N.D.I.C V F.M.B. (1997)

LAWGLOBAL HUB Lead Judgment Report

M. L. UWAIS, C.J.N.

This is an appeal from the decision of the Court of Appeal holden at Lagos which reversed the ruling of the Federal High Court sitting at Lagos. The facts, which are common ground, may be stated as follows:

By Government Notice No.1 published in the Official Gazette of the Federal Republic of Nigeria No.1 Volume 81 of 21st January, 1994, the licences of the Financial Merchant Bank Ltd. (the respondent herein) and one other Bank were revoked by the Governor of the Central Bank of Nigeria and the appellant was appointed their liquidator. The revocation was declared to be in accordance with the powers of the Governor under Section 12 of the Banks and Other Financial Institutions Decree No. 25 of 1991 (hereinafter referred to as “BOFID”). The reason for exercising the power was given in the Gazette Notice to be “the grave financial condition of the banks which culminated in the total erosion of their capital obligations to their depositors and creditors, various actions were taken by the regulatory authorities to halt further deterioration, including calls on the shareholders to capitalise the banks which has (sic) failed.”

By a deed of appointment, the Governor of the Central Bank, in exercise of his powers under Section 38 subsection (3) of BOFID, appointed the Nigeria Deposit Insurance Corporation (the appellant herein) as a provisional liquidator to the respondent. The deed of appointment gave the powers of the provisional liquidator, in addition to those given to it by the Company and Allied Matters Act, Cap. 59 of the Laws of the Federation of Nigeria, 1990 (hereinafter referred to as “CAMA”), to be thus:-

“(a) To take immediate possession, and establish control over all the property assets, records and the whole affairs of the bank.

(b) To take or defend proceedings in the name of the bank.

(c) To give valid receipts for all moneys and execute all conveyances, deeds, assurances and things which may be deemed proper or desirable.

(d) To execute and deliver any deeds or instruments and to convey, assign or otherwise assure the properties of which it is appointed liquidator (sic) or any part thereof or any interest therein.

(e) To make and effect all repairs and insurances which are necessary for the protection or improvement of the properties and assets of the bank.

(f) To demand and recover all income or debts due or owed to the Bank by action distress or otherwise.

(g) To do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers hereof or derived under any law which it lawfully may or can do as a Liquidator of the bank.”

On the 4th March, 1994, the appellant presented a petition before the Federal High Court (Eigbedion, J.) praying as follows:-

“(i) That the Financial Merchant Bank Limited may be wound-up by the Court under the provisions of the Companies and Allied Matters Decree, 1990, as amended by section 38(4) of BOFID.

(ii) Or that such other Order may be made in the premises as shall be just. ”