What is the effect of the injunction of the Supreme Court (SC) restraining enforcement of the phasing out of old notes?
One thing is certain: the CBN has already given Friday, 10th February as the date on which the old notes cease to be legal tender. Only the CBN can change that date. No court in this land, including the Supreme Court, can. This is the effect of section 20(3) of the CBN Act, 2007.
However, the court can, as a court of equity, issue an injunction against the enforcement of the deadline. Note, this does not erase the deadline but only its enforcement. This is a point that common law lawyers will appreciate easily. The deadline stays. It means that on the 10th of February, 2023, the old notes shall cease to be legal tender in Nigeria, despite the order of the Supreme Court (SC).
To understand the legal position following the order of the Supreme Court (SC), we have to talk about what “legal tender” means. It simply means a coin, note or other means of payment that everyone is under pain of punishment under the law to accept as means of payment for goods and services. Indeed, it is an offence under section 20(5) not to accept any coin or note issued by the CBN as a means of payment.
Note that the law does not punish anyone for accepting as a means of payment any note or currency other than the one the CBN has designated as the new legal tender in replacement of the old with effect from any date. The law does not say that anyone should be punished for accepting the old note.
So, then, what has the order of the Supreme Court (SC) achieved. It has only given a reprieve from prosecution anyone that refuses to accept the new notes as a means of payment. It has no effect whatsoever on the old notes. Anyone who wishes can go ahead to accept them. The right to do so was never affected by the change in currency. The law at section 20(4) of the CBN Act only punishes counterfeiting of a legal tender, not presentation of the old legal tender for payment.
The injunction granted by the Supreme Court (SC) is superfluous and achieves nothing other than to introduce confusion into the system. Many are going to rain blows on each other as traders refuse to accept the old notes as from 10th February, 2023. No one can force anyone to accept the old notes as from 10th February. No one can be punished for refusing the old notes as from 10th February. Any note that you cannot be punished for refusing is not legal tender. The old notes cease to be legal tender from 10th February, 2023. This is the incontrovertible legal position. The Supreme Court (SC) order achieves nothing.
Chuks Nwachuku
