Court invalidates eNaira Ltd’s name and fines it N10 million in favor of the CBN.

The Federal High Court in Abuja issued a perpetual injunction on Friday, preventing eNaira Payment Solutions Ltd from presenting itself as the registered proprietor of the trademark “eNaira”.

In its judgment, Justice James Omotosho granted the Central Bank of Nigeria (CBN)’s counterclaims and awarded the bank N10 million in damages.

Justice Omotosho also ordered the company to change its name immediately to a distinct name that does not include the word “Naira”.

The judge agreed with the defendants that, although the company was incorporated in 2004, its name was misleading.

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.”

Accordingly, the judge found that the Corporate Affairs Commission (CAC) was justified in directing the company to rename itself under Section 852(2)(a) and (b) of the Companies and Allied Matters Act (CAMA), 2020.

The News Agency of Nigeria reports that eNaira Payment Solutions Ltd filed suit FHC/ABJ/CS/1113/2021 against the CBN, the Registrar of Trademarks and the Registrar General of CAC as the first, second and third defendants, respectively.

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

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

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

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

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

The CBN also sought an order directing the company to pay it N20 billion as general damages for the “colossal and global embarrassment” caused by the company’s claim to the proprietorship of a trademark that does not belong to it, and a fine of N200 million as a cost of the suit.

In its statement of defence and counterclaim dated 30 April 2024 (filed 2 May 2024), the CAC sought an order directing the company to change its name to a distinct name that does not include the word “Naira”.

During the proceedings, the plaintiff called one witness; the CBN and CAC each called a witness and parties submitted documentary evidence as exhibits.

In a consolidated judgment, Justice Omotosho noted that the Trademark Registry had, in a letter dated 15 November 2021, cancelled and withdrawn the acceptance letters issued to eNaira Ltd for applications in classes 36 and 42.

The registry had withdrawn the applications on the basis that “eNaira is a national intellectual property and constitutes a symbol and national asset of Nigeria.”

According to the judge, the plaintiff has no greater legal right to the trademark than the first 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.

He further held that, under Section 852(2) of CAMA, the CAC may refuse to register a company whose name suggests 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, even though incorporated in 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 plaintiff’s proposed business, 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, 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 third defendant (CAC) to direct a company to change its name,” the judge said.

Justice Omotosho noted that the law also gives the 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 issued 9 December 2021. The plaintiff has, however, not complied with this directive,” he said.

The judge held that allowing the plaintiff to control the name would amount to surrendering Nigerian sovereignty to a private company, citing sections of the Trademarks Act to support his decision.

He added that the world is becoming more digitally advanced, especially in finance, where many nations are adopting cryptocurrencies.

“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 would 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 first and third 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 first and third defendants succeed,” the judge ruled.

Justice Omotosho dismissed the eNaira Payment Solutions Ltd’s suit and declared that the company was not the registered owner of the trademark “eNaira”. He also 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 a distinct name without the word “Naira”, also issued a perpetual injunction restraining the firm from presenting itself as the registered proprietor of the trademark “eNaira”. (NAN)

The post Court voids eNaira Ltd’s name, awards N10m fine in CBN’s favour appeared first on Vanguard News.