Breach Of Contract: How MasterCard Used Dishonest Tactics To Edge Out Chams In Million-dollars Nigeria’s ID Card Project

Sequel to the concession made by the federal government of Nigeria, ChamsConsortium Ltd was commissioned to issue out 100 million identity cards alongside MasterCard but the latter had breached the contract by getting involved in an unlawful agreement with NIMC and thereby producing only a negligible number of issued cards paid for by Nigerians.

According to Demola Aladekomo, Chairman of ChamsConsortium Ltd, MasterCard Asia/Pacific Pte Ltd (MasterCard) had entered a Memorandum of Understanding (MOU) with Chams PLC, and agreed to work together to facilitate the issuance of identity cards to Nigerians.

Likewise, CCL also entered into a Customer Business Agreement (CBA) with MasterCard setting out obligations of both parties.

The CBA contained several clauses including non-disclosure and non-compete clauses.

In the context of the MasterCard/Chams Agreements, MasterCard was provided with a copy of the exclusive and confidential concession agreement granted to CCL. Over a period of many months, MasterCard worked closely with Chams on the architecture of the National ID project designed by Chams.

Chams exposed the entire architecture to MasterCard while working jointly to integrate MasterCard’s payment functionalities into the architecture of the National ID project.

In the course of these developments, MasterCard received confidential information from Chams as contemplated under the CBA.

CCL also formally introduced MasterCard to NIMC as its technical partner. Prior to this introduction, MasterCard and NIMC had no business relationship but each had existing relationships with CCL.

CCL granted MasterCard access to NIMC as a signed-on partner under the concession agreement.

Thereafter, MasterCard started having secret meetings with NIMC without informing, inviting, involving or updating Chams that brought it in as partners.

As a product of these meetings, MasterCard eventually entered into an agreement with NIMC to the exclusion of ChamsConsortium, Chams Plc and Nextzon.

This agreement was a direct breach of MasterCard’s CBA obligation not to compete with CCL or use any information disclosed under the CBA for purposes other than the CBA’s implementation.

Following failed attempts to reason with MasterCard, Demola stated that they had no other choice than to instruct their Nigerian lawyers, Olaniwun Ajayi LP and UK lawyers, Allen & Overy LLP in June 2013 to take legal action, seek redress against the clear breach of confidence and infidelity exhibited by MasterCard against Chams Plc. and CCL.

The situation, however, did not turn out well for Chams as it was persuaded to explore amicable settlement of the issue because MasterCard had deep pockets and had threatened to outspend them in UK courts. Their lawyers sent preliminary letters to MasterCard in this regard.

Between April 2014 and until recently, they had met with and wrote to the CEO of MasterCard Worldwide on MasterCard’s breaches of obligation under their agreements with Chams.

As was reported, MasterCard always responded with the indifference of a huge multinational that believes it cannot be sued by a small local Nigerian company and had arrogantly told Chams that its lawyers in South Africa, Singapore and America will outclass those of Chams in court resource-wise.

When the issues of MasterCard’s underhand and sharp practices in cheating Nigeria and Chams were exposed, they threatened CCL again with court cases and assured them that they would not survive it.

All these were in disregard of public admissions made by MasterCard’s Country Representative, Omokehinde, who claimed that Chams brought MasterCard into a deal MasterCard snatched.

This assertion was also corroborated by Chris Onyemenam of NIMC who publicly acknowledged that MasterCard/Daniel Monehin did not disclose to NIMC that MasterCard had an agreement with Chams before NIMC signed its illegal agreement with MasterCard.

Based on that, they held a meeting with the then-Director General of NIMC, Chris Onyemenam, and a concerned CBN Director, Walter Ahrey and the representative of MasterCard, Daniel Monehin in September 2013 at Hilton Abuja.
Onyemenam at that meeting asserted and confronted Monehin that MasterCard failed to disclose to NIMC the existence of the MasterCard/Chams agreements.

Chris specifically asked Monehin and MasterCard to go and resolve the betrayal issues with Chams, accusing MasterCard of subverting Nigeria and Chams.

In a show of remorse following Onyemenam’s accusation of MasterCard, an onerous draft Technical Support Agreement (TSA) was sent by Monehin of MasterCard to Chams Plc for execution in December 2013 offering a paltry sum of US$500,000 against the more than US$100m CCL had invested on the National ID project.

Knowing the company s limited financial resources, MasterCard called CCL’s bluff and used its might and resources to cheat it.

ChamsConsortium Ltd and Chams Plc are, however, seeking for an intervention to persuade Mastercard to accept their wrongdoing, apologise for the breach and pay compensation for their accumulated losses.

When SaharaReporters reached out to MasterCard’s Senior Vice President and head of Government Affairs, Tucker Foote, his phone rang out multiple times without an answer. Emails sent to one of the company’s representative Ajay Banga also remain unreplied at the time of filing this report.