Judgement rules against eNaira Ltd over company name, orders firm to pay N10m to CBN

The Federal High Court in Abuja made a significant ruling on Friday, issuing an order of perpetual injunction that prevents eNaira Payment Solutions Ltd from claiming to be the registered proprietor of the trademark “eNaira”.

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This judgment, delivered by Justice James Omotosho, also resulted in the Central Bank of Nigeria (CBN) being granted its counterclaims, with the company being ordered to pay N10 million.

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Furthermore, Justice Omotosho instructed eNaira Payment Solutions Ltd to immediately change its name to a distinct one that does not include the word “Naira”, as the current name is deemed misleading.

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The judge agreed with the defendants that the company's name, in place since its incorporation in 2004, was unregistrable due to its misleading nature, which implies government patronage.

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Justice Omotosho held that the Corporate Affairs Commission (CAC) was correct in directing the company to change its name, citing Section 852(2)(a) and (b) of the Companies and Allied Matters Act (CAMA), 2020.

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eNaira Payment Solutions Ltd had initially sued the CBN, the Registrar of Trademarks, and the Registrar General of CAC in a suit marked FHC/ABJ/CS/1113/2021, seeking 17 prayers, including N90.10 billion in damages.

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In its amended writ of summons dated April 5, 2024, the plaintiff requested that the court restrain the defendants from withdrawing the trademark “eNaira” and prevent the CBN from claiming ownership of the name.

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The CBN, however, filed a further amended statement of defence and a counterclaim on July 5, 2024, seeking five reliefs, including a perpetual order restraining the company from using the trademark “eNaira”.

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The CBN also sought an order directing the company to pay N20 billion as general damages for the embarrassment caused by laying claim to the trademark, as well as a fine of N200 million as the cost of the suit.

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

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

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Justice Omotosho observed that the Trademark Registry had written to eNaira Ltd on November 15, 2021, cancelling and withdrawing the acceptance letters for the company's applications for eNaira in classes 36 and 42.

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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.

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Justice Omotosho noted that the plaintiff has no greater legal right to the trademark than the CBN, and therefore, the plaintiff cannot be entitled to an injunction.

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The judge held that by Section 852(2) of CAMA, the CAC has the power to not register a company with names suggesting government patronage, and the “eNaira” name is closely linked to Nigeria's legal tender.

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Justice Omotosho stated that the plaintiff's name, even though it had been in use since 2004, is misleading, as it implies the company is an agent of the federal government or the CBN.

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The judge observed that the plaintiff's proposed business of creating a digital fiat currency on its platform would create the impression that it has the authority to issue and control a digital form of the naira.

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Justice Omotosho noted that the law 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, and the plaintiff had failed to comply with this directive.

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

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Justice Omotosho observed that the world is becoming increasingly digitally advanced, and any digital currency with the name “eNaira” would create the impression that it is an official digital form of the naira.

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The judge ruled that the plaintiff cannot assert control over the “eNaira” name, as this would be disastrous for the Nigerian economy and create skepticism among users.

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

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The judge 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”.

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Justice Omotosho ordered the company to change its name to another distinct one without the use of the word “Naira” and issued an order of perpetual injunction restraining the firm from parading itself as the registered proprietor of the trademark “eNaira”.