The Central Bank of Nigeria (CBN) is the regulator of the Foreign Exchange Market in Nigeria. The CBN periodically issues foreign exchange manuals and circulars for the operation and regulation of the market. This is in line with its statutory mandate to determine from time to time, by a suitable mechanism, the exchange rate of the Naira. The relevant statute establishing the CBN is the Central Bank of Nigeria Act 2007 (“CBN Act” or “the Act”). Generally, Section 52(1) of the CBN Act gives some measure of protection to the Federal Government of Nigeria and the CBN against adverse claims with respect to anything done or omitted to be done by the Government or the CBN in execution of or in connection with the execution of any power conferred upon the Government or CBN.

However, to ensure that the Government and/or the CBN do not hide under the protection afforded by Section 52(1) of the Act to take a reckless decision against the public, the Act gave a condition, which is that the CBN would be protected only if the act done or omitted to be done in execution of its responsibilities under the Act was done in good faith.

It is common practice for companies that deal in the importation of petroleum products to apply to the CBN for the purchase of US Dollars at the exchange rate as approved by the CBN. In May 2016, it was announced that the Federal Government through CBN had paved way for independent marketers to source for foreign exchange and import fuel. This policy came as a solution to the lingering scarcity of petrol at the time. Independent marketers were unable to bring in fuel due to their inability to access foreign exchange from the CBN. The CBN did not have enough. The consequence was that the price of petrol moved to N145 per litre from N86, as from 11 May 2016. Today, petrol sells at over N162 and a little above N200 depending on the location.

In the same year 2016, the Federal Government took another action through the CBN. On 15 June 2016, the CBN issued a circular by which it announced a new foreign exchange policy (devaluation policy) that caused the exchange rate of Naira to USD to be N280 to USD1. Before the Circular, the exchange rate was N197 to USD1. Many companies in the business of importation of petroleum products were affected. One of such companies was Stallionaire (Nig.) Ltd. Aggrieved, Stallionaire dragged the CBN to the Federal High Court, Lagos. Below is a brief summary of the interesting story, and what transpired between Stallionaire and the CBN at the Federal High Court up to the Court of Appeal –  C.B.N. v. Stallionaire [2021] 1 NWLR (Pt. 1758) 515.

The Story

As stated above, Stallionaire is a Nigerian company in the business of importation of petroleum products. Stallionaire’s case was that it was affected by the CBN’s devaluation policy in 2016 which saw the USD pegged at N280 to USD1 by the CBN. The problem was that Stallionaire claimed that it took loans from three commercial banks in Nigeria (First Bank of Nigeria Plc, Union Bank of Nigeria Plc and Fidelity Bank Plc) and applied to the CBN to purchase USD. Stallionaire claimed that it opened Forms M; secured the CBN’s approval for the Letters of Credit (LCs); sent the LCs to its foreign suppliers of petroleum products who ship the product on the strength of the Forms M and LCs. Stallionaire claimed to have concluded the transactions for the supply of the products at the rate of N197 to USD1. By the new devaluation policy at the time, the CBN announced that the exchange rate of Naira to USD would be N280 to USD1 and that the new policy would apply to old matured transactions instead of the N197 to USD1 which the CBN had earlier approved for Stallionaire.

Stallionaire sued the CBN contending that the CBN took the decision without considering the huge financial damage the company would suffer in view of the credit imports it had made on the strength of the USD exchange rate pre-approved by the CBN at N197. Stallionaire believed that the CBN acted in bad faith because the apex Bank usually exercises its intervention powers to save such situations. Stallionaire claimed over N2.2 Billion as deficit caused by the CBN’s “reckless” decision, among other claims including declaratory and injunctive reliefs as well as damages.

The CBN filed a preliminary objection to the suit seeking to terminate the suit in limine (without being heard on the merits). Recall that I mentioned above that Section 52(1) of the CBN Act provides protection to the CBN from adverse claims brought against the Bank for actions taken (in good faith) in exercise of its powers under the Act. The CBN sought to rely on that Section 52 by contending that the trial Court lacked jurisdiction to entertain the suit because the devaluation policy complained about by Stallionaire was done in good faith and not exclusively targeted at Stallionaire. According to the CBN, devaluing the Naira against the USD was as a result of the harsh economic realities of the time and in the overall interest of Nigeria.

The CBN also argued that it was not a party to the transactions between Stallionaire and its bankers and that the decision to apply for letters of credit and obtain foreign exchange for same through whatever mode was a business decision between Stallionaire and its bankers, and that any risk or loss arising would be borne by Stallionaire and its bankers and cannot be transferred to the CBN.

