MTN Nigeria Communications Limited and the Central Bank of Nigeria (CBN) on Tuesday told the Federal High Court in Lagos that they have resolved to opt for an out-of-court settlement of the dispute on the alleged improper repatriation of over $8.1bn profits from Nigeria.
On August 29, the CBN sanctioned four banks with various fines totalling about N5.87bn for allegedly violating sections of the country's foreign exchange regulations by facilitating the improper repatriation of profits from Nigeria on behalf of MTN Nigeria.
Part of the repatriated funds was, a few years later, brought back into the country by the banks, ostensibly on behalf of some MTN offshore investors in the form of shareholders' loans and equipment.
The four banks - Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank, were accused of "flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006."
However, MTN was directed by CBN to carry out a reversal of the transaction and return the entire $8.1bn to Nigeria and follow the due process of repatriation of the funds.
But, on August 30, MTN rejected the directive in a statement, insisting it was not guilty of any wrongdoing. On September 10, MTN filed a suit at the Federal High Court, Lagos against the CBN to contest the sanction.
Hearing in the case was adjourned to December 4.
At the resumed sitting on Tuesday, legal counsel to MTN Nigeria, Wole Olanipekun, a senior advocate of Nigeria, who appeared alongside four other senior lawyers, informed the court presided by Justice Saliu Saidu, both parties were engaging each other in "out-of-court settlement talks."
Counsel to CBN, Seyi Sowemimo, confirmed the agreement, along with T. D. Agbe, a Senior State Counsel from the Federal Ministry of Justice, who represented the Attorney General of the Federation (AGF), Abubakar Malami.
"We have advanced towards out-of-court settlement. What remains is to 'cross the t's and dot the i's'. It is just to present a report of settlement," Mr Sowemimo told the court.
Based on the agreement by both parties, Justice Saidu adjourned the case until December 12 for the presentation of a report of settlement.
Hints about a move towards a possible out-of-court settlement first came from the chief executive officer of the MTN Group, Rob Shuter, on November 13 in Cape Town, South Africa.
Mr Shuter told Bloomberg, the telecoms firm was nearing an out-of-court settlement with the Nigerian government over the sanctions imposed on its Nigerian subsidiary.
"We are narrowing down what the key issues are in an ongoing discussions with Nigeria's central bank and other institutions," Mr Shuter told Bloomberg.
Apart from legal action, the MTN boss said the other part of a two-pronged strategy involved exploring prospects for an amicable resolution of the matter.
"We would like a resolution out-of-court and with normal engagements as that would be faster than a court process," he said.
Also, at the end of the monetary policy committee (MPC) meeting in Abuja a fortnight ago, CBN governor, Godwin Emefiele, gave another hint of a possible out of court settlement in the matter.
"We are in the process. We can say the matters will soon be resolved. We are on the verge (it is as good as announcing the resolutions). But, please spare me the stress of not talking about what the agreements are at this time. At the appropriate time, this will be announced," he told PREMIUM TIMES reporter in Abuja.
Justifying the decision to ask MTN to reverse the transaction and return the repatriated funds, Mr Emefiele said the CBN expected MTN and the banks to submit certain documents for review by the auditors, to confirm the transfer of funds followed the legal process. He said the sanctions were imposed when they failed to provide the documents.
He said after meetings with the management of both the banks and MTN Nigeria, those documents were submitted, paving way for a review of the sanctions and possible resolution of the matter.
Similarly, last Monday, a case filed by MTN challenging the legality of alleged $1.3 billion import duties and N242 billion withholding tax liabilities was stalled due to the absence of Justice Chukwujekwu Aneke.
Hearing in the pending application before the Federal High Court in Lagos was consequently adjourned till February 7, 2019.
Wole Olanipekun, a Senior Advocate of Nigeria, led MTN Nigeria's legal team, while T.A Gazali, a chief state counsel from the Federal Ministry of Justice, represented the AGF.
The AGF had accused MTN Nigeria of owing the federal government the tax revenues between 2007 and 2017, in violation of Section 36 of the Nigerian Constitution.