Customs Ordered To Pay N500m Damages To Auto Dealers For Illegally Sealing Shops

The Nigeria Customs Service (NCS) has been instructed by a Federal High Court in Lagos to compensate the Registered Trustees of Auto Dealers in the state with a sum of N500 million. This payment is to be made as restitution for the unlawful closure of shops owned by the dealers.

The court has also issued a perpetual injunction order, prohibiting the defendants from invading and sealing the business premises of the plaintiff’s members. This is due to the claim that the vehicles in their car shops, which were previously inspected, assessed, and cleared at the port by the defendant’s officers, were not properly inspected, assessed, and cleared.

The Registered Trustees of Auto Dealers in Lagos filed a lawsuit against the Nigeria Customs Service Board and the Comptroller-General of Customs for the unlawful intrusion and closure of 434 car marts/shops by certain NCS officers on September 30, 2019. The lawsuit claims that the cars were either smuggled or undervalued during the clearance process at the ports.

Justice Abimbola Olawunmi Awogboro, in her ruling on December 27, 2023, ordered the NCS to compensate the plaintiff (Registered Trustees of Auto Dealers in Lagos) with the amount of N500 million. This compensation is for the unjust and illegal invasion and closure of the plaintiff’s members’ business premises, as well as the significant financial losses and decline in business opportunities suffered by the plaintiff’s members since September 30, 2019.

In suit number FHC/L/CS/665/2021, the judge ruled that the sealing of the auto marts belonging to the plaintiff’s members was both unlawful and arbitrary. The judge further stated that there was no valid reason or explanation for this unlawful action.

Justice Awogboro dismissed the defendants’ argument that certain members of the plaintiff voluntarily agreed to pay additional import duty, resulting in the unsealing of their car marts. The argument was deemed untenable and failed to justify the defendants’ arbitrary actions. The members in question made the payments under coercion and duress, not willingly, in order to continue their business operations.

The judge ruled in favour of the plaintiff and issued a mandatory injunction ordering the defendants to immediately unseal the business premises of all members of the plaintiff. These premises had been unlawfully and arbitrarily sealed by the defendants’ officials since September 30, 2019.

In response to the court’s ruling, the Service expressed its intention to challenge the verdict through an appeal.

The Chief Superintendent of Customs (CSC), Abdullahi Maiwada, who serves as the Service National Public Relations Officer, stated during a phone conversation with our correspondent that while the service has not yet received a copy of the verdict, it intends to challenge the Court’s decision by filing an appeal.

We acknowledge the ruling of the Federal High Court in Lagos. However, despite not having received a copy of the ruling yet, the Nigeria Customs Service would certainly file an appeal against the judgement.

The legislation provides a timeframe of approximately 90 days within which to file an appeal. “We possess the legal entitlement to appeal, and we will certainly exercise that right within the designated timeframe,” Maiwada stated over the phone.

The court’s ruling has elicited delight from goods forwarders and auto dealers.

Dr Eugene Nweke, a former President of the National Association of Government Approved Freight Forwarders (NAGAFF) and a Professor of Political Science & Dean of the Faculty of Social Sciences and Humanities at Eboyin State University, stated that the operational laws of the Service have undergone examination.