In reaction, Stallionaire argued that its case was not hinged against the devaluation policy itself, but against the CBN’s decision to apply the policy to the company after it had secured prior approvals to the contrary. More so, Stallionaire contended that all it was required to do to activate the jurisdiction of the court was to make clear averments with sufficient particulars regarding the alleged bad faith against the CBN. Thereafter, the case would proceed to trial for the court to determine whether the allegations were proved.

On whether the CBN was the proper party to be sued instead of Stallionaire bankers, Stallionaire argued that it had no case against the banks but squarely against CBN for its retroactive application of post-floating inter-bank market rates after the establishment of a single foreign exchange market, which had adverse effect on the company.

The trial Court did not find any substance in the objections by CBN. Faji, J. was of the view that since Stallionaire pleaded bad faith against the CBN, the Court must be allowed to hear the case so as to determine whether there was indeed bad faith on the part of the CBN. The Court also held that the CBN was the proper party to be sued and not Stallionaire bankers.

On Appeal

Dissatisfied with the decision of the trial Court not to terminate the case from inception, the CBN appealed to the Court of Appeal, contending that in order for the trial Court to exercise jurisdiction over an administrative action of the CBN, bad faith must be proved. The Court of Appeal asked a brilliant question – At what stage will the bad faith be proved? Aliyu, JCA answered:

The question now arises, at what stage will the Plaintiff/Respondent [i.e. Stallionaire] be required to prove bad faith? Certainly, not at the threshold of the proceedings, but during trial as posited by the learned Respondent’s Counsel.

The Court of Appeal rightly upheld the decision of the trial Court that Stallionaire had sufficiently alleged particulars of bad faith which was enough to activate the jurisdiction of the Court to look into its grievances. The Court relied on the Supreme Court decision in N.D.I.C. v. C.B.N. [2002] 7 NWLR (Pt. 766) 272.

The Court of Appeal also considered the issue of whether the CBN was the proper party to be sued instead of Stallionaire bankers. The Court held that the doctrine of privity of contract does not apply in this case. Generally, under Nigerian law, only parties to a contract can sue and be sued on the contract. Garba, JCA was of the view that the complaint by Stallionaire transcends the mere contractual relationship between Stallionaire and its bankers as it involves a challenge to an administrative decision of the CBN which directly affected the company.

The Court of Appeal concluded, and rightly too, that the CBN was a necessary party and indeed the only party to be sued in the proceedings.

It would be interesting to see how the Court will ultimately decide the case on the merits.

Introducing Law Practice as a Business

Dear friends, I’m happy to announce the publication of my latest book, Law Practice as a Business

Law Practice as a Business discusses a critical aspect of law-practice business—the business of making money in legal practice. It shares some of the vital business strategies and distinct ideas peculiar to the legal industry. The ideas are presented with clarity of thought and simplicity of language. Hopefully, this keeps you relaxed while activating your logical and innovative mind. 

In addition to my knowledge and personal experience, the fundamental business aspects of legal practice discussed in this book also draws from the ideas of well-accomplished legal practitioners and scholars, locally and internationally. Therefore, some of the opinions expressed in the book are authoritative. The ideas are not only authoritative but realistic, with proven degrees of success. 

This book is meant to be a source of information, inspiration, and motivation for all categories of lawyers—especially young lawyers—as well as the lay in law, including law students and people in service-based businesses.


Book Price and How to Get a Copy

Law Practice as a Business is N7,000 (Seven Thousand Naira) only per copy, excluding delivery cost. To grab a copy or more for yourself and your learned friends, kindly make payment to any of the following account details: 


Azubuike Stephen Ifeanyi 




Azubuike Stephen Ifeanyi 


You can share evidence of payment via email ( or WhatsApp (+2348063868497) and provide your delivery address. 

You can also purchase the book at my online store,

NB: For law firms, legal departments, and other organisations, Law Practice as a Business is also available for bulk purchase and is deliverable to all locations. To place requests, please email You can also reach me via call/WhatsApp on +2348063868497.

The book is also available in Lagos and Abuja at the following locations:

1. Ikeja Bar Centre, Lagos High Court, Ikeja Division. 

2. Udom Emmanuel Book stand, Federal High Court, Ikoyi. 

3. Infusion Lawyers, Vibranium Valley, 42, Local Airport Road, Ikeja. 

4.  Mr. Alex, Federal High Court, Abuja, 08035991379. 


Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has advised a number of both established and startup tech companies. He tweets @siazubuike.
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