Court voids eNaira Ltd’s name, awards N10m fine in CBN’s favour

The Federal High Court in Abuja on Friday made an order of perpetual injunction restraining eNaira Payment Solutions Ltd from parading itself as the registered proprietor of the trademark “eNaira”.

Justice James Omotosho, in a judgment, also granted the Central Bank of Nigeria (CBN)’s counterclaims and awarded N10 million against the company.

Justice Omotosho ordered the eNaira Payment Solutions Ltd to immediately change its name to another distinct name without the use of the word “Naira”.

The judge agreed with the defendants’ arguments that though the company had been incorporated since 2004, it had a misleading name.

He held that “the name chosen by the plaintiff on its incorporation is in the circumstances unregistrable due to the misleading nature of the name, which suggests government’s patronage.”

The judge held that the Corporate Affairs Commission (CAC) was, therefore, right to issue the directive to the company to change its name in line with Section 852(2)(a) and (b) of the Companies and Allied Matters Act (CAMA), 2020.

The News Agency of Nigeria (NAN) reports that eNaira Payment Solutions Ltd had, in the suit marked FHC/ABJ/CS/1113/2021, sued CBN, the Registrar of Trademarks and the Registrar General of CAC as the 1st to 3rd defendants, respectively.

In the amended writ of summons dated and filed on April 5, 2024, the plaintiff sought 17 prayers, including N90.10 billion in damages.

It prayed the court to restrain the defendants from withdrawing the trademark “eNaira” from it and stopping the CBN from claiming or conferring ownership of the name on itself.

It described the acts of the defendants as an unconstitutional takeover of its personal property, which it had maintained for over 20 years, among other reliefs.

But CBN filed a further amended statement of defence and a counterclaim dated and filed on July 5, 2024, and marked FHC/ABJ/CS/1591/2021.

The apex bank sought five reliefs, including a perpetual order restraining the company from parading itself as the registered proprietor of the trademark “eNaira”.

The CBN sought an order directing the company to pay it N20 billion as general damages for the colossal and global embarrassment it caused to it by laying claim to the proprietorship of a trademark that does not belong to it.

It also sought a fine of N200 million as a cost of the suit.

Besides, the CAC, in its statement of defence and counterclaim dated April 30, 2024, but filed May 2, 2024, sought an order directing the company to change its name to another distinct name without the use of the word “Naira”.

In establishing its case, the plaintiff called one witness; the CBN and CAC also called a witness each while parties tendered documentary evidence as exhibits.

Delivering a consolidated judgment in the suits, Justice Omotosho observed that the Trademark Registry, through a letter dated Nov. 15, 2021, had written to eNaira Ltd cancelling and withdrawing the acceptance letters issued to the company in respect of applications for eNaira in classes 36 and 42.

He observed that the registry had directed the withdrawal on the grounds that “eNaira is a national intellectual property and constitutes a symbol and national asset of Nigeria.”

According to the judge, as it stands, the plaintiff has no greater legal right to the trademark than the 1st defendant.

“A party that has no legal right cannot be entitled to an injunction.

“The purport of this is that, prima facie, the plaintiff has no valid trademark to the exclusive use of the eNaira trademark,” he said.

Besides, the judge held that by Section 852(2) of CAMA, CAC is at liberty not to register a company with names which suggest that the company enjoys government patronage.

“The ‘eNaira’ name is so closely linked to the legal tender of Nigeria, which is exclusively controlled by the Central Bank of Nigeria.

“The plaintiff with the name ‘eNaira’, even though it had been incorporated since 2004, has a misleading name.

“An average person on the street is most likely to think that the plaintiff is an agent of the federal government or the Central Bank of Nigeria.

“The proposed business of the plaintiff, which, according to the evidence in chief of PW-1, is the creation and control of a digital fiat currency on their electronic payment platform.

“This, no doubt, creates the impression that the plaintiff has the authority of the Federal Government of Nigeria to issue and control a digital form of the naira.

“A misleading name is a ground for the 3rd defendant (CAC) to direct a company to change its name,” he said.

Justice Omotsoho noted that the section of the law also gives CAC the power to change any company’s name, which must be complied with within six weeks from the date of the directive.

“The plaintiff had six weeks to comply with the directive which was issued 9th December, 2021.

“The plaintiff has, however, not complied with this directive,” he said.

The judge held that allowing the plaintiff to have control of the name is tantamount to surrendering Nigerian sovereignty to a private company, citing sections of the Trademarks Act to back his decision.

According to the judge, the world today is becoming more digitally advanced, and this is even more prevalent in the financial sector, where there is a large adoption of cryptocurrencies by nations around the world.

“Any digital currency with the name ‘eNaira’ will no doubt create the impression that it is an official digital form of the Naira.

“The plaintiff cannot assert control over the ‘eNaira’ name or issue it.

“This would be disastrous for the Nigerian economy and will create scepticism among users as it is not guaranteed by the Central Bank of Nigeria.

“The claims of the plaintiff are therefore bound to fail, while the counterclaims of the 1st and 3rd defendants will succeed on the strength of the evidence before this court.

“In final analysis, this court will rule against the plaintiff, as the claim is incompetent on grounds that it was not brought under the appellate jurisdiction of this court.

“Furthermore, the facts and the law are against the plaintiff.

“In contrast, the counterclaims of the 1st and 3rd defendants succeed,” the judge ruled.

Justice Omotosho, consequently, dismissed the eNaira Payment Solutions Ltd’s suit and declared that the company was not the registered owner of the trademark “eNaira”.

He declared that the plaintiff, not being an agency of government or an entity licensed to issue legal tender in Nigeria, was not entitled to register the trademark “eNaira”.

The judge, who ordered the company to change its name to another distinct name without the use of the word “Naira”, also gave an order of perpetual injunction restraining the firm from parading itself as the registered proprietor of the trademark “eNaira”. (NAN)

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