTERMS 2010, rules that govern international commercial transactions confirming banks are obligated to honour payments once contractual conditions are met. Zenith Bank’s failure to do so, critics argue, represents a blatant violation of global banking norms.

 

NJC and International Scrutiny

 

Owigs and Obigs have also filed a complaint with Nigeria’s National Judicial Council (NJC), urging an urgent review of the Supreme Court ruling. The company has threatened to escalate the matter to the ECOWAS Court, the United Nations, and other international forums if domestic authorities fail to act.

 

“The Respondent Bank should have distanced itself from such a sham ruling,” Okorie stated. “Instead, it embraced it, fueling suspicions of a backdoor deal. This is not just about our company; it’s about preserving trust in Nigerian banks and protecting the integrity of international trade.”

 

He added: “Can any Nigerian bank now be trusted to honour international letters of credit if Zenith is allowed to get away with this?”

 

Tarnished Reputation, Unanswered Questions

 

Zenith Bank’s silence and continued reliance on the discredited judgment have only intensified criticism. Business leaders and legal observers fear that Nigeria’s already fragile global reputation could take a further hit if the matter is not properly addressed.

With the NJC now under pressure to act, the fate of this case and Zenith Bank’s credibility hangs in the balance.

 

As global financial institutions and investors watch closely, the question remains: Will Nigeria hold Zenith Bank accountable, or will this judgment be allowed to stand as a dangerous precedent in international trade